Definitions

The Global Risks Report 2016 is based on the same methodology adopted in the previous year and results are therefore largely comparable. The Report adopts the following definitions of global risk and trend:

Global risk: an uncertain event or condition that, if it occurs, can cause significant negative impact for several countries or industries within the next 10 years.

Trend: a long-term pattern that is currently taking place and that could contribute to amplifying global risks and/or altering the relationship between them. 

The list of risks and trends assessed in the Global Risks Perception Surveys has changed slightly. The risk “Illicit trade” was extracted from the risk “Failure of national governance” to create another risk in the economic category. Moreover, the risk “Massive and widespread misuse of technologies (e.g. 3D printing, artificial intelligence, geo-engineering, synthetic biology, etc.) was reformulated into the risk “Adverse consequence of technological advances”. The definition of each risk also went through a review process. 

The following section describes the survey and methodology in greater detail. 

The Global Risks Perceptions Survey 

The Global Risks Perception Survey (GRPS), discussed in Part 1, is the main instrument used to assess global risks in this Report. The survey was conducted between mid-September and the end of October 2015 among the World Economic Forum’s multistakeholder communities of leaders from business, government, academia and non-governmental and international organizations.

Raw responses were cleaned in order to improve overall data quality and completeness. All questionnaires with a completion rate below 50% were dropped, reducing the number of available responses from 933 to 742. The respondents did not provide any information about their gender or the sector in 3 and 49 cases, respectively, but it was possible to infer this information from the rest of the records provided for the gender and for 39 cases for the sector. Similarly, 92 respondents did not indicate the region in which they are based and 77 were manually assigned to a region on the basis of their country of residence.

Figure B.1 presents the profile of the 742 survey respondents remaining in the sample. To capture the voice of youth, the survey also targeted the World Economic Forum’s community of Global Shapers.¹ Respondents under 30 accounted for slightly more than one-fourth of total respondents. 

Figure B.1: Survey Sample Composition

 

 

Source: Global Risks Perception Survey 2015. Note: Reported shares are based on number of valid responses: Gender: 742 responses; Expertise: 726; Organization type: 732; Age distribution: 742; Region: 727.

Analysis

The Global Risks Landscape 2016 (Figure 1)

Respondents were asked to assess the likelihood and global impact of each of the 29 risks. For each risk, they were asked, “How likely is this risk to occur globally within the next 10 years?” and “What is the estimated impact globally if this risk were to materialize? (Impact is to be interpreted in a broad sense beyond just economic consequences)”. The possible answers ranged from 1 (“very unlikely” and “low” impact, respectively) to 7 (“very likely” and “high” impact, respectively). 

Respondents were given the possibility to choose a “Don’t know” option if they felt unable to provide an informed answer. Respondents could also leave the question completely blank. For each risk, partial responses, i.e. those assessing only the likelihood or only the impact, were dropped. A simple average for both likelihood and impact for each of the 29 global risks was calculated on this basis. Formally, for any given risk i, its likelihood and impact, denoted respectively likelihood_i and impact_i, are:

where N_i is the number of respondents for risk i, and likelihood_i,n and impact_i,n are respectively the likelihood and impact assigned by respondent n to risk i and measured on a scale from 1 to 7. N_i is the number of respondents for risk i who assessed both the likelihood and impact of that risk.  

The Global Risks Interconnections Map 2016 (Figure 2) and The Risks-Trends Interconnections Map 2016 (Figure 4) 

To draw the Global Risks Interconnections Map in Part 1, survey respondents were asked to answer the following question: “In your view, which are the most strongly connected risks? Please select at least three pairs and up to six pairs from the 29 risks below (one risk can be connected to any one of the other 28 risks)”.

Similarly, for the Risks-Trends Interconnections Map 2016 respondents had to identify up to three trends that they consider important in shaping the global agenda in the next 10 years and the three risks that are driven by each of those trends. For completeness, the two questions read “From the list of trends below, which are the three most important trends that will shape global development in the next 10 years”; and “For each of the three trends identified in [the previous question], select up to three risks from the list below that are most strongly driven by these trends”. The information thereby obtained was used to construct the Risks-Trend Interconnections Map 2016. 

In both cases, a tally was made of the number of times each pair was cited. This value was then divided by the count of the most frequently cited pair. As a final step, the square root of this ratio was taken to dampen the long-tail effect (i.e. a few very strong links, and many weak ones) and to make the differences more apparent across the weakest connections. Out of the 406 possible pairs of risks, 167 or 41% were not cited. Similarly, out of the possible 377 trend-risk combinations, 33 or 9% were not cited. Formally, the intensity of the interconnection between risks i and j (or between trend i and risk j), denoted interconnection_ij, corresponds to:

where N is the number of respondents. 

Variable pair_ij,n is 1 when respondent n selected the pair of risks i and j as part of his/her selection. Otherwise, it is 0. The value of the interconnection determines the thickness of each connecting line in the graph, with the most frequently cited pair having the thickest line.

In the Global Risks Landscape and Risks-Trends Interconnections Maps, the size of each risk is scaled according to the “weighted degree” of that node in the system. Moreover, in the Risks-Trends Interconnections Map, the size of the trend represents the perception of its importance in shaping global development (answer to the first part of the question on trend as explained above); the biggest trend is the one considered to be the most important in shaping global development. 

The placement of the nodes in the Global Risks-Trends Interconnections Map was computed using ForceAtlas2, a force-directed network layout algorithm implemented in Gephi software, which minimizes edge lengths and edge crossings by running a physical particle simulation.²

Global Risks of Highest Concern in 2016 (Figure 1.2)

Although the Report generally looks at global risks on a time horizon of 10 years, respondents were asked to identify the risks of highest concern within two different timeframes: 18 months and 10 years. To identify the top five global risks of highest concern described in Part 1, respondents answered the following question: “In this survey, we are looking at risks within the next 10 years. For this question only, please select the five global risks that you believe to be of most concern within the next 18 months and 10 years, respectively”.

For any given risk i from the list of 29 risks, we obtained the share of total respondents (N = 742) that have declared to be concerned about that risk: 

with c_i,n ∈ {0,1} and equal to 1 if respondent N selected risk i as a risk of concern. The risks with the five highest shares were selected as the risks of most concern.

The Most Likely Global Risks 2016: A Regional Perspective (Figure 3)

In the survey, respondents were asked to identify up to three risks that were the most likely to occur in the region in which they are based.³ 

For any given risk i from the list of 29 risks, we obtained the share of respondents from region r (N_r) who think that risk i is the most likely to occur in their region: 

with l_i,n ∈ {0,1} and equal to 1 if respondent N selected risk i.