The annual Global Risks Report from the World Economic Forum is a must-read document for business. … [+]
Each year there are a handful of informative reports to look forward to. The World Economic Forum’s Global Risks Report is one of them. This year’s report focuses on education, economy government It is based on interviews with more than 1,200 experts from the international community and civil society. “’Global risk’ means global GDP, if an event or condition occurs; It is defined as the likelihood of an event or condition occurring that will negatively affect a significant proportion of the population or natural resources.
The report lists the current risks. But also look at the most important risks in the short-term – the two-year horizon and the long-term over the next ten years.
Current global risks
Current disclosure of risks ranked by severity.
energy supply crisis; Regular readers of The Cost of Living Crisis shouldn’t be surprised. Rising inflation as top three risks. Interestingly, Experts do not believe that the energy supply crisis will last long. It is not listed as a top risk in the short term – two years from now.
Short-term global risks
The top 10 risks ranked by severity for the next two years can be seen in the figure below.
Global risks ranked by short-term (2-year) severity
The cost of living crisis is widely seen as a short-term risk, which will ease after reaching its worst in the next two years. While the inflation picture has improved and the chances of a short recession or soft landing have improved, the downside risk of a major recession cannot be ignored.
Meanwhile, the third biggest threat, geoeconomic confrontation, is expected to remain macroeconomic in nature in the short term. Economically, that means sanctions instead of war. Tariffs and investment inspections are seen to be increasingly used to constrain state competitors.
Long-term global risks
The main thing you’ll notice when comparing short-term risks to long-term risks is that risks emerging in ten years have moved to the top of the list of environmental risks. In the two-year horizon, “natural disasters and extreme weather events” and “climate change mitigation” are the four environmental hazards. Over a ten-year horizon, these include “failure to adapt to climate change” and “biodiversity loss and ecosystem collapse”.
“Failure to adapt to climate change” is defined as “the lack of climate-resilient infrastructure, such as the lack of climate-resilient infrastructure, in effective climate change measures by governments; to be enforced by businesses and individuals; On the contrary, “Failure to mitigate climate change” is defined as “the failure of governments, businesses and individuals to take effective climate change mitigation measures, such as reducing economic carbon dioxide emissions.”
Global risks ranked by severity over the long term (10 years).
Threat of Polycrises
This year’s report introduced the term “policies”. Simultaneous shock, A polycrisis occurs when deeply interrelated risks and resilience decline. These “diverse crises interact to far exceed the total impact of each component.” The concept of polycrises and interrelated risks applies not only to the country, but also to business and supply chain management.
Risk of Interaction: The Erosion of Social Cohesion.
The risks are necessarily interrelated. The report maps out how specific risks, such as “the breakdown of social cohesion”, are linked to other risks.
Conclusion
This report is written to explain the risks at the national and global levels. Thus, an entrepreneur is not necessarily immune to perceived risks such as labor shortages. Nevertheless, Business executives should carefully consider the risks identified in this report.
Unfortunately for entrepreneurs, this report came out in January. This report is very useful as companies go through their strategic planning process. For most companies, This occurs at the end of the year. Download this report and get on with it.
