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Visualized: A Global Risk Assessment for 2022 and Beyond
Since the start of the global pandemic, we have been navigating through turbulent waters, and this year is set to be more unpredictable than ever.
In the latest annual edition of Global Risks Report speak World Economic Forum (WEF), it was found that a majority of world leaders feel worried or concerned about the outlook for the world, and only 3.7% feel optimistic.
Each year, the report identifies the top risks facing the world, as identified by nearly 1,000 surveyed experts and leaders across various disciplines, organizations and geographies.
Which global risks are of most concern to leaders and experts, and which pose imminent threats? Let’s dive into the main findings of the report.
WEF Global Risk Assessment Methodology
In the survey, respondents were asked to compare 37 different risks, which were divided into five categories: economic, environmental, geopolitical, societal and technological.
To get an idea of which risks were considered more urgent than others, respondents were asked to identify when they thought these threats would become a serious problem for the world, based on the following timelines:
- Short-term threats: 0-2 years
- Medium-term threats: 2 to 5 years
- Long-term threats: 5 to 10 years
By categorizing global risks into these time horizons, it helps to give a better idea of the issues policymakers and governments may face in the near future, and how these risks may relate to each other.
Short term risks
Regarding short-term threats, respondents identified societal risks as ‘erosion of social cohesion’ and ‘livelihood crises’ as the most immediate risks to the world.
| Time range | Category | Threatens | % of respondents |
|---|---|---|---|
| 0-2 years | 🟢 Environment | Extreme weather conditions | 31.1% |
| 0-2 years | 🔴 Societal | Livelihood crises | 30.4% |
| 0-2 years | 🟢 Environment | Failure of climate action | 27.5% |
| 0-2 years | 🔴 Societal | Erosion of social cohesion | 27.5% |
| 0-2 years | 🔴 Societal | Infectious diseases | 26.4% |
| 0-2 years | 🔴 Societal | Deterioration of mental health | 26.1% |
| 0-2 years | 🟣 Technological | Cybersecurity failure | 19.5% |
| 0-2 years | 🔵 Economical | Debt crisis | 19.3% |
| 0-2 years | 🟣 Technological | Digital inequality | 18.2% |
| 0-2 years | 🔵 Economical | Bursting of the asset bubble | 14.2% |
These societal risks have worsened since the onset of COVID-19. And as emerging variants threaten our path to normality, the pandemic continues to wreak havoc around the world, with no immediate signs of abating.
According to those interviewed, one of the problems triggered by the pandemic is the rise of inequalities, both globally and within countries.
Many developed economies have managed to adapt as office workers shift to remote and hybrid working, although many industries, such as hospitality, still face significant headwinds. Easy access to vaccines has helped these countries mitigate the worst effects of epidemics.
Regions with low access to vaccines have not been so lucky, and the economic divide could become more apparent as the pandemic spreads.
Medium-term risks
A majority of respondents believe that we will continue to struggle with pandemic-related issues over the next three years. As a result, the medium-term risks identified by the respondents are quite close to the short-term risks.
| Time range | Category | Threatens | % of respondents |
|---|---|---|---|
| 2-5 years | 🟢 Environment | Failure of climate action | 35.7% |
| 2-5 years | 🟢 Environment | Extreme weather conditions | 34.6% |
| 2-5 years | 🔴 Societal | Erosion of social cohesion | 23.0% |
| 2-5 years | 🔴 Societal | Livelihood crises | 20.1% |
| 2-5 years | 🔵 Economical | Debt crisis | 19.0% |
| 2-5 years | 🟢 Environment | Man-made environmental damage | 16.4% |
| 2-5 years | 🟡 Geopolitics | Geoeconomic clashes | 14.8% |
| 2-5 years | 🟣 Technological | Cybersecurity failure | 14.6% |
| 2-5 years | 🟢 Environment | Loss of biodiversity | 13.5% |
| 2-5 years | 🔵 Economical | Bursting of the asset bubble | 12.7% |
The pressing issues caused by COVID-19 mean that many governments and key decision-makers are struggling to prioritize long-term planning and no longer have the capacity to help solve global problems. For example, the British government has postponed its foreign aid target until at least 2024. If countries continue to prioritize each other in an effort to mitigate the impact of COVID-19, the inequality gap could widen further.
Respondents also worry about rising debt levels triggering a crisis. The debt-to-GDP ratio overall increased by 13 percentage points in 2020, a figure that will almost certainly continue to increase in the near future.
Long term risks
Respondents identified climate change as the greatest threat to humanity over the next decade.
| Time range | Category | Threatens | % of respondents |
|---|---|---|---|
| 5-10 years | 🟢 Environment | Failure of climate action | 42.1% |
| 5-10 years | 🟢 Environment | Extreme weather conditions | 32.4% |
| 5-10 years | 🟢 Environment | Loss of biodiversity | 27.0% |
| 5-10 years | 🟢 Environment | Natural resource crises | 23.0% |
| 5-10 years | 🟢 Environment | Man-made environmental damage | 21.7% |
| 5-10 years | 🔴 Societal | Erosion of social cohesion | 19.1% |
| 5-10 years | 🔴 Societal | Involuntary migration | 15.0% |
| 5-10 years | 🟣 Technological | Unfavorable technological advances | 14.9% |
| 5-10 years | 🟡 Geopolitics | Geoeconomic clashes | 14.1% |
| 5-10 years | 🟡 Geopolitics | Contestation of geopolitical resources | 13.5% |
Climate inaction – essentially the status quo – could lead to a loss of global GDP of between 4% and 18%, with varying impacts depending on the region.
Experts have also pointed out that current decarbonization commitments made at COP26 last year are still not enough to slow warming to the 1.5°C target set in the Paris Agreement on climate change. climate, so more action is needed to mitigate environmental risks.
That said, efforts to curb climate change and address long-term problems are likely to have short-term negative effects on the global economy and society. Risk mitigation efforts must therefore be put in place as we strive to reach net zero and ultimately slow climate change.
Risk mitigation efforts
People’s views on risk mitigation were assessed in the WEF survey. Respondents were asked to identify which risks our world is best equipped to deal with and which ones they think we are least prepared for.
‘Trade facilitation’, ‘international crime’ and ‘weapons of mass destruction’ were risks that respondents felt we had effectively prepared for. On the other hand, ‘artificial intelligence’ and ‘cross-border cyberattacks and disinformation’ are areas that most respondents believe we are least protected against.
As society becomes increasingly reliant on digital infrastructure, experts predict we will see an increase in cyberattacks and cybercrime. New AI-based technologies that offer ransomware as a service allow anyone to engage in cybercrime, even those who lack the technical knowledge to create malware.
How are we progressing?
Based on the results of this year’s survey, the WEF has identified five lessons that governments, businesses and policymakers should use to build resilience and prepare for future challenges:
- Building a Holistic Mitigation Framework: Rather than focusing on specific risks, it is useful to identify the overall worst-case scenario and work from there. Build holistic systems that protect against negative outcomes.
- Consider the whole ecosystem: Examine third-party services and external assets, and analyze the broader ecosystem in which you operate.
- Embracing diversity in resilience strategies: Not all strategies will work at all levels. Complex problems will require nuanced efforts. Adaptability is key.
- Link resilience efforts to other goals: Many resilience efforts could benefit multiple aspects of society. For example, efficient supply chains could strengthen communities and contribute to environmental goals.
- Think of resilience as a journey, not a destination: Remaining nimble and vigilant is essential when building resilience programs, as these efforts are new and require reflection to improve.
The coming years will be fraught with complex challenges, and our best chance of mitigating these global risks is through increased collaboration and constant reassessment.
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