2012 World Economic Forum Global Risk Report

by Andrew Maynard on January 11, 2012

Cross-posted from the Risk Science Blog

The World Economic Forum Global Risks Report is one of the most authoritative annual assessments of emerging issues surrounding risk currently produced. Now in its seventh edition, the 2012 report launched today draws on over 460 experts* from industry, government, academia and civil society to provide insight into 50 global risks across five categories, within a ten-year forward looking window.

Global Risk Landscape 2012. Source: World Economic Forum Global Risks 2012, Seventh Edition

As you would expect from such a major undertaking, the report has its limitations. There are some risk trends that maybe aren’t captured as well as they could be – chronic disease and pandemics are further down the list this year than I would have expected. And there are others that capture the headlining concerns of the moment – severe income disparity is the top-listed global risk in terms of likelihood. But taken as a whole, the trends highlighted capture key concerns and the analysis provides timely and relevant insight.

Risks are addressed in five broad categories, covering economic, environmental, geopolitical, societal and technological risks. And cutting across these, the report considers three top-level issues under the headings Seeds of Dystopia (action or inaction that leads to fragility in states); How Safe are our Safeguards? (unintended consequences of over, under and unresponsive regulation); and The Dark Side of Connectivity (connectivity-induced vulnerability). These provide a strong framework for approaching the identified risks systemically, and teasing apart complex interactions that could lead to adverse consequences.

But how does the report relate to public health more specifically?

The short answer is that many of the issues raised have a direct or indirect impact on public health nationally and globally. Many of the issues are complex and intertwined, and are deserving of much more attention than I’ve been able to give the report so far. I did however want to pull out some of the points that struck me on a first read-through:

Unintended consequences of nanotechnology. Following a trend seen in previous Global Risks reports, the unintended consequences of nanotechnology – while still flagged up – are toward the bottom of the risk spectrum. The potential toxicity of engineered nanomaterials is still mentioned as a concern. But most of the 50 risks addressed are rated as having a higher likelihood and/or impact.

Unintended consequences of new life science technologies. These are also relatively low on the list, but higher up the scale of concern that nanotechnologies. Specifically called out are the possibilities of genetic manipulation through synthetic biology leading to unintended consequences or biological weapons.

Unforeseen consequences of regulation. These are ranked relatively low in terms of likelihood and impact. But the broad significance of unintended consequences is highlighted in the report. These are also linked in with the potential impact and likelihood of global governance failure. Specifically, the report calls for

“A shift in mentality … so that policies, regulations or institutions can offer vital protection in a more agile and cohesive way.”

The report’s authors also ask how leaders can develop anticipatory and holistic approaches to system safeguards; how businesses and governments can prevent a breakdown of trust following the emergence of new risks; and how governments, business and civil society can work together to improve resilience against unforeseen risks.

Vulnerability to pandemics. Pandemic-associated risks are in the middle of the pack when it comes to potential impact, but not as high as might be expected on the likelihood scale. In 2007 and 2008 pandemics were listed in the top five global risks in terms of impact in the Global Risks Report, but have not appeared this high since 2009. With increasing talk about flu strains like H5N1, I wonder whether the relegation of pandemics from the top-tier risks is an oversight.

Antibiotic-resistant bacteria. These are flagged up right in the middle of the risk-pack as an emerging risk, and are one of the highest-ranked risks directly related to public health. The report provides little additional information beyond this though.

Food and water shortage crises. Thee are the highest-ranked risks in terms of impact below major systemic financial failure. And while they are both addressed as systemic risks, failure in each area has clear public health implications.

Rising rates of chronic disease. While overshadowed by higher profile risks, this remains an area of significant anticipated adverse impact and likelihood in the report.

Dystopic trends. The chapter addressing potential drivers of a dystopic future does not directly address public health issues. But trends that have an indirect impact on health thread through it. The impact of the current global financial crisis on jobs, working hours and benefits is highlighted, and it is noted that young people have been especially hard hit recently by a lack of career opportunities. The challenges of an aging population are also flagged. Both areas impact indirectly (and sometimes not so indirectly) on health and well-being. One of the questions for stakeholders posed here is “What measures should be taken today to deal with the changing socio-economic dynamics of an ageing population and a bulging young population?” One could equally well ask what measures should be taken to ensure the health of these two populations.

Regulatory risks. In the case addressing asking “How Safe are our Safeguards?” the report’s authors conclude that:

“far-reaching weaknesses in regulations [suggest] that we may be falling behind in our capacity to protect the systems that underpin growth and prosperity”

This report considers regulation extremely broadly, and spans everything from financial regulation to safety regulation. Yet it also stresses the need for integrated approaches to systemic challenges. The highlighted questions to stakeholders at the end of this section are particularly pertinent to health risk-related regulation and governance:

  • How can leaders break the pattern of crisis followed by reactionary regulation and develop anticipatory and holistic approaches to system safeguards?
  • How can appropriate regulations be developed so that firms will undertake effective safeguards?
  • How can businesses and governments prevent a rapid breakdown of trust following the emergence of a new widespread risk?
  • How can businesses, government and civil society work together to improve resilience against unforeseen risks?

Emerging technologies and emerging risks: In examining information on technologies and risks, the report concludes

“globally, the latest technologies are increasingly accessible to local industries, but indicators relating to confidence in the institutions responsible for developing safeguards, including those that manage the risks of emerging technologies, have not shown proportional increases.”

Special report on the 2011 Japan earthquake. The March 11 earthquake that hit Japan last year and the following tsunami resulted in widespread social, economic and health impacts. In a special report, the 2011 Global Risk Report takes a holistic look at factors, events and impacts. This is a case review that is well worth reading from a systemic risk perspective.

Risk centers of gravity. The report concludes with a fascinating analysis of risk “Centers of Gravity” within the five sectors it focuses on – these are described as the risks perceived to be of greatest systemic importance, or the most influential and consequential in relation to others, within each sector. The risk centers of gravity that emerged in each sector were:

  • Economic: Chronic fiscal imbalances
  • Environmental: Rising greenhouse gas emissions
  • Geopolitical: Global governance failure
  • Societal: Unsustainable population growth
  • Technological: Critical systems failure
Source: World Economic Forum Global Risks 2012, Seventh Edition

The bottom line? The report concludes that

Decision-makers need to improve understanding of incentives that will improve collaboration in response to global risks;

Trust, or lack of trust, is perceived to be a crucial factor in how risks may manifest themselves. In particular, this refers to confidence, or lack thereof, in leaders, in systems which ensure public safety and in the tools of communication that are revolutionizing how we share and digest information; and

Communication and information sharing on risks must be improved by introducing greater transparency about uncertainty and conveying it to the public in a meaningful way.

The Global Risks 2012 Seventh Edition is available at http://reports.weforum.org/global-risks-2012/

*I was marginally involved in the report as a member of the World Economic Forum Global Agenda Council on Emerging Technologies

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