The Global Risks Report 2016 – Frequently Asked Questions (FAQ)
What is the aim of The Global Risks Report 2016?
The Global Risks Report 2016 is a tool for stimulating dialogue among policy-makers, business executives and thought leaders around the world. It is also a call to action to improve international efforts at coordination and collaboration to equip institutions to understand, monitor, manage and mitigate global risks, prepare for them and strengthen resilience.
How do you define global risks?
This year’s Report looks at 29 global risks across five categories: economic, environmental, societal, geopolitical and technological. A global risk is defined as “an uncertain event or condition that, if it occurs, can cause significant negative impact for several countries or industries within the next 10 years”. A key characteristic of global risks is their potential systemic nature – they have the potential to affect an entire system, as opposed to individual parts and components.
How do you define a trend?
The Report features 13 trends. A trend is defined as “a long-term pattern that is currently taking place and that could contribute to amplifying global risks and/or altering the relationship between them”. Trends are seen as a driver of risks. This year, climate change, rising income and wealth disparity and the rise of cyber dependency are the three trends assessed as most important in shaping global development in the next 10 years.
What are the main findings of the Report?
Three overall key findings emerge from the Global Risks Perception Survey and are developed in detail in Part 1 of The Global Risks Report 2016:
- The potential for climate change to exacerbate water crises, with impacts including conflict and more forced migration, calling for improved water governance to adapt to climate change and accommodate a growing population and economic development (global risk of failure to mitigate and adapt to climate change top most impactful risk this year, followed by water crises as third most impactful)
- The need to address the global refugee crisis, adding emphasis to policies that can build resilience in addition to responding to the immediate crisis (large-scale involuntary migration number one most likely risk this year, and fourth most impactful)
- The risks of failing to fully understand the risks of the Fourth Industrial Revolution and how this transition will impact countries, economies and people at a time of persistently sluggish growth
What are the most impactful global risks in this year’s Report?
Failure of climate change mitigation and adaptation, for the first time since 2006 (1st); weapons of mass destruction (2nd); water crises (3rd); large-scale involuntary migration (4th), and severe energy price shock (5th).
What are the most likely global risks in this year’s Report?
Large-scale involuntary migration (1st); extreme weather events (2nd); failure of climate change mitigation and adaptation (3rd); interstate conflict with regional consequences (4th); and major natural catastrophes (5th).
Which risks have increased/decreased compared to previous Reports?
The global risk with the highest increase in perception of likelihood and impact is notably large-scale involuntary migration, now rated as the most likely and fourth most impactful. Other risks gaining in prominence on both dimensions include profound social instability – also one of the most highly interconnected and two environmental risks: climate change mitigation and adaptation, and biodiversity loss and ecosystem collapse.
What does the Report tell us about how risks are evolving?
Since 2007, four storylines emerge.
- Economic risks dominated during the crisis. Pre-crises, these were asset price collapse, followed by major systemic financial failures and fiscal crises post-crisis.
- Slow-burning environmental and societal risks are taking over as of 2011. Most prominently, extreme weather events (second most likely 2014-2016), climate change (among Top 5 most impactful since 2013, rising to the top in 2016), income disparity (top most likely risk in 2013), water crises (top most impactful risk in 2015), and climate change (top most impactful risk in 2016).
- The year marked the entry of geopolitical risks (interstate conflict top most likely risk in 2015, fourth most impactful) as fourth most likely in 2016.
- The year 2016 marks an unprecedented broad risk landscape for the 11 years the report has been measuring global risks. For the first time, four out of five categories – environmental, geopolitical, societal and economic – feature among the top five most impactful risks. The only category not to feature is technological risk, where the highest-ranking risk is cyberattack, in 11th position in both likelihood and impact.
What is the Global Risks Perception Survey?
The Global Risks Perception Survey (GRPS) is the main instrument used to assess global risks in this Report. The GRPS for The Global Risks Report 2016 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. The GRPS captures the responses of 742 Members.
Do 750 experts really know it all?
Respondents are drawn from across four sectors: public, private, civil society and academia. The sample, as in the past, shows a very even distribution across geographies. A quarter of the respondents were aged under 25, factoring in the voice of youth. About 30% of respondents are from Europe, followed by 17% from North America and the rest from the rest of world. Moreover, 55% of respondents come from advanced economies and 45% from emerging and developing economies.
What is the Executive Opinion Survey (specifically for Part 4 of The Global Risks Report 2016)?
Every year since 1979, the World Economic Forum has conducted its Executive Opinion Survey (EOS). Capturing executives’ perspectives on a broad range of socio-economic issues, the EOS primarily informs the World Economic Forum’s annual Global Competitiveness Report and its derivatives. The 2015 edition of the EOS, conducted between February and June, surveyed over 13,000 executives in 144 economies. EOS respondents were asked to select the five global risks that they were most concerned about for doing business in their country within the next 10 years, choosing from the set of 28 global risks presented in the The Global Risks Report 2015. More details of the methodology and the EOS can be found in Appendix C of the Report.