The 15th edition of the World Economic Forum’s Global Risks Report comes as long-mounting, interconnected risks are being felt. The global economy is faced with a “synchronized slowdown”, the past five years have been the warmest on record, and cyberattacks are expected to increase this year—all while citizens protest the political and economic conditions in their countries and voice concerns about systems that exacerbate inequality. Indeed, the growing palpability of shared economic, environmental and societal risks signals that the horizon has shortened for preventing—or even mitigating—some of the direst consequences of global risks. It is sobering that in the face of this development, when the challenges before us demand immediate collective action, fractures within the global community appear to only be widening.
Global commerce has historically been a pillar and engine of growth—and a key tool for lifting economies out of downturns—but as we warn, significant restrictions were placed on global trade last year. This comes as G20 economies hold record high levels of debt and exhibit relatively low levels of growth. Ammunition to fight a potential recession is lacking, and there is a possibility of an extended low-growth period, akin to the 1970s, if lack of coordinated action continues. In addition, a potential decoupling of the world’s largest economies, the United States and China, is cause for further concern. The question for stakeholders—one that cannot be answered in the affirmative—is whether in the face of a prolonged global slowdown we are positioned in a way that will foster resiliency and prosperity.
On the environment, we note with grave concern the consequences of continued environmental degradation, including the record pace of species decline. Respondents to our Global Risks Perception Survey are also sounding the alarm, ranking climate change and related environmental issues as the top five risks in terms of likelihood—the first time in the survey’s history that one category has occupied all five of the top spots. But despite the need to be more ambitious when it comes to climate action, the UN has warned that countries have veered off course when it comes to meeting their commitments under the Paris Agreement on climate change.
And on global health and technology, we caution that international systems have not kept up to date with the challenges of these domains. The global community is ill-positioned to address vulnerabilities that have come alongside the advancements of the 20th century, whether they be the widening application of artificial intelligence or the widespread use of antibiotics.
Today’s risk landscape is being shaped in significant measure by an unsettled geopolitical environment—one in which new centres of power and influence are forming—as old alliance structures and global institutions are being tested. While these changes can create openings for new partnership structures, in the immediate term, they are putting stress on systems of coordination and challenging norms around shared responsibility. Unless stakeholders adapt multilateral mechanisms for this turbulent period, the risks that were once on the horizon will continue to arrive.
The good news is that the window for action is still open, if not for much longer. And, despite global divisions, we continue to see members of the business community signal their commitment to looking beyond their balance sheets and towards the urgent priorities ahead.
The Global Risks Initiative
It is fitting that this year’s report, which makes clear the need for a multistakeholder approach to mitigating risk, coincides with the Forum’s 50th anniversary. As the international organization for public-private cooperation, the Forum brings together leaders from the business, government and non-profit communities for action-oriented deliberations and uses the conclusions of this report to inform its multistakeholder initiatives throughout the year.
Indeed, the Global Risks Report is itself the result of a multistakeholder process. I am grateful for the long-standing relationship with our strategic partners, Marsh & McLennan and Zurich Insurance Group, who offered invaluable input to produce this publication. I am also grateful to our academic partners: the National University of Singapore, the Oxford Martin School of the University of Oxford, and the Wharton Risk Management and Decision Processes Center at the University of Pennsylvania. Over the course of developing the report, the Forum benefited from a committed Advisory Board, who shaped the direction of early drafts and provided beneficial comments and insight throughout the writing process. The Forum also hosted a range of representatives from the public and private sectors in September and October for discussions in Geneva, New York and Washington, DC, insights from which can be found in these pages.
The foundation of the report is our annual Global Risks Perception Survey, completed by approximately 800 members of the Forum’s diverse communities. I am particularly proud that for the first time we are also featuring the results from more than 200 members of our Global Shapers Community—a generation of emerging global social entrepreneurs and leaders. This younger generation is increasingly using its digital savviness—and its feet—to spotlight issues, particularly relating to climate change, that it sees as existential risks not only to its generation but to the wider global community.
The Global Risks Report is part of an expanded Global Risks Initiative launched by the Forum this past year that includes sustained analysis at the global, regional and industry levels. It is this qualitative and quantitative study of global risks, conducted in partnership with members of the business, academic and public-sector communities, that we hope will help bring stakeholders together in developing sustainable, integrated solutions to the world’s most pressing challenges.
President, World Economic Forum
For an overview, please see the Executive Summary.