Insights from the Global Risk Report 2022

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The Global Risk Report 2022 is out now.

The 2022 edition of the Global Risk Report, published by the World Economic Forum, leaves the reader with a clear feeling of urgency. This is due to the excellent work from the authors, who report on several macro trends that have been on the rise for quite some time and are now about to land on our front doors. The impacts deriving from the interaction of climate inaction, fast digitalization, and the pandemic – to name only a few – are nearly impossible to predict and require immediate action.

In spite of the difficult task at hand, the authors did a great job outlining the events that could impact the world in the short, medium and long term, trying to understand what this means for individuals, governments, and businesses. In terms of general outlook, the Global Risks Perception Survey (GRPS) – which forms the basis for the report – revealed that most participants are not very hopeful for a short-term recovery from the current crises. As the report states, this “Pervasive pessimism could create a cycle of disillusionment that makes galvanizing action even more challenging”.

The report confirms a trend that has recently become quite dominant in many horizon scanning analyses, which consists in the fact that the top risks include a mix of environmental and social concerns. These events are particularly worrying also because they can interact with each other. For instance, climate action failure can lead to extreme weather events, which in turn might exacerbate a livelihood crisis. While the exact interplay between these risks is hard to predict, the principle stands true. Troubles comes in three says the proverb; however, if society does not act quickly, three will be an optimistic estimate.

Another trend that has unfortunately been on the rise in the past two years is that of mental health deterioration. The current pandemic and the related lockdowns have worsened the conditions of those suffering from mental health issues in the past and caused new challenges for many others. This is a problem that affects individuals regardless of age, it cuts across many occupations, and it manifests itself in different forms. Students having to attend online classes could suffer from the lack of interaction much the same way an older family member could experience stress and anxiety as they go to work every day with the risk of getting infected.

At the bottom of this top ten chart are digital threats, which cannot be forgotten given what has been happening in the past two years. The entire world has started to rely more on IT infrastructures, which are now a single point of failure for governments as well as businesses. Therefore, digital inequality as well as cybersecurity failures are two highly worrying trends. The former highlights a world that moves at different speeds, with richer brackets of society (and of the world) being able to afford better services to adjust to the ongoing crisis. The latter, on the other hand, undermines such large uptake of the internet, creating what is now an endemic threat.

The report does an excellent job at showing visually how environmental concerns become increasingly prominent in the medium and longer term. Looking at the next 5-10 years, the top five is occupied by risks deriving from climate actional failure, extreme weather, biodiversity loss, natural resource crises, and human environmental damage. The message is clear, unless we act now about climate change the world will become a very different place over the next decade.

In this sense, it is quite revealing that the obstacles to a cohesive transition towards a more sustainable world lie in these very charts. Issues such as geo-economic confrontation and resource contestation are often part of the reason why a smooth transition is not yet possible. Nations competing for geopolitical and geo-economic supremacy are reluctant to engage in large-scale change that might tip the balance of power in a direction they don’t like. What if large superpowers were to lose ground against their main competitors during the transition? What about developing economies that are trying to recover from the pandemic? Will they have the resources to implement a transition? The devil is in the details in this case, and details are plentiful.

At a time when global cooperation must be at its best, there are several fractures among nations that risk hindering the whole process of keeping the people and the planet safe. As briefly mentioned for the case of digitalization, richer areas of the world have been able to endure the consequences of the pandemic better than developing ones. This is also the case for the rollout of vaccination programmes, which is significantly higher in high-income countries compared to low-income ones.

This disparity precludes a part of the world the benefits deriving from mass vaccination, such as opening activities again and lifting some restrictions. Due to such uneven distribution of resources, recovery is not proceeding consistently across the world. It is important to acknowledge that being able to get a hold of the most advanced treatments and medical equipment for the pandemic is becoming a competitive (dis)advantage in the current global economic scenario. The same could be argued for the transition towards a more sustainable economy; those who will get there first will be in a stronger position than their competitors.

Finally, it is worth mentioning the national resilience ecosystems the report addresses. The authors take an interesting approach by stating that while national governments should encourage and promote principles of resilience through society, they should also leverage cooperation from other actors. The idea that public agencies will be able to mitigate disruptions or manage entire crises for society at large is simply unrealistic; thus, it is up to other sectors – such as private businesses – to play their part in boosting resilience levels.

These ideas resonate with what the world has witnessed in the past two years, as several organizations relied too much on external help and too little on their own internal capacity to build resilience. The main message of the report is that versatile threats such as climate change, cybersecurity, and infectious diseases require a versatile approach; therefore, it is important everyone accepts some responsibility for navigating through the coming storm.

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