Appendix A: Descriptions of Global Risks 2020
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.
To ensure legibility, the names of the global risks have been abbreviated in the figures. The portion of the full name used in the abbreviation is in bold.
Global Risks Perception Survey
The Global Risks Perception Survey (GRPS) is the World Economic Forum’s source of original risks data, harnessing the expertise of the Forum’s extensive network of business, government, civil society and thought leaders. The survey was conducted from 5 September to 22 October 2019 among the World Economic Forum’s multistakeholder communities (including the Global Shapers Community), the professional networks of its Advisory Board, and members of the Institute of Risk Management. The results of the GRPS are used to create the Global Risks Landscape and Interconnections Map presented at the beginning of the report, and to offer insights used throughout.
Both the GRPS and the Global Risks Report adopt the following definition of global risk:
Global risk: A “global risk” is an uncertain event or condition that, if it occurs, can cause significant negative impact for several countries or industries within the next 10 years.
The world in 2020
In the first section of the GRPS, respondents were asked to assess whether the risks associated with 40 current issues would increase or decrease in 2020 compared to 2019 (see Table B.1 below for full results). Respondents were also given the option to name any other issue(s), not included in the 40 risks listed that they expect to be a source of increased risk in 2020. We use these open responses to assess the need to update our list of risks from year to year.
The possible answers to survey questions ranged from “significantly decrease” to “significantly increase” on a scale from 1 to 5, with 1 representing “significantly decrease” and 5 representing “significantly increase”. To reduce framing bias, the values between this range were not assigned specific wording. For each risk, the share for each answer was obtained by dividing the number of respondents who selected that answer by the total number of answers.
Respondents were asked to base their answers to each of these 40 risks on a global level. They were asked the following question: “On a global level, do you think that in 2020 the risks presented by the following issues will increase or decrease compared to 2019?”
The global risks landscape
For each of the 30 global risks listed in Appendix A, respondents were asked to assess: (1) the likelihood of each global risk occurring over the course of the next 10 years, and (2) the severity of its impact at a global level if it were to occur, both on a scale from 1 to 5 as follows:
– Likelihood: a value of 1 for “very unlikely” and 5 for “very likely”
– Impact: a value of 1 for “minimal” impact and 5 for “catastrophic” impact
To reduce timing bias, respondents were reminded to assess the 30 risks over a 10-year period, as opposed to a time horizon of one year for the previous 40 risks. Again, to reduce framing bias, the values within the 1–5 scale were not assigned specific wording. Respondents could leave the question completely blank. Partial responses for any risk—those assessing only the likelihood of occurrence or only the negative impact—were not included in the results.
A simple average for both likelihood and impact for each of the 30 global risks was calculated on this basis. The results are illustrated in the Global Risks Landscape 2020 (Figure II).
Formally, for any given risk i, its likelihood and impact—denoted respectively likelihoodi and impacti—are:
where Ni is the number of respondents for risk i, and likelihoodi,n and impacti,n are, respectively, the likelihood and impact assigned by respondent n to risk i. The likelihood is measured on a scale of 1–5 and the impact on a scale of 1–5. Ni is the number of respondents for risk i who assessed both the likelihood and impact of that specific risk.
Global risks interconnections
Part 3 of the GRPS assesses interconnections between pairs of global risks.
For the interconnections between pairs of risks, survey respondents were asked the following question: “Global risks are not isolated, and it is important to assess their interconnections. In your view, which are the most strongly connected global risks? Please select three to six pairs of global risks, from the 30 global risks below (one risk can be connected to any one of the other 29 global risks).” The results are illustrated in the Global Risks Interconnections Map 2020 (Figure IV). A tally was made of the number of times each pair was cited.
In the Global Risks Landscape and the Interconnections Map, the size of each risk is scaled according to the weight of that node in the system.
We received 1,047 total responses to the GRPS to which we applied an overall standard deviation check, as well as specific completion thresholds for each section of the survey:
– Overall: nine responses yielded a standard deviation of zero in the increase/decrease scores for Part 1 of the survey, as well as the likelihood and impact scores for Part 2. These responses were not included in the survey results.
– Part 1 “The World in 2020”: The answers from the 777 respondents who assessed at least four of the risks listed in this question were used to compute the results.
– Part 2 “Assessment of Global Risks”: The answers from the 718 respondents who assessed the impact and likelihood of at least one risk were used to compute the results (leaving the question entirely blank was not considered a valid answer).
– Part 3 “Global Risk Interconnections”: The answers from the 628 respondents who selected at least one valid pair of risks were used to compute the results.
Figure B.1 presents some key descriptive statistics and information about the profiles of the respondents.