The WEF Global Risks Report 2022 — Legitimate reasons for concern?
In its recent global risks report, the World Economic Forum (WEF) forecasts numerous challenges to be overcome in the coming years.
Since the start of the pandemic, the risks to society and the environment have worsened further. Two years after the first case of COVID-19, countries have reported record infections due to the Omicron variant, but the epidemic pales in comparison to the long-term risks the world faces from climate change.
The WEF Global Risks Report 2022 showed that in addition to the climate crisis, key long-term global risks include a widening social divide, heightened cybersecurity risks and an uneven recovery as the pandemic persists around the world. The devastating impact of major risks could reshape our world over the next decade. This year’s Global Risk Report is also based on the views of more than 12,000 leaders across world who have identified critical short-term risks for their 124 countries, collected in a World Economic Forum policy poll. The areas highlighted in these responses are likely to inform national decision-making and provide insight into how national short-term risk priorities compare to global risks and outlooks. Despite all the gloomy forecasts, there is still reason to hope for more positive results as the 2022 Global Risks Report includes lessons on resilience to the COVID-19 pandemic, advice for cooperation in space, increased cyber resilience and a more coherent approach to climate change. In fact, the report aims to inspire a new economy and society, accelerate climate change action for people and the planet, harness industry transformation, and strengthen global and regional cooperation.
The economic impact of the pandemic resulting in labor market imbalances, protectionist policies, and widened education and skills gaps, with the risk of dividing the world into different trajectories.
The 2022 Report’s top 10 global risks for the next 10 years are dominated by environmental (five) and social (three) risks, with one risk in each economic and geopolitical category. The report reveals the health of the planet in the next decade as a big concern due to inaction on climate change, extreme weather and biodiversity loss as top three risks. Expert respondents of the report cited “climate action failure” as the world’s number one long-term threat and the risk that could have the most severe consequences over the next decade. The authors also note that the economic impact of the pandemic resulting in labor market imbalances, protectionist policies, and widened education and skills gaps, with the risk of dividing the world into different trajectories. Consequently, the biggest problem that persists after the pandemic is economic stagnation. While the main long-term risks are related to the climate crisis, the most important short-term issues include social divisions, livelihood crises and declining mental health. In the longer term, geopolitical and technological risks are also a source of concern, including geo-economic comparisons, challenging geopolitical assets and cybersecurity failure.
Infectious diseases top the list of key impact risks over the next decade, followed by environmental risks such as addressing climate change; and weapons of mass destruction, livelihood crises, debt crises and IT infrastructure failures. When it comes to the time frame in which these risks will become a serious threat to the world, the most imminent threats — most likely within the next two years — include jobs and livelihood crises, widespread youth disillusionment, the digital divide, economic stagnation. Man-made environmental damage, erosion of social cohesion and terrorist attacks. The climate crisis and growing social unrest are the two main risks discussed in this report, which, like previous reports, examines the emerging and changing risks the world will face over the next 10 years. Undoubtedly, the report’s authors point to the ongoing negative impact of the pandemic, now in its third year, directly or indirectly affecting many key economic and social risks.
A blind spot in perception given the potential harm of cyberrisks , economic, social and environmental issues
Asked to analyse the past two years , the report’s respondents responded that they perceive risks to society — in the form of “erosion of social cohesion”, “crisis of livelihoods” and “deteriorating mental health” — as those who have worsened the most since the start of the COVID-19 pandemic. This may suggest a blind spot in perception given the potential harm of cyberrisks , economic, social and environmental issues, according to the interpretation of the report’s findings. While cybersecurity was cited as a short-to-medium-term risk, the report’s authors are concerned that the issue has not been rated higher, suggesting its risk is taken seriously enough by companies and governments.
By 2024, the global economy is projected to be 2.3% smaller than it would be without the pandemic. However, globally, the economic fallout from the COVID-19 crisis and weakening social cohesion could limit the financial and political capital available for stronger climate change action. This global divergence will affect the world’s ability to address common challenges, including climate change, improved digital security, rebuilding livelihoods and social cohesion, and managing competition in space. These sustainability lessons exemplify a recurring theme in the report, which is that a coordinated global response to all the challenges facing the planet, with a long-term approach to risk management, is critical.
Cybersecurity and space pose new risks to the global economy, compounding existing challenges related to climate change and the coronavirus pandemic. Associated with the global implications of the Internet, the acceleration of space activities, which the report says has led to an increased risk of collisions and subsequent release of space debris, adds to the mismanagement of competition in space. Over the next five years, respondents cited risks to society and the environment as the most important.
The risk of “youth disenchantment” is largely ignored by the global community, according to the Global Risks Report, but will become a fundamental threat to the world in the short term. Growing insecurity in the form of economic hardship, the worsening effects of climate change and political persecution will force millions of people to leave their homes in search of a better future. Loss of life and livelihoods will increase the risk of “erosion of social cohesion”, which is also a critical short-term threat to be expressed.
Without credible and well thought-out action plans, the next reports will not bring any progress in the right direction.
To conclude, without credible and well thought-out action plans, the next reports will not bring any progress in the right direction. Many of the topics addressed are not new and have already been addressed in past reports. Without doubt, the COVID-19 pandemic has heightened awareness of how organizations can improve resilience and align it with other goals by leveraging various skills and methods. Furthermore, there are chances for governments, corporations, and communities to work together to develop a whole-of-society strategy that will improve national readiness for the various types of crises that are on the horizon. It remains to be seen how much benefit and action this year’s report has achieved.
