Geopolitical and Societal Risks Top Concerns for Organizations
Disruptive shifts in technology, geopolitics, societal expectations, and economic inequality are creating a new fragility in the world that is directly impacting how governments and businesses operate, according to The Global Risks Report 2016.
In its 11th edition, the report was prepared by the World Economic Forum with the help of Marsh & McLennan Companies and other partners and presents a picture of the evolving global risk landscape on both short- and long-term horizons.
Nearly 750 risk experts from all industries globally shared their thoughts on the risks that could threaten global prosperity over the next 10 years. This year, involuntary migration and the failure to adapt to and mitigate climate change — including extreme weather events and water and food shortages — emerges as two of the greatest concerns.
Among the other key findings:
- Unemployment is of great concern as it relates to social instability in developing economies.
- Growing corporate debt to fuel growth in new and emerging markets is pressuring risk bearing capacities. Today, more fragile balance sheets may be unable to absorb major losses.
- Cyber-attacks are presenting an enormous threat to advanced economies, in particular for the US.
- Emerging market economies are suffering due to slowing demand from China. The economic and societal fallout from the drop in commodity prices in exporter countries remains to be seen.
- The crisis in the Middle East has deepened across the region and spilled into other countries in the form of terrorism.
- The implications of advances in machine learning are not well-anticipated, and workforce fallout could be profound.
As these and other trends are increasingly interconnected, organizations need to consider risks in the context of other risk to truly understand the potential impact to their organizations. Risks also vary geographically, which pressures global organizations to look beyond trends and exposures in their “home states.”
This year’s report looks at the potential impacts of risks to businesses, and how private organizations can impact public policy frameworks.