Strategic Partner of the Global Risks Report 2016

Insight Report

The Global Risks

Report 2016
11th Edition
The Global Risks Report 2016, 11th Edition is
published by the World Economic Forum within
the framework of The Global Competitiveness
and Risks Team.

The information in this report, or on which

this report is based, has been obtained from
sources that the authors believe to be reliable
and accurate. However, it has not been
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accuracy or completeness of any information
obtained from third parties. In addition, the
statements in this report may provide current
expectations of future events based on certain
assumptions and include any statement that
does not directly relate to a historical fact
or a current fact. These statements involve
known and unknown risks, uncertainties and
other factors which are not exhaustive. The
companies contributing to this report operate
in a continually changing environment and
new risks emerge continually. Readers are
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Figure 1: The Global Risks Landscape 2016

Failure of climate-change
mitigation and adaptation

Weapons of mass destruction Energy price shock Water crises

Large-scale involuntary
migration
Biodiversity loss and
Fiscal crises
ecosystem collapse
Profound social instability
5.0 Spread of infectious diseases Asset bubble
Cyberattacks
Food crises
Unemployment or Interstate conflict
underemployment
Critical information
infrastructure breakdown Terrorist attacks
4.76 Failure of financial
mechanism or institution
average

Extreme weather events

Adverse consequences of
Deflation
Data fraud Natural catastrophes
4.5 technological advances
or theft
Failure of
State collapse or crisis national governance
Unmanageable inflation

Man-made environmental
catastrophes

Illicit trade

Failure of critical
infrastructure

4.0

Failure of urban planning

3.5 4.0 4.5 5.0 5.5

4.87
average

Source: Global Risks Perception Survey 2015.

Note: Survey respondents were asked to assess the likelihood and impact of the individual risks on a scale of 1 to 7, 1 representing a risk that is not likely to happen or have
impact, and 7 a risk that is very likely to occur and have massive and devastating impacts. See Appendix B for more details. To ensure legibility, the names of the global risks
are abbreviated; see Appendix A for the full name and description.
Figure 2: The Global Risks Interconnections Map 2016

Natural catastrophes

Biodiversity loss and

ecosystem collapse

Food crises
Spread of infectious diseases
Extreme weather events

Man-made environmental
catastrophes

Water crises
Failure of climate-change
mitigation and adaptation
Failure of critical
infrastructure

Failure of urban planning

Profound social instability

Energy price shock

State collapse or crisis Large-scale

Critical information involuntary migration
infrastructure breakdown

Unmanageable inflation
Adverse consequences of
technological advances

Failure of national governance

Interstate conflict

Fiscal crises
Asset bubble

Weapons of mass destruction

Unemployment or
underemployment
Cyberattacks

Illicit trade Deflation

Terrorist attacks

Data fraud or theft

Failure of financial mechanism
or institution

Source: Global Risks Perception Survey 2015.

Note: Survey respondents were asked to identify between three and six pairs of global risks they believe to be most interconnected. See Appendix B for more details. To
ensure legibility, the names of the global risks are abbreviated; see Appendix A for the full name and description.
 Table A: Global Risks 2016
World Economic Forum Global Risk Report Graphics World Economic Forum Global Risk Report Graphics World Economic Forum Global Risk Report Graphics

1. Economic 1. Economic 2. Environmental 3. GeoPolitical 4. Societal

Asset bubble in a major Extreme weather events World Economic Forum Global Risk Report Graphics

Failure of urban planning

World Economic Forum Global Risk Report Graphics

1.1

Risk: Asset bubble in a major

economy
1.2

Risk: Deflation in a major

1.3.

Risk: Failure of a major financial

1.4.

Risk: Failure/shortfall of critical

World Economic Forum Global Risk Report Graphics
1.9.

Risk: Unmanageable inflation

2.1.

Risk: Extreme weather events

(e.g. floods, storms, etc.)
2.2.

Risk: Failure of climate-change

2.3.

Risk: Major biodiversity loss

3.3.

Risk: Large-scale terrorist attacks

3.4.

Risk: State collapse or crisis (e.g.

3.5.

Risk: Weapons of mass

4. Societal
4.1.

Risk: Failure of urban planning

economy economy mechanism or institution infrastructure (e.g. floods, storms, etc.) mitigation and adaptation and ecosystem collapse (land civil conflict, military coup, failed destruction

Food crises
Unmanageable increase in the general Individuals or non-state groups with Poorly planned cities, urban sprawl and
1. Economic price level of goods and services in Major property, infrastructure and Governments and businesses fail to
or ocean) political or religious goals successfully states, etc.) associated infrastructure create social,
Unsustainably overpriced assets such as Prolonged ultra-low inflation or deflation Collapse of a financial institution and/ Failure to adequately invest in, upgrade Nuclear, chemical, biological and
commodities, housing, shares, etc. in a in a major economy or region. or malfunctioning of a financial system and secure infrastructure networks 1. Economic 2.
keyEnvironmental
economies. environmental damage as well as human Irreversible consequences for the inflict large-scale human or material State collapse of geopolitical importance radiological technologies and materials environmental and health challenges.
major economy or region. impacts the global economy. (e.g. energy, transportation and loss caused by extreme weather events. to mitigate climate change, protect environment, resulting in severely damage. due to internal violence, regional or global are deployed creating international crises

Deflation in a major Failure of climate-change

communications) leads to pressure or a populations and help businesses Worldpotential
and Economic for
Forum Global Risk
significant Report Graphics
destruction.
depleted resources for humankind as instability, military coup, civil conflict, failed
breakdown with system-wide implications. impacted by climate change to adapt. well as industries. states, etc.

IDEA IDEA IDEA IDEA IDEA IDEA IDEA IDEA IDEA IDEA IDEA IDEA

• House icons, which could also be interpreted as an • Graph displaying a decrease, to signify deflation • Bank icon with broken pillars, to suggest collapse • Broken train track to suggest breakdown • Price tag featuring multiple dollar symbols to • Tornado • Globe with thermometer, representing the • Upside-down fish with crosses for eyes, • Building in target sight • Burning flag • Mushroom cloud, to represent nuclear/chemical 4.2.
• Collection of urban buildings to represent an 4.3. 4.4. 4.5.
upwards arrow. The house represents the asset, represent high prices world climate representing environmental consequences 4. Societal

economy
of financial institution of transportation networks weapons urban area

mitigation and adaptation

whilst the arrow signifies the inflated price Risk: Food crises Risk: Large-scale involuntary Risk: Profound social instability Risk: Rapid and massive spread
migration of infectious diseases

Large-scale involuntary
Access to appropriate quantities and Major social movements or protests (e.g.
quality of food and nutrition becomes Large-scale involuntary migration induced street riots, social unrest, etc.) disrupt Bacteria, viruses, parasites or fungi
Forum Global Risk Report Graphics 1.1 1.2 1.3. 1.4.
by conflict, disasters, environmental or political or social stability, negatively cause uncontrolled spread of infectious
1.9. 2.1. 2.2. 2.3. a major scale. economic reasons. impacting populations and economic diseases (for instance due to resistance to
Risk: Asset bubble in a major Risk: Deflation in a major Risk: Failure of a major financial Risk: Failure/shortfall of critical activity. antibiotics, antivirals and other treatments)
economy economy mechanism or institution infrastructure World Economic Forum Global Risk Report Graphics Risk: Unmanageable inflation Risk: Extreme weather events Risk: Failure of climate-change Risk: Major biodiversity loss leading to widespread fatalities and
(e.g. floods, storms, etc.) mitigation and adaptation and ecosystem collapse (land

migration
Unsustainably overpriced assets such as Prolonged ultra-low inflation or deflation Collapse of a financial institution and/ Failure to adequately invest in, upgrade Unmanageable increase in the general economic disruption.
or ocean) World Economic Forum Global Risk Report Graphics
ic commodities, housing, shares, etc. in a in a major economy or region. or malfunctioning of a financial system and secure infrastructure networks price level of goods and services in Major property, infrastructure and Governments and businesses fail to
major economy or region. impacts the global economy. (e.g. energy, transportation and key economies. environmental damage as well as human Irreversible consequences for the
IDEA IDEA IDEA IDEA
communications) leads to pressure or a loss caused by extreme weather events. to mitigate climate change, protect environment, resulting in severely

Failure of a major financial Major biodiversity loss and ecosystem

• Wilted crop, to represent food crises • Passport/passport control icon to represent • Police figures with shields, to indicate dispute, • Virus
breakdown with system-wide implications. 1. Economic 2. Environmental populations and help businesses depleted resources for humankind as 4.2. 4.3. migration and the crossing of borders
4.4. riots and social unrest
4.5.
impacted by climate change to adapt. well as industries.
IDEA IDEA IDEA IDEA
4. Societal Risk: Food crises Risk: Large-scale involuntary Risk: Profound social instability Risk: Rapid and massive spread
• House icons, which could also be interpreted as an • Graph displaying a decrease, to signify deflation • Bank icon with broken pillars, to suggest collapse • Broken train track to suggest breakdown
IDEA IDEA IDEA IDEA migration of infectious diseases
Access to appropriate quantities and Major social movements or protests (e.g.
upwards arrow. The house represents the asset, of financial institution of transportation networks
whilst the arrow signifies the inflated price
• Price tag featuring multiple dollar symbols to • Tornado • Globe with thermometer, representing the • Upside-down fish with crosses for eyes, quality of food and nutrition becomes Large-scale involuntary migration induced street riots, social unrest, etc.) disrupt Bacteria, viruses, parasites or fungi

mechanism or institution collapse (land

represent high prices world climate representing environmental consequences political or social stability, negatively
by conflict, disasters, environmental or cause uncontrolled spread of infectious
a major scale. economic reasons. impacting populations and economic diseases (for instance due to resistance to

Profound social instability

activity. antibiotics, antivirals and other treatments)
leading to widespread fatalities and
economic disruption.
1.2 1.3. 1.4.

or ocean)
World Economic Forum Global Risk Report Graphics
bubble in a major Risk: Deflation in a major Risk: Failure of a major financial Risk: Failure/shortfall of critical IDEA IDEA IDEA IDEA

economy mechanism or institution infrastructure 1.9. 2.1. 2.2. 2.3.

• Wilted crop, to represent food crises • Passport/passport control icon to represent • Police figures with shields, to indicate dispute, • Virus
migration and the crossing of borders riots and social unrest
overpriced assets such as Prolonged ultra-low inflation or deflation Collapse of a financial institution and/ Failure to adequately invest in, upgrade Risk: Unmanageable inflation Risk: Extreme weather events Risk: Failure of climate-change Risk: Major biodiversity loss
housing, shares, etc. in a in a major economy or region. or malfunctioning of a financial system and secure infrastructure networks 4.2. 4.3. 4.4. 4.5.
(e.g. floods, storms, etc.) mitigation and adaptation and ecosystem collapse (land
my or region. impacts the global economy. (e.g. energy, transportation and Unmanageable increase in the general
price level of goods and services in or ocean) 4. Societal Risk: Food crises Risk: Large-scale involuntary Risk: Profound social instability Risk: Rapid and massive spread

Failure/shortfall of critical
communications) leads to pressure or a Major property, infrastructure and Governments and businesses fail to
breakdown with system-wide implications. key economies. environmental damage as well as human Irreversible consequences migration of infectious diseases
World Economic Forum Globalfor
Riskthe
Report Graphics Access to appropriate quantities and Major social movements or protests (e.g.
loss caused by extreme weather events. to mitigate climate change, protect

Rapid and massive spread

environment, resulting in severely quality of food and nutrition becomes Large-scale involuntary migration induced street riots, social unrest, etc.) disrupt Bacteria, viruses, parasites or fungi
IDEA IDEA IDEA populations and help businesses depleted resources for humankind as political or social stability, negatively
by conflict, disasters, environmental or cause uncontrolled spread of infectious
impacted by climate change to adapt. well as industries. a major scale. impacting populations and economic
ich could also be interpreted as an • Graph displaying a decrease, to signify deflation • Bank icon with broken pillars, to suggest collapse • Broken train track to suggest breakdown
economic reasons. diseases (for instance due to resistance to
The house represents the asset, of financial institution of transportation networks
activity. antibiotics, antivirals and other treatments)

infrastructure Major natural catastrophes

IDEA IDEA IDEA IDEA
signifies the inflated price leading to widespread fatalities and
• Price tag featuring multiple dollar symbols to • Tornado • Globe with thermometer, representing the
2. Environmental
• Upside-down fish with crosses for eyes,
3. GeoPolitical economic disruption.

of infectious diseases
represent high prices world climate representing environmental consequences
IDEA IDEA IDEA Economic Forum
World Global Risk Report Graphics IDEA
1.3. World
1.4. Economic Forum Global Risk Report Graphics
• Wilted crop, to represent food crises • Passport/passport control icon to represent • Police figures with shields, to indicate dispute, • Virus
on in a major Risk: Failure of a major financial Risk: Failure/shortfall of critical migration and the crossing of borders riots and social unrest

(e.g. earthquake, tsunami,

4.2. 4.3. 4.4. 4.5.
mechanism or institution infrastructure
ra-low inflation or deflation Collapse of a financial institution and/ Failure to adequately invest in, upgrade Risk: Food crises Risk: Large-scale involuntary Risk: Profound social instability Risk: Rapid and massive spread
migration 4. Societal diseases
of infectious 5. Technological
nomy or region. or malfunctioning of a financial system 1.
andEconomic
secure infrastructure networks
Access to appropriate quantities and Major social movements or protests (e.g.
impacts the global economy. (e.g. energy, transportation and
quality of food and nutrition becomes Large-scale involuntary migration induced street riots, social unrest, etc.) disrupt Bacteria, viruses, parasites or fungi
communications) leads to pressure or a

Fiscal crises in key volcanic eruption, geomagnetic storms)

by conflict, disasters, environmental or political or social stability, negatively cause uncontrolled spread of infectious
breakdown with system-wide implications.
a major scale. economic reasons. impacting populations and economic diseases (for instance due to resistance to
activity.

Water crises
2.4. 2.5. 3.1. 3.2. antibiotics, antivirals and other treatments)
IDEA IDEA
leading to widespread fatalities and
g a decrease, to signify deflation • Bank icon with broken pillars, to suggest collapse • Broken train track to suggest breakdown
Risk: Major natural catastrophes Risk: Man-made environmental Risk: Failure of national Risk: Interstate conflict with economic disruption.
of financial institution of transportation networks (e.g. earthquake, tsunami, catastrophes (e.g. oil spill, governance (e.g. failure of rule regional consequences

economies
volcanic eruption, geomagnetic radioactive contamination, etc.) of law, corruption, political IDEA IDEA IDEA
World Economic Forum Global Risk Report Graphics IDEA
World Economic Forum Global Risk Report Graphics A bilateral or multilateral dispute between
storms) deadlock, etc.) states escalates into economic (e.g. trade/
Failure to prevent major man-made • Wilted crop, to represent food crises • Passport/passport control icon to represent • Police figures with shields, to indicate dispute, • Virus
Major property, infrastructure and catastrophes, causing harm to lives, Inability to govern a nation of geopolitical currency wars, resource nationalization), migration and the crossing of borders riots and social unrest

environmental damage as well as human health, infrastructure, property, importance due to weak rule of law, military, cyber, societal or other conflict.
4.6. 5.1. 5.2. 5.3.
1.5. 1.6. 1.7. 1.8. human loss caused by geophysical economic activity and the environment. corruption or political deadlock.
disasters such as earthquakes, 4. Societal 5. Technological
Risk: Water crises Risk: Adverse consequences Risk: Breakdown of critical Risk: Large-scale cyberattacks

Man-made environmental
World Economic Forum Global Risk Report Graphics Risk: Fiscal crises in key Risk: High structural Risk: Illicit trade (e.g. illicit Risk: Severe energy price shock 2. Environmental volcanic activity, landslides, tsunamis 3. GeoPolitical
of technological advances information infrastructure
economies unemployment or financial flow, tax evasion, human (increase or decrease) or geomagnetic storms. A significant decline in the available Large-scale cyberattacks or malware

Adverse consequences
quality and quantity of fresh water and networks causing large economic damages,
underemployment Intended or unintended adverse
Excessive debt burdens generate Energy price increases or decreases IDEA IDEA IDEA IDEA
consequences of technological geopolitical tensions or widespread loss
Cyber dependency increases vulnerability
sovereign debt crises and/or A sustained high level of unemployment Large-scale activities outside the legal significantly and places further economic health and/or economic activity. advances such as artificial intelligence, to outage of critical information of trust in the Internet.
• Erupting volcano • Radioactivity symbol • Broken scale, to signify the failure of the • Crossed swords to represent conflict
liquidity crises. or underutilization of the productive framework such as illicit financial flow, tax pressures on highly energy-dependent geo-engineering and synthetic biology infrastructure (e.g. internet, satellites,

High structural
rule of law

catastrophes (e.g. oil spill,

1. Economic capacity of the employed population industries and consumers. causing human, environmental and etc.) and networks causing widespread
prevents the economy from attaining high and organized crime undermine social economic damage. disruption.

of technological advances
levels of employment. interactions, regional or international
collaboration and global growth. IDEA IDEA IDEA IDEA

IDEA IDEA IDEA IDEA • Water droplet • Android-style robot to represent technology, • Wi-fi symbol to represent the internet • Bug, to represent a cyber-bug

unemployment or radioactive contamination, etc.)

and artificial intelligence and networks
• Bag of money with hole, money falling out • Figures (people), with a downwards arrow • Prisoner icon, to represent illicit behaviour • Lightning bolt, to signify energy and shock 4.6. 5.1. 5.2. 5.3.
between them to signify underutilization 2.4. 2.5. 3.1. 3.2.
of people
World Economic Forum Global Risk Report Graphics Risk: Water crises Risk: Adverse consequences Risk: Breakdown of critical Risk: Large-scale cyberattacks
Risk: Major natural catastrophes Risk: Man-made environmental Risk: Failure of national Risk: Interstate conflict with
of technological advances information infrastructure
(e.g. earthquake, tsunami, catastrophes (e.g. oil spill, governance (e.g. failure of rule regional consequences A significant decline in the available Large-scale cyberattacks or malware
quality and quantity of fresh water and networks causing large economic damages,
volcanic eruption, geomagnetic radioactive contamination, etc.) of law, corruption, political Intended or unintended adverse

underemployment
A bilateral or multilateral dispute between geopolitical tensions or widespread loss
storms) deadlock, etc.) consequences of technological Cyber dependency increases vulnerability
Failure to prevent major man-made states escalates into economic (e.g. trade/ health and/or economic activity. of trust in the Internet.
1.5. 1.6. 1.7. 1.8. advances such as artificial intelligence, to outage of critical information

Breakdown of critical
catastrophes, causing harm to lives, currency wars, resource nationalization),
Major property, infrastructure and Inability to govern a nation of geopolitical
military, cyber, societal or other conflict.
4. Societal 5. Technological geo-engineering and synthetic biology infrastructure (e.g. internet, satellites,
Risk: Fiscal crises in key Risk: High structural Risk: Illicit trade (e.g. illicit Risk: Severe energy price shock environmental damage as well as human health, infrastructure, property, importance due to weak rule of law, causing human, environmental and
World Economic Forum Global Risk Report Graphics etc.) and networks causing widespread
human loss caused by geophysical economic activity and the environment. corruption or political deadlock. economic damage.
economies unemployment or financial flow, tax evasion, human (increase or decrease) disruption.
disasters such as earthquakes,
underemployment

Failure of national
Excessive debt burdens generate Energy price increases or decreases volcanic activity, landslides, tsunamis IDEA IDEA IDEA IDEA
Forum Global Risk Report Graphics sovereign debt crises and/or significantly and places further economic or geomagnetic storms.
A sustained high level of unemployment Large-scale activities outside the legal

information infrastructure
liquidity crises. or underutilization of the productive framework such as illicit financial flow, tax pressures on highly energy-dependent • Water droplet • Android-style robot to represent technology, • Wi-fi symbol to represent the internet • Bug, to represent a cyber-bug
industries and consumers. IDEA IDEA IDEA IDEA and artificial intelligence and networks
capacity of the employed population
prevents the economy from attaining high and organized crime undermine social
2. Environmental 3. GeoPolitical
• Erupting volcano • Radioactivity symbol • Broken scale, to signify the failure of the • Crossed swords to represent conflict
levels of employment. interactions, regional or international rule of law

Illicit trade (e.g. illicit financial flow, tax governance (e.g. failure of rule
collaboration and global growth.
ic

and networks
IDEA IDEA IDEA IDEA

• Bag of money with hole, money falling out • Figures (people), with a downwards arrow • Prisoner icon, to represent illicit behaviour • Lightning bolt, to signify energy and shock World Economic Forum Global Risk Report Graphics 4.6. 5.1. 5.2. 5.3.
between them to signify underutilization
of people Risk: Water crises Risk: Adverse consequences Risk: Breakdown of critical Risk: Large-scale cyberattacks

evasion, human trafficking, organized of law, corruption, political

of technological advances information infrastructure
A significant decline in the available Large-scale cyberattacks or malware
quality and quantity of fresh water and networks causing large economic damages,
Intended or unintended adverse
consequences of technological Cyber dependency increases vulnerability geopolitical tensions or widespread loss
4. Societal 5. Technological
health and/or economic activity. advances such as artificial intelligence, to outage of critical information of trust in the Internet.
2.4. 2.5. 3.1. 3.2.
geo-engineering and synthetic biology infrastructure (e.g. internet, satellites,
causing human, environmental and

crime, etc.) deadlock, etc.)

Risk: Major natural catastrophes Risk: Man-made environmental Risk: Failure of national Risk: Interstate conflict with etc.) and networks causing widespread
economic damage. disruption.
1.6. 1.7. 1.8. (e.g. earthquake, tsunami, catastrophes (e.g. oil spill, governance (e.g. failure of rule regional consequences

Large-scale cyberattacks
volcanic eruption, geomagnetic radioactive contamination, etc.) of law, corruption, political IDEA IDEA IDEA IDEA
rises in key Risk: High structural Risk: Illicit trade (e.g. illicit Risk: Severe energy price shock A bilateral or multilateral dispute between
storms) deadlock, etc.) states escalates into economic (e.g. trade/
unemployment or financial flow, tax evasion, human (increase or decrease) World Economic Forum Global Risk Report Graphics Failure to prevent major man-made • Water droplet • Android-style robot to represent technology, • Wi-fi symbol to represent the internet • Bug, to represent a cyber-bug
Major property, infrastructure and catastrophes, causing harm to lives, Inability to govern a nation of geopolitical currency wars, resource nationalization), World Economic Forum Global Risk Report Graphics
underemployment military, cyber, societal or other conflict.
and artificial intelligence and networks
t burdens generate Energy price increases or decreases environmental damage as well as human health, infrastructure, property, importance due to weak rule of law,
t crises and/or A sustained high level of unemployment Large-scale activities outside the legal significantly and places further economic human loss caused by geophysical economic activity and the environment. corruption or political deadlock.
. or underutilization of the productive framework such as illicit financial flow, tax pressures on highly energy-dependent disasters such as earthquakes,
capacity of the employed population industries and consumers. volcanic activity, landslides, tsunamis
prevents the economy from attaining high and organized crime undermine social 2. Environmental or geomagnetic storms. 3. GeoPolitical
levels of employment. interactions, regional or international
4.6. 5.1. 5.2.
5.
5.3.
Technological

Severe energy price shock Interstate conflict with

collaboration and global growth. IDEA IDEA IDEA IDEA
Risk: Water crises Risk: Adverse consequences Risk: Breakdown of critical Risk: Large-scale cyberattacks
• Erupting volcano • Radioactivity symbol • Broken scale, to signify the failure of the • Crossed swords to represent conflict of technological advances information infrastructure

Massive incident of data

IDEA IDEA IDEA
rule of law A significant decline in the available Large-scale cyberattacks or malware
quality and quantity of fresh water and networks causing large economic damages,
Intended or unintended adverse
ith hole, money falling out • Figures (people), with a downwards arrow • Prisoner icon, to represent illicit behaviour • Lightning bolt, to signify energy and shock
between them to signify underutilization consequences of technological Cyber dependency increases vulnerability geopolitical tensions or widespread loss
of people health and/or economic activity. advances such as artificial intelligence, to outage of critical information of trust in the Internet.

(increase or decrease) regional consequences

geo-engineering and synthetic biology infrastructure (e.g. internet, satellites,
World Economic Forum Global Risk Report Graphics
causing human, environmental and etc.) and networks causing widespread
World Economic Forum Global Risk Report Graphics
economic damage.

fraud/theft
disruption.

IDEA IDEA IDEA IDEA

2.4. 2.5. 3.1. 3.2.
1.7. 1.8. • Water droplet • Android-style robot to represent technology, • Wi-fi symbol to represent the internet • Bug, to represent a cyber-bug
1. Economic 2. Environmental Risk: Major natural catastrophes Risk: Man-made environmental Risk: Failure of national Risk: Interstate conflict with and artificial intelligence and networks
5.4.
ructural Risk: Illicit trade (e.g. illicit Risk: Severe energy price shock 3. GeoPolitical 4. Societal Risk: Massive incident of data
(e.g. earthquake, tsunami, catastrophes (e.g. oil spill, governance (e.g. failure of rule regional consequences
ment or financial flow, tax evasion, human (increase or decrease)
volcanic eruption, geomagnetic radioactive contamination, etc.) of law, corruption, political fraud/theft
oyment A bilateral or multilateral dispute between
Energy price increases or decreases storms) deadlock, etc.) states escalates into economic (e.g. trade/
Failure to prevent major man-made Wrongful exploitation of private or
gh level of unemployment Large-scale activities outside the legal significantly and places further economic
Major property, infrastructure and catastrophes, causing harm to lives, Inability to govern a nation of geopolitical currency wars, resource nationalization),
pressures on highly energy-dependent

Unmanageable inflation Large-scale terrorist attacks

ation of the productive framework such as illicit financial flow, tax military, cyber, societal or other conflict. unprecedented scale.
industries and consumers. environmental damage as well as human health, infrastructure, property, importance due to weak rule of law,
e employed population
human loss caused by geophysical economic activity and the environment. corruption or political deadlock.
conomy from attaining high and organized crime undermine social
oyment. interactions, regional or international disasters such as earthquakes, IDEA

collaboration and global growth. volcanic activity, landslides, tsunamis

or geomagnetic storms. • Cloud with a padlock in the middle, to represent
data and privacy/security
IDEA IDEA
IDEA IDEA IDEA IDEA
), with a downwards arrow • Prisoner icon, to represent illicit behaviour 1.9.
• Lightning bolt, to signify energy and shock 2.1. 2.2. 2.3.
• Erupting volcano • Radioactivity symbol •World Economic
Broken scale, toForum Global
signify the failureRisk Report Graphics
of the • Crossed swords to represent conflict
to signify underutilization 3.3. 3.4. 3.5. 4.1.
rule of law
Risk: Unmanageable inflation Risk: Extreme weather events Risk: Failure of climate-change Risk: Major biodiversity loss
(e.g. floods, storms, etc.) mitigation and adaptation and ecosystem collapse (land Risk: Large-scale terrorist attacks Risk: State collapse or crisis (e.g. Risk: Weapons of mass Risk: Failure of urban planning
Unmanageable increase in the general
price level of goods and services in or ocean) civil conflict, military coup, failed destruction
Major property, infrastructure and Governments and businesses fail to Individuals or non-state groups with Poorly planned cities, urban sprawl and

State collapse or crisis (e.g.

key economies. environmental damage as well as human political or religious goals successfully states, etc.) associated infrastructure create social,
Irreversible consequences for the Nuclear, chemical, biological and
loss caused by extreme weather events. to mitigate climate change, protect environment, resulting in severely 3. GeoPolitical inflict large-scale human or material State collapse of geopolitical importance
4. Societal
radiological technologies and materials environmental and health challenges.
populations and help businesses depleted resources for humankind as damage. due to internal violence, regional or global are deployed creating international crises
impacted by climate change to adapt. well as industries. instability, military coup, civil conflict, failed and potential for significant destruction.
states, etc.
IDEA IDEA IDEA IDEA

civil conflict, military coup, failed states,

IDEA IDEA IDEA IDEA
• Price tag featuring multiple dollar symbols to • Tornado • Globe with thermometer, representing the • Upside-down fish with crosses for eyes,
represent high prices world climate representing environmental consequences • Building in target sight • Burning flag • Mushroom cloud, to represent nuclear/chemical • Collection of urban buildings to represent an
weapons urban area

World Economic Forum Global Risk Report Graphics

3.3.

Risk: Large-scale terrorist attacks

Individuals or non-state groups with
political or religious goals successfully
3.4.

Risk: State collapse or crisis (e.g.

civil conflict, military coup, failed
states, etc.)
etc.)
3.5.

Risk: Weapons of mass

destruction
4.1.

Risk: Failure of urban planning

Poorly planned cities, urban sprawl and
associated infrastructure create social,
Nuclear, chemical, biological and
inflict large-scale human or material State collapse of geopolitical importance radiological technologies and materials environmental and health challenges.
damage. due to internal violence, regional or global are deployed creating international crises
instability, military coup, civil conflict, failed and potential for significant destruction.
3. GeoPolitical 4. Societal
states, etc.

Weapons of mass
IDEA IDEA IDEA IDEA

• Building in target sight • Burning flag • Mushroom cloud, to represent nuclear/chemical • Collection of urban buildings to represent an
weapons urban area

3.3. 3.4. 3.5.

destruction
4.1.

Risk: Large-scale terrorist attacks Risk: State collapse or crisis (e.g. Risk: Weapons of mass Risk: Failure of urban planning
civil conflict, military coup, failed destruction
Individuals or non-state groups with Poorly planned cities, urban sprawl and
political or religious goals successfully states, etc.) associated infrastructure create social,
Nuclear, chemical, biological and
inflict large-scale human or material State collapse of geopolitical importance radiological technologies and materials environmental and health challenges.
damage. due to internal violence, regional or global are deployed creating international crises
instability, military coup, civil conflict, failed and potential for significant destruction.
states, etc.

IDEA IDEA IDEA IDEA

• Building in target sight • Burning flag • Mushroom cloud, to represent nuclear/chemical • Collection of urban buildings to represent an
weapons urban area

Table B: Trends 2015

Ageing population Rise of chronic diseases

Changing landscape of international governance Rise of cyber dependency
Climate change Rising geographic mobility
Environmental degradation Rising income and wealth disparity
Growing middle class in emerging economies Shifts in power
Increasing national sentiment Urbanization
Increasing polarization of societies

Figure 3: The Most Likely Global Risks 2016: A Regional Perspective

The Most Likely Global Risks to Occur in Your Region 3rd
Technological

Failure of
1 st Ranking position
in each region
national
governance
2nd
Central Asia
Unemployment or Europe including Russia
underemployment
Fiscal crisis

Data fraud
Failure of national
or theft Interstate governance
conflict
Large-scale
involuntary Energy
migration price
shock
Cyber attacks
Profound
Extreme
social
North America weather
instability
events Extreme
weather
Unemployment events Failure of national
or under- governance
Water crises employment Natural
Middle East catastrophes
and North Africa Failure of
national
governance East Asia
and the Pacific

Failure of Water crises

national
governance Failure of
national
governance
Unemployment or South Asia
Profound
social underemployment Risk category
instability Sub-Saharan
Extreme
Latin America Africa Unemployment or weather Economic
underemployment events
and the Caribbean Unemployment or
Environmental
underemployment

Failure of critical Geopolitical

infrastructure
Societal

Technological

Source: Global Risks Perception Survey 2015.

Note: Respondents were asked to select the three global risks that they believe are the most likely to occur in their region. For legibility reasons, the names of the global risks
are abbreviated; see Appendix A for the full name and description. Oceania is not displayed because of the low number of respondents.
Figure 4: The Risks-Trends Interconnections Map 2016

Source: Global Risks Perception Survey 2015.

Note: Survey respondents were asked to select the three trends that are the most important in shaping global development in the next 10 years. For each of the three trends
identified, respondents were asked to select the risks that are most strongly driven by those trends. See Appendix B for more details. To ensure legibility, the names of the
global risks are abbreviated; see Appendix A for the full name and description.
The Global Risks
Report 2016
11th Edition

Strategic Partners
Marsh & McLennan Companies
Zurich Insurance Group

Academic Advisers
National University of Singapore
Oxford Martin School, University of Oxford
Wharton Risk Management and Decision Processes Center, University of Pennsylvania
Contents
4 Preface
By Klaus Schwab
6 Executive Summary
8 Introduction
10 Part 1: Global Risks 2016
11 Box 1.1: Methodology of The Global Risks Report
14 Box 1.2: The Paris Agreement: A Historic Turning
Point on Climate Change
16 Box 1.3: Refugees in Malaysia
17 Box 1.4: China’s Financial Vulnerabilities and the
Transition to the New Normal
19 Box 1.5: Pathways to Resilience: Effective
Leadership and Institutional Values
24 Part 2: The Security Outlook 2030
24 Box 2.1: International Security Defined
25 Box 2.2: A Deep-Dive into International Security
27 Box 2.3: Public-Private Collaboration in Complex
Crises
29 Box 2.4: The Seven Driving Forces of International
Security
30 Box 2.5: Scenarios Methodology
38 Part 3: Risks in Focus
39 3.1 (Dis)Empowered Citizen
40 Box 3.1.1: The (Dis)Empowered Citizen:
A Definition
42 Box 3.1.2: Digital Government Technologies:
The (Persisting) Challenges of Inclusiveness and
Engagement
50 3.2 Climate Change and Risks to Food Security
52 Box 3.2.1: Adaptation and Its Limits
53 Box 3.2.2: Reducing Food Waste
59 3.3 Global Disease Outbreaks
61 Box 3.3.1: Health Communication
62 Box 3.3.2: Developing an Ebola Vaccine:
Reflections on the Current Regulatory
Environment
63 Box 3.3.3: The Pandemic Emergency Financing
Facility (PEF)
68 Part 4: Risks for Doing Business at a Glance
69 Box 4.1: The World Economic Forum’s Executive
Opinion Survey
82 Conclusions
84 Appendices
85 Appendix A: Description of Global Risks and Trends
2016
88 Appendix B: Global Risks Perception Survey and
Methodology 2015
90 Appendix C: The Executive and Opinion Survey 2015:
Views of the Business Community on the Global Risks
of Highest Concern for Doing Business
92 Acknowledgements
Preface The motivations underlying The Global
Risks Report at its inception in 2006
– to shed light on global risks and
developments and help create a
shared understanding of the most
pressing issues confronting the world,
the ways they interconnect and their
potential negative impacts – are
therefore more relevant than ever. A
shared understanding of challenges is
needed as a base for multistakeholder
collaboration, which has seen
increasing recognition as the most
effective way to address global risks
and build resilience against them. To
further inspire action, this year’s
Report, like last year’s, also contributes
This 11th edition of The Global Risks to a shared understanding of the
Report is published at a time of solution space, presenting examples of
profound change. Global risks risk mitigation and resilience practices
materialize in new and unexpected in the Risks in Focus section. In
ways and are becoming more addition this year’s Global Risk Report
imminent as their consequences reach includes a chapter dedicated to better
people, institutions and economies. understanding the evolving
We witness the effects of climate international security landscape and
change in the rising frequency and improving outcomes.
intensity of water shortages, floods and
storms worldwide. Stable societies are As in previous years, the Report is
becoming increasingly fragmented in based on the annual Global Risks
many regions of the world, and we Perception Survey, completed by
note a weak global economy that is almost 750 members of the World
again facing headwinds. Economic Forum’s global
multistakeholder community. In
At the same time, advances in addition to the special section
technology and rapid digitization are exploring the evolving security
fundamentally transforming societies, landscape in an era of uncertainty, the
economies and ways of doing Report presents deep-dive
business. Often referred to as the discussions of risks to the stability of
Fourth Industrial Revolution, this societies posed by the (dis)empowered
development presents great citizen, who is empowered by
opportunities for all actors involved and technology but feels disempowered by
a previously unimagined solution traditional decision-making processes.
space for some of the world’s most It also discusses the societal
pressing problems. Yet it also presents consequences of climate change with
elusive risks related to changing a focus on food and water crises and
employment patterns, widening the threat of global pandemics.
income inequality and rising cyber
dependence. Managing the paradigm As one of the Forum’s flagship reports,
shift and transition process will be The Global Risks Report has been a
critical to securing stable economies collaborative effort since its first edition
and ultimately thriving societies. in 2006. Produced by the Forum, it is
Achieving this calls for greater able to draw on the unique expertise
resilience as the key imperative for available within the Forum’s different
action. Collaboration across countries, communities and knowledge networks
areas of expertise and stakeholder as well as within the organization as a
groups is necessary to effectively whole. It also builds firmly on the
address global risks and deliver on the Forum’s ongoing research, projects,
resilience imperative. Yet across every debates and initiatives. The insights
sector of society, decision-makers are presented here are the result of
struggling to find common ground as numerous discussions, consultations
they are faced with heightened and workshops and reflect the views of
volatility, uncertainty, leaders from our various communities
interconnectedness and pace of through the Global Risks Perception
change. Survey.

4 The Global Risks Report 2016

With this in mind, I would like to thank Forum for their invaluable contributions
our Strategic Partners, Marsh & to the Report.
McLennan Companies and the Zurich
Insurance Group, represented on the I would also like to thank Richard
Steering Board by John Drzik, Samans, Managing Director; Jennifer
President, Global Risk and Specialties, Blanke, Chief Economist; and
Marsh & McLennan; and Cecilia Reyes, Margareta Drzeniek Hanouz, Head of
Group Chief Risk Officer, Zurich Global Competitiveness and Risks for
Insurance Group. Furthermore, I am their leadership on this effort as well as
grateful to our academic advisers the The Global Risks Report 2016 project
National University of Singapore, the team members Ciara Browne, Attilio Di
Oxford Martin School at the University Battista, Caroline Galvan, Gaëlle Marti,
of Oxford and the Wharton Risk and Stephanie Vérin for their
Management and Decision Processes contributions.
Center at the University of
Pennsylvania. Last but not least, this Report would
not have been possible without the
The Report has also greatly benefited time and commitment of the
from the dedication and valuable respondents who completed the
guidance of the members of the Global Global Risks Perception Survey and
Risks 2016 Advisory Board. Members the participants in the Changing
are Rolf Alter, Organisation for International Security Landscapes
Economic Co-operation and project.
Development (OECD); Mario Blejer,
Banco Hipotecario SA; Winnie
Byanyima, Oxfam International;
Marie-Valentine Florin, International
Risk Governance Council (IRGC);
Steven Kou, National University of
Singapore; Julian Laird, Oxford Martin
School; Pascal Lamy, Notre Europe -
Jacques Delors Institute; Ursula von
der Leyen, Federal Minister of Defence
of Germany; Maleeha Lodhi
Ambassador and Permanent
Representative of Pakistan to the
United Nations; Erwann Michel-Kerjan,
The Wharton School, University of
Pennsylvania; Nicolas Mueller, Federal
Chancellery of Switzerland; Moisés
Naím, Carnegie Endowment for
International Peace; Jonathan Ostry,
International Monetary Fund; Manuel
Pulgar-Vidal Otalora, Minister of
Environment of Peru; Nouriel Roubini,
New York University; Anders
Sandberg, University of Oxford;
Richard Smith-Bingham, Marsh &
McLennan Companies; Michelle
Tuveson, Centre for Risk Studies,
University of Cambridge; Steve Wilson,
Zurich Insurance Group; and Sandra
Wu Wen-Hsiu, Japan Asia Group
Limited.

I am grateful to Espen Barth Eide,

Managing Director and Anja
Kaspersen, Head of International
Security as well as Isabel de Sola,
Andrej Kirn and Alex Williams for their
contributions on international security,
and to the International Security
Klaus Schwab
community and ecosystem of the Founder and Executive Chairman
World Economic Forum

The Global Risks Report 2016 5

Executive
Now in its 11th edition, The Global Risks The Report also steps back and
Report 2016 draws attention to ways explores how emerging global risks
that global risks could evolve and and major trends (see Box 1), such as

Summary interact in the next decade. The year

2016 marks a forceful departure from
past findings, as the risks about which
climate change, the rise of cyber
dependence and income and wealth
disparity are impacting already-strained
the Report has been warning over the societies by highlighting three clusters
past decade are starting to manifest of risks as Risks in Focus. As resilience
themselves in new, sometimes building is helped by the ability to
unexpected ways and harm people, analyse global risks from the
institutions and economies. Warming perspective of specific stakeholders,
climate is likely to raise this year’s the Report also analyses the
temperature to 1° Celsius above the significance of global risks to the
pre-industrial era, 60 million people, business community at a regional and
equivalent to the world’s 24th largest country-level.
country and largest number in recent
history, are forcibly displaced, and The Global Risks
crimes in cyberspace cost the global
economy an estimated US$445 billion,1 Perception Survey
higher than many economies’ national
incomes. In this context, the Report Almost 750 experts and decision-
calls for action to build resilience – the makers in the World Economic Forum’s
“resilience imperative” – and identifies multistakeholder communities
practical examples of how it could be responded to this year’s Global Risks
done. Perception Survey. Respondents are
drawn from business, academia, civil
society and the public sector and span
different areas of expertise,
Box 1: Definition of Global geographies and age groups.
Risks and Trends
The survey asked respondents to
A global risk is an uncertain event consider 29 global risks – categorized
as societal, technological, economic,
or condition that, if it occurs, can
environmental or geopolitical – over a
cause significant negative impact 10-year time horizon, and rate each
for several countries or industries according to their perceived likelihood
within the next 10 years. of it occurring and impact if it does.
A global trend is a long-term
pattern that is currently taking place After its presence in the top five most
and that could contribute to impactful risks for the past three years,
amplifying global risks and/or the failure of climate change
mitigation and adaptation has risen
altering the relationship between
to the top and is perceived in 2016 as
them. the most impactful risk for the years to
come, ahead of weapons of mass
destruction, ranking 2nd, and water
Geopolitical concerns remain crises, ranking 3rd. Large-scale
prominent in the minds of respondents involuntary migration was also rated
to the Global Risks Perception Survey among the top five for impact, as was
for the second year in a row. The severe energy price shock (increase
Report therefore delves into the or decrease).
international security landscape and
explores what drives this evolution and, The risk rated most likely was large-
in particular, how it could be affected scale involuntary migration, with last
by the Fourth Industrial Revolution and year’s top scorer – interstate conflict
climate change. The three scenarios with regional consequences – giving
for possible futures developed in this way to the environmental risks of
context inform new ways of building extreme weather events and the
resilience to security threats through failure of climate change mitigation
public-private collaboration. and adaptation and followed by major
natural catastrophes.

6 Global Risks 2015

Global risks that remain serious looking for ways to engage with Risks to Doing Business
because of their combined impact and concerned citizens.
likelihood involve some economic risks, Private sector respondents to the World
including fiscal crises in key Food security risk in the context of Economic Forum’s Executive Opinion
economies and high structural climate change is the second Risk in Survey were asked to identify their risks
unemployment and Focus. Building upon the climate-water of highest concern for doing business in
underemployment. These are nexus discussed in Part 1, the chapter the next 10 years. The responses, from
complemented by cyberattacks and looks at how changing climate and 140 economies, reveal patterns of
profound social instability. Their weather patterns could jeopardize food concern at country and regional levels
assessment reflects the potentially security and agricultural production that can usefully inform initiatives to
profound impact of the Fourth Industrial across geographies. The most climate- engage the private sector in building
Revolution on the economy and society vulnerable countries often heavily resilience to global risks.
and emphasizes the need for depend on agricultural productivity to
safeguarding future benefits. sustain economic growth and On a global scale, two economic risks
development. But the recent years – unemployment and
Respondents were also asked which have also shown the climate underemployment and energy price
risks were related and could give rise to vulnerability of G-20 countries such as shocks – are mentioned as the top risks
cascading risks. Three emerged India, Russia and the United States of highest concern for doing business in
strongly: the potential for climate – the breadbasket of the world – and half of the 140 economies. These are
change to exacerbate water crises, other large industrial producers of followed by the failure of national
with impacts including conflicts and agricultural commodities. The chapter governance, fiscal crises, asset bubbles
more forced migration, calling for discusses how climate change–resilient and cyberattacks.
improved water governance to adapt to crops and supply chain networks, as
climate change and accommodate a well as financing and insurance Economic risks predominate in
growing population and economic schemes, can help mitigate the social, responses from Europe, including fiscal
development; the need to address the economic and environmental aspects crises, unemployment, asset bubbles
global refugee crisis, adding
of food security risks related to climate and energy prices – the latter also being
emphasis to policies that can build
change. the top concern in Canada – while
resilience in addition to responding to
executives in the United States are most
the immediate crisis; and the risks of
Drawing lessons from the Ebola crisis, concerned about cyber-related risks and
failing to fully understand the risks
the third Risk in Focus discusses attacks. Respondents from Central Asia
around the Fourth Industrial Revolution
global disease outbreaks. It warns and Russia worry about fiscal crises and
and how this transition will impact
that population growth, rapid unemployment, along with the risks of
countries, economies and people at a
urbanization and increasing unmanageable inflation and interstate
time of persistently sluggish growth.
transnational flows of commodities, conflict. Environmental risks worry
people and animals intensify the risk of business leaders in East Asia and the
Risks in Focus infectious transmission across Pacific, alongside energy prices, asset
geographies while equally diminishing bubbles, and cyber attacks.
Key to building resilience is the stability the ability to respond – all at a time of
of societies. The first Risk in Focus growing resistance of microorganisms In South Asia concerns also include
therefore looks at the complex to today’s most effective medicines. energy prices, together with fiscal crises,
dynamics of societies in the age of Preparedness and response measures unemployment and failure of national
digitization and discusses the range from the behavioural, such as governance – which is the top concern in
phenomenon of the (dis)empowered fact-based communication and Latin America and the Caribbean
citizen, which is a result of the interplay education campaigns, to the need to – followed by energy prices shock and
of varying dynamics: as technology invest in diagnostic, drug and vaccine unemployment. Executives in the Middle
empowers citizens to find information, R&D and in its enabling environment, East and North Africa likewise worry
connect with others and organize, especially advancing a regulatory about energy prices, together with
those citizens feel disenfranchised by framework. It raises the imperative for unemployment, terrorist attacks and
distant elites. It explores the risk of public-private sector collaboration interstate conflict. In Sub-Saharan
social instability if both governments across areas such as data availability Africa, the business community’s top
and business embark on either and analysis, a joint research agenda, concerns include unemployment, energy
repressive actions or non-action out of regulatory frameworks, long-term prices, the failure of national governance
uncertainty about how to deal with a financing and ways to promote and the failure of critical infrastructure.
more informed, connected and responsible media engagement as part
demanding citizenry, which could lead of effective crisis management
to an escalating downward spiral of communication.
broken trust and harsher response on
either side. The chapter also, however, For each Risk in Focus, examples are
explores the benefits governments and given of three practical mechanisms
business stand to gain by proactively that can build resilience against the
identified threats.

The Global Risks Report 2016 7

Introduction
Over the past decade, The Global
Risks Report has expanded its scope
from analysing the interconnected
and rapidly evolving nature of global
risks to also putting forward actionable
solutions and calling for public-
private collaboration in strengthening
resilience. Now in its 11th edition, the
Report describes a world in which
risks are becoming more imminent and
have wide-ranging impact: tensions
between countries affect businesses;
unresolved, protracted crises have
resulted in the largest number of
refugees globally since World War II;
terrorist attacks take an increasing toll
on human lives and stifle economies;
droughts occur in California and floods
in South Asia; and rapid advances in
technologies are coupled with ever-
growing cyber fragilities and persistent
unemployment and underemployment.

Implications of sweeping digitization

(also termed the “Fourth Industrial
Revolution”), ranging from
transformations that are the result of
rising cyber connectivity to the potential
effects of innovations on socio-
economic equality and global security,
remain far from fully understood. At
the same time, climate change is
unequivocally happening, and there is
no turning back time.

The increasing volatility, complexity

and ambiguity of the world not only
heightens uncertainty around the
“which”, “when”, “where” and “who”
of addressing global risks, but also
clouds the solutions space. We need
clear thinking about new levers that will
enable a wide range of stakeholders
to jointly address global risks, which
cannot be dealt with in a centralized
way.

Taken together, this calls for a resilience

imperative – an urgent necessity to find
new avenues and more opportunities
to mitigate, adapt to and build resilience
against global risks and threats
through collaboration among different
stakeholders.

By putting the resilience imperative at

its core, this year’s Global Risks Report
combines four parts to present an
analysis of different aspects of global
risks – across both global risks and
stakeholders – focused as much on the
search for solutions as on the analysis
of the risks themselves.

8 The Global Risks Report 2016

 World Economic
World
Forum
Economic
Global
Forum
Risk Report
Global
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Risk Report Graphics

1. Economic
3. GeoPolitical 4. Societal

Part 1 analyses the difference in risk World Economic Forum Global Risk Report Graphics World Economic Forum Global Risk Report Graphics

perceptions over different time horizons Asset bubble in a major Failure of urban planning
economy
and the perceived interconnections 1. Economic 4. Societal

among risks, as visualized in the

1.1 3.3. 1.2 3.4. 1.3. 3.5. 1.4. 4.1.

Risk: AssetRisk:
bubbleLarge-scale
in a major terrorist attacks
Risk: Deflation
Risk: in
State
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Risk: Failure
Risk:
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Risk: Failureofofcritical
urban planning
World Economic Forum Global Risk Report Graphics World Economic Forum Global Risk Report Graphics
economy economy civil conflict, military coup, failed mechanism destruction
or institution infrastructure

Global Risks Landscape 2016, all Deflation in a major

Individuals or non-state groups with Poorly planned cities, urban sprawl and

Food crises
political or religious goals successfully states, etc.) associated infrastructure create social,
Unsustainably overpriced assets such as Prolonged ultra-low inflation or deflation Collapse of aNuclear,
financialchemical,
institution
biological
and/ and Failure to adequately invest in, upgrade
inflict
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radiological
of a financial
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economy
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based on the Global Risks Perception

major economy or region. due to internal violence, regional orimpacts
global theareglobal
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IDEA
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IDEA

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Risk: Failure of a major financial
IDEA
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• Bank icon with

Risk:
IDEA

• Mushroom
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Failure/shortfall cloud,
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criticalcollapse
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IDEA

• Broken train track

IDEA
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4.3.

Risk: Large-scale involuntary

4.4.

Risk: Profound social instability

4.5.

Risk: Rapid and massive spread

of different stakeholders. Three risk

upwards arrow. The house represents the asset, of financial institution
weapons of transportation
urban
networks
area
World Economic Forum Global Risk Report Graphics World Economic Forum Global Risk Report Graphics
economy economy mechanism or institution infrastructure migration of infectious diseases
Failure of a major financial Large-scale involuntary
whilst the arrow signifies the inflated price
Access to appropriate quantities and Major social movements or protests (e.g.
Unsustainably overpriced assets such as Prolonged ultra-low inflation or deflation Collapse of a financial institution and/ Failure to adequately invest in, upgrade quality of food and nutrition becomes Large-scale involuntary migration induced street riots, social unrest, etc.) disrupt Bacteria, viruses, parasites or fungi
political or social stability, negatively
mechanism or institution migration
commodities, housing, shares, etc. in a in a major economy or region. or malfunctioning of a financial system and secure infrastructure networks by conflict, disasters, environmental or cause uncontrolled spread of infectious

interconnection clusters stand out: major economy or region. impacts the global economy. (e.g. energy, transportation and a major scale. economic reasons. impacting populations and economic diseases (for instance due to resistance t
communications) leads to pressure or a activity. antibiotics, antivirals and other treatme
1. Economic 4. Societal breakdown with system-wide implications. leading to widespread fatalities and

climate change in relation to water and

economic disruption.
IDEA IDEA IDEA IDEA 4.2. 4.3. 4.4. 4.5.
1.1 1.2 1.3. 1.4.
IDEA IDEA IDEA IDEA
• House icons, which could also be interpreted as an • Graph displaying a decrease, to signify deflation • Bank icon with broken pillars, to suggest collapse • Broken train track to suggest breakdown
Risk: Food crises Risk: Large-scale involuntary Risk: Profound social instability Risk: Rapid and massive spread

food crises; the growing challenges

Risk: Asset bubble in a major Risk: Deflation
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of the rising number of displaced infrastructure

commodities, housing, shares, etc. in a in a major economy or region. or malfunctioning of a financial system and secure infrastructure networks by conflict, disasters, environmental or political or social stability, negatively cause uncontrolled spread of infectious
major economy or region. impacts the global economy. (e.g. energy, transportation and a major scale. economic reasons. impacting populations and economic diseases (for instance due to resistance to
communications) leads to pressure or a activity. antibiotics, antivirals and other treatments)
1. Economic
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people worldwide; and what the Fourth

breakdown with system-wide implications.
economic disruption.
1.1 IDEA
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1.4. IDEA 4.2. 4.3. 4.4. 4.5.
IDEA IDEA IDEA IDEA

Industrial Revolution means in an era of

• House icons, which could also be interpreted as an • Graph displaying a decrease, to signify deflation • Bank icon with broken pillars, to suggest collapse • Broken train track to suggest breakdown
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Risk: Failure of a major financial Risk: Failure/shortfall of critical
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• Wilted crop, to represent food crises
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Unsustainably overpriced assets such as Prolonged ultra-low inflation or deflation Collapse of a financial institution and/ Failure to adequately invest in, upgrade quality of food and nutrition becomes Large-scale involuntary migration induced street riots, social unrest, etc.) disrupt Bacteria, viruses, parasites or fungi
commodities, housing, shares, etc. in a
major economy or region.
in a major economy or region. or malfunctioning of a financial system
impacts the global economy.
and secure infrastructure networks
(e.g. energy, transportation and
communications) leads to pressure or a
economies a major scale.
by conflict, disasters, environmental or
economic reasons.
political or social stability, negatively
impacting populations and economic
activity.
of infectious diseases
cause uncontrolled spread of infectious
diseases (for instance due to resistance to
antibiotics, antivirals and other treatments)
1. Economic breakdown with system-wide implications. 4. Societal 5. Technological
leading to widespread fatalities and
economic disruption.
IDEA IDEA IDEA IDEA
1.5. 4.2. 1.6. 4.3. 1.7. 4.4. 1.8. 4.5.

Part 2 discusses the implications

IDEA IDEA IDEA IDEA
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represent
protests (e.g.
• Police figures with shields, to indicate dispute,
(increase or
ofdecrease)
infectious diseases
riots and social unrest
• Virus

of a changing international security

underemployment
unemployment or Water crises
Excessive debtquality of food
burdens and nutrition becomes
generate Large-scale involuntary migration induced street riots, social unrest, etc.) disrupt Energy priceBacteria,
increasesviruses,
or decreases
parasites or fungi
sovereign debt crises and/or A sustained by conflict,
high level ofdisasters, environmentalLarge-scale
unemployment or political
activitiesoroutside
social stability,
the legalnegatively significantlycause
and places
uncontrolled
further economic
spread of infectious
a major scale.
liquidity crises. economic reasons. impacting
as illicitpopulations andtaxeconomicpressures ondiseases
highly energy-dependent
(for instance due to resistance to
underemployment
or underutilization of the productive framework such financial flow,

landscape and identifies the drivers

capacity of the employed population activity. industries and
antibiotics,
consumers. antivirals and other treatments)
1. Economic prevents the economy from attaining high 4. Societal
and organized crime undermine social 5. Technological
leading to widespread fatalities and
levels of employment. interactions, regional or international economic disruption.
collaboration and global growth.

that are at work and the implications for

1.5. 1.6. 1.7. 1.8. 4.6. 5.1. 5.2. 5.3.
IDEA IDEA IDEA IDEA
Risk: Fiscal crises in key Risk: High structural
IDEA
Illicit
IDEA
trade tax evasion,(e.g.
Risk: Illicit trade (e.g. illicit
illicit
(increase or financial
Risk: Severe energy price shock
IDEA IDEA Risk: Water crises Risk: Adverse consequences Risk: Breakdown of critical Risk: Large-scale cyberattacks

Adverse consequences
World Economic Forum Global Risk Report Graphics • Wilted crop, to represent food crises • Passport/passport
World Economic ForumcontrolGlobal
icon to represent
Risk Report Graphics • Police figures with shields, to indicate dispute, • Virus
economies unemployment or financial flow, human decrease) of technological advances information infrastructure

addressing global risks. Inspired by

• Bag of money with hole, money falling out migration
• Figures (people), and the crossing
with a downwards arrowof borders riots
• Prisoner icon, to and social
represent unrest
illicit behaviour A to
• Lightning bolt, significant decline
signify energy in the available
and shock Large-scale cyberattacks or malware
Excessive debt burdens generate
underemployment
flow, tax evasion, human
between them to signify underutilization
Energy price increases or decreases quality and quantity of fresh water Intended or unintended adverse
and networks causing large economic damages,

of technological advances
of people
sovereign debt crises and/or A sustained high level of unemployment Large-scale activities outside the legal significantly and places further economic consequences of technological Cyber dependency increases vulnerability geopolitical tensions or widespread loss

trafficking, organized crime,

liquidity crises. pressures on highly energy-dependent health and/or economic activity. advances such as artificial intelligence, of trust in the Internet.

the results of The Global Risks Report

or underutilization of the productive framework such as illicit financial flow, tax to outage of critical information
capacity of the employed population industries and consumers. geo-engineering and synthetic biology infrastructure (e.g. internet, satellites,
1. Economic 4. Societal 5. Technological causing human, environmental and
etc.)
prevents the economy from attaining high and organized crime undermine social etc.) and networks causing widespread
levels of employment. interactions, regional or international economic damage. disruption.

2015 and the continued instability of 1.5. 1.6. 1.7.

collaboration and global growth.
1.8. 4.6. 5.1. 5.2. 5.3.
IDEA IDEA IDEA IDEA
Risk: Fiscal crises in key Risk: Risk: Water crises Risk: Adverse consequences
Breakdown
information infrastructure of critical
Risk: Breakdown of critical Risk: Large-scale cyberattacks
IDEA High structural Risk:
IDEA Illicit trade (e.g. illicit Risk:
IDEA Severe energy price shock IDEA
• Water droplet • Android-style robot to represent technology, • Wi-fi symbol to represent the internet • Bug, to represent a cyber-bug

the global security situation, it lays Severe energy price shock

World EconomicWorld
Forum
Economic
Global
Forum
Risk Report
Global
Graphics
Risk Report Graphics
economies unemployment ormoney falling out financial flow,with
taxa downwards
evasion, arrow
human (increase ortodecrease) of technological advances and artificial intelligence and networkscyberattacks or malware
• Bag of money with hole, • Figures (people), • Prisoner icon, represent illicit behaviour A significant
• Lightning bolt, decline
to signify energy in the available
and shock Large-scale
and networks
information infrastructure
underemployment between them to signify underutilization quality and quantity of fresh water Intended or unintended adverse causing large economic damages,
Excessive debt burdens generate of people Energy price increases or decreases

(increase or decrease)
sovereign debt crises and/or significantly and places further economic consequences of technological Cyber dependency increases vulnerability geopolitical tensions or widespread loss
A sustained high level of unemployment Large-scale activities outside the legal

out alternative and plausible futures

health and/or economic activity. of trust in the Internet.
and networks
liquidity crises. or underutilization of the productive framework such as illicit financial flow, tax pressures on highly energy-dependent advances such as artificial intelligence, to outage of critical information
capacity of the employed population industries and consumers. geo-engineering and synthetic biology infrastructure (e.g. internet, satellites,
prevents the economy from attaining high 1.
andEconomic4. crime
organized Societal
undermine social 2. Environmental
5. Technological causing human, environmental and etc.) and networks causing widespread

that could materialize unless there

levels of employment. interactions, regional or international economic damage. disruption.
1.5. 1.6. 1.7. collaboration
1.8. and global growth. 4.6. 5.1. 5.2. 5.3.
IDEA IDEA IDEA IDEA
Risk: Fiscal crises in key Risk: High structural Risk: Illicit trade (e.g. illicit Risk: Severe energy price shock Risk: Water crises Risk: Adverse consequences Risk: Breakdown of critical Risk: Large-scale cyberattacks

is a change in how we respond and

IDEA IDEA IDEA IDEA
World Economic Forum Global Risk Report Graphics • Water droplet • World
Android-style
Economic robot to represent
Forum Global technology,
Risk Report Graphics • Wi-fi symbol to represent the internet • Bug, to represent a cyber-bug
economies unemployment or financial flow, tax evasion, human (increase or decrease) of technological advances information infrastructure
and artificial intelligence and networks
• Bag of money with hole, money falling out • Figures (people), with a downwards arrow • Prisoner icon, to represent illicit behaviour A significant
• Lightning bolt, decline
to signify energy in the available
and shock Large-scale cyberattacks or malware
Excessive debt burdens generate
underemployment between them to signify underutilization
of people
Energy price increases or decreases
Unmanageable inflation
quality and quantity of fresh water Intended or unintended adverse
and networks
Large-scale cyberattacks
causing large economic damages,

manage the forces at play.

sovereign debt crises and/or A sustained high level of unemployment Large-scale activities outside the legal significantly and places further economic consequences of technological Cyber dependency increases vulnerability geopolitical tensions or widespread loss
liquidity crises. or underutilization of the productive framework such as illicit financial flow, tax pressures on highly energy-dependent health and/or economic activity. advances such as artificial intelligence, to outage of critical information of trust in the Internet.
capacity of the employed population industries and consumers. geo-engineering and synthetic biology infrastructure (e.g. internet, satellites,
prevents the economy from attaining high 1. Economic
and organized crime undermine social 2. Environmental causing human, environmental and 5. Technological
etc.) and networks causing widespread
levels of employment. interactions, regional or international economic damage. disruption.
collaboration and global growth. 1.9. 4.6. 2.1. 5.1. 2.2. 5.2. 2.3. 5.3.
IDEA IDEA IDEA IDEA

Part 3 explores three risks clusters

IDEA IDEA IDEA Risk:
IDEA Unmanageable
Risk: Waterinflation
crises Risk: Extreme
Risk:weather
Adverseevents
consequences Risk: Failure
Risk:
of climate-change
Breakdown of critical Risk: MajorRisk:
biodiversity
Large-scale losscyberattacks
World Economic Forum Global Risk Report Graphics • Water droplet • Android-style robot to represent technology, • Wi-fi symbol to represent the internet • Bug, to represent a cyber-bug
(e.g. floods,
ofstorms,
technological
etc.) advances mitigationinformation
and adaptation infrastructure and ecosystem collapse (land
• Bag of money with hole, money falling out • Figures (people), with a downwards arrow
between them to signify underutilization
• Prisoner icon, to represent illicit behaviour Unmanageable A significant
• Lightning bolt, toincrease
price level ofquality
in
decline
the
signify energy
goodsand andquantity
andgeneral
in the available
shock
services in Extreme weather events
of fresh water Major property,
Intended
infrastructure
or unintended
and artificial intelligence
and networks
and adverse Governments and businesses fail to
and networkscyberattacks or malware
Large-scale
or ocean) causing large economic damages, Massive incident of data
that have the potential to challenge
of people

fraud/theft
key economies. environmental
consequences
damage as well
of technological
as human geopolitical tensions
for the or widespread loss
(e.g. floods, storms, etc.)
Cyber dependency increases vulnerability Irreversible consequences
health and/or economic activity. loss caused advancesby extreme such
weather
as artificial
events. intelligence,
to mitigate climate
to outage change, protect
of critical information environment, of resulting
trust in the
in Internet.
severely
geo-engineering and synthetic biology populationsinfrastructure
and help businesses(e.g. internet, satellites,
depleted resources for humankind as

social stability. For each of these “Risks

1. Economic 2. Environmental causing human, environmental andimpacted byetc.) climate
and change
networks tocausing
adapt. widespread well as industries.
economic damage. disruption.
1.9. IDEA
2.1. IDEA
2.2. IDEA
2.3. IDEA 5.4.

in Focus”, it describes three existing,

IDEA IDEA IDEA IDEA
• Price tag featuring multiple dollar symbols to • Tornado • Globe with thermometer, representing the • Upside-down fish with crosses for eyes,
Risk: Unmanageable inflation Risk: Extreme
represent high
weather events
pricesdroplet
Risk: Failure of climate-change Risk: Major biodiversity loss
world climate• Wi-fi symbol to represent the internet
Risk: Massive
representing•environmental
incident of data
consequences
World Economic Forum Global Risk Report Graphics • Water • Android-style robot to represent technology, Bug, to represent a cyber-bug
(e.g. floods, storms, etc.) mitigation and
andartificial
adaptation and ecosystem collapse (land fraud/theft
Failure of climate-change
Unmanageable increase in the general intelligence and networks
or ocean)

practical initiatives that could help to

price level of goods and services in Major property, infrastructure and Governments and businesses fail to Wrongful exploitation of private or
key economies. environmental damage as well as human
mitigation and adaptation
Irreversible consequences for the
loss caused by extreme weather events. to mitigate climate change, protect environment, resulting in severely unprecedented scale.

build resilience. The concept of the

populations and help businesses depleted resources for humankind as
1. Economic 2. Environmental impacted by climate change to adapt. well as industries. IDEA

IDEA IDEA IDEA IDEA • Cloud with a padlock in the middle, to represent

(dis)empowered citizen is introduced

1.9. 2.1. 2.2. 2.3. data and privacy/security
• Price tag featuring multiple dollar symbols to • Tornado • Globe with thermometer, representing the • Upside-down fish with crosses for eyes,
Risk: Unmanageable inflation Risk: Extreme weather events Risk: Failure of climate-change Risk:
worldMajor
climate biodiversity loss

Major biodiversity loss and

represent high prices representing environmental consequences
World Economic Forum Global Risk Report Graphics
(e.g. floods, storms, etc.) mitigation and adaptation and ecosystem collapse (land

to describe the tensions created

Unmanageable increase in the general
price level of goods and services in or ocean)
ecosystem collapse (land
Major property, infrastructure and Governments and businesses fail to
key economies. environmental damage as well as human Irreversible consequences for the
loss caused by extreme weather events. to mitigate climate change, protect

by growing cyber connectivity that

environment, resulting in severely
populations and help businesses
2. Environmental
impacted by climate change to adapt. or ocean)
depleted resources for humankind as
3. GeoPolitical
well as industries.

empowers citizens at the same time as

1.9. IDEA
2.1. IDEA
2.2. IDEA
2.3. IDEA

Risk: Unmanageable inflation • Price tag featuring multiple dollar symbols to

Risk: Extreme weather events
represent high prices
• Tornado
Risk: Failure of climate-change
World Economic Forum Global Risk Report Graphics
• Globe with thermometer, representing the
Risk: Major biodiversity loss
world climate Major natural catastrophes
• Upside-down fish with crosses for eyes,
representing environmental consequences

they feel increasingly disenfranchised

(e.g. floods, storms, etc.) mitigation and adaptation and ecosystem collapse (land
Unmanageable increase in the general
price level of goods and services in
key economies.
Major property, infrastructure and
environmental damage as well as human
Governments and businesses fail to
or ocean)
Irreversible consequences for the
(e.g. earthquake, tsunami,
from traditional decision-making
loss caused by extreme weather events. to mitigate climate change, protect
populations and help businesses
2. Environmental
impacted by climate change to adapt.
environment, resulting in severely
depleted resources for humankind as volcanic
3. GeoPolitical
eruption, geomagnetic
storms)
well as industries.

processes. The second contribution

IDEA

• Price tag featuring multiple dollar symbols to

IDEA

• Tornado
IDEA

• Globe with thermometer, representing the

IDEA
2.4.

• Upside-down fish with crosses for eyes,

Risk: Major natural catastrophes
2.5.

Risk: Man-made environmental

3.1.

Risk: Failure of national

3.2.

Risk: Interstate conflict with

further explores one impact of climate

represent high prices World Economic Forum Global Risk Report Graphics world climate representing environmental consequences
(e.g. earthquake, tsunami,
volcanic eruption, geomagnetic
Man-made
catastrophes (e.g. oil spill, environmental
radioactive contamination, etc.)
governance (e.g. failure of rule
of law, corruption, political
regional consequences

storms)
catastrophes (e.g. oil spill,
deadlock, etc.)
A bilateral or multilateral dispute between

change: coupled with rising population

Failure to prevent major man-made states escalates into economic (e.g. trade/
catastrophes, causing harm to lives, currency wars, resource nationalization),

radioactive contamination, etc.)

Major property, infrastructure and Inability to govern a nation of geopolitical
environmental damage as well as human health, infrastructure, property, importance due to weak rule of law, military, cyber, societal or other conflict.
2. Environmental 3. GeoPolitical
human loss caused by geophysical economic activity and the environment. corruption or political deadlock.

growth, it is threatening food security. 2.4.

disasters such as earthquakes,
volcanic
2.5. activity, landslides, tsunamis 3.1. 3.2.

Failure of national
or geomagnetic storms.

Finally, in the wake of the Ebola crisis,

Risk: Major natural catastrophes Risk: Man-made environmental Risk: Failure of national Risk: Interstate conflict with
World Economic Forum Global Risk Report Graphics
(e.g. earthquake, tsunami, catastrophes (e.g. oil spill,
IDEA governance (e.g. failure of rule
IDEA regional consequences IDEA IDEA

volcanic eruption, geomagnetic •radioactive contamination, etc.)

Erupting volcano
governance
of law, corruption, political
• Radioactivity symbol
(e.g. failure of rule •ABroken scale,
bilateral ortomultilateral
signify the failure of thebetween
dispute • Crossed swords to represent conflict

the potential of pandemics to threaten

storms) deadlock, etc.) rule of law
states escalates into economic (e.g. trade/
Failure to prevent major man-made

2. Environmental
Major property, infrastructure and
environmental
3. damage as well as
GeoPolitical
catastrophes, causing harm to lives,
human health, infrastructure, property, of law, corruption, political
Inability to govern a nation of geopolitical
importance due to weak rule of law,
currency wars, resource nationalization),
military, cyber, societal or other conflict.

social cohesion is discussed. deadlock, etc.)

human loss caused by geophysical economic activity and the environment. corruption or political deadlock.
disasters such as earthquakes,
2.4. volcanic activity, landslides, tsunamis
2.5. 3.1. 3.2.
or geomagnetic storms.
Risk: Major natural catastrophes Risk: Man-made environmental Risk: Failure of national Risk: Interstate conflict with
World
IDEA Economic Forum Global Risk Report Graphics
(e.g. earthquake, tsunami, catastrophes (e.g. oil spill, governance (e.g. failure of rule regional consequences
Interstate conflict with
IDEA IDEA IDEA

volcanic eruption, geomagnetic radioactive contamination, etc.) of law, corruption, political

Part 4 applies the resilience imperative

• Erupting volcano • Radioactivity symbol • Broken
A scale,
bilateral ortomultilateral
signify the failure of thebetween
dispute • Crossed swords to represent conflict
storms) deadlock, etc.)
regional consequences
rule of law
Failure to prevent major man-made states escalates into economic (e.g. trade/
Major property, infrastructure and catastrophes, causing harm to lives, Inability to govern a nation of geopolitical currency wars, resource nationalization),
military, cyber, societal or other conflict.

to one specific stakeholder – the

environmental damage as well as human health, infrastructure, property, importance due to weak rule of law,
human loss caused by geophysical economic activity and the environment. 3. GeoPolitical
corruption or political deadlock. 4. Societal
disasters such as earthquakes,
2.4. volcanic
2.5. activity, landslides, tsunamis 3.1. 3.2.

business community – with an

Risk: Major natural catastrophes
(e.g. earthquake, tsunami,
or geomagnetic storms.
Risk: Man-made environmental
catastrophes (e.g. oil spill,
IDEA
Risk: Failure of national
governance
IDEA (e.g. failure of rule
Risk: Interstate conflict with
World Economic Forum Global Risk Report Graphics IDEA
regional consequences IDEA

analysis at country and regional levels.

volcanic eruption, geomagnetic •radioactive contamination, etc.) •of law, corruption, political
Large-scale terrorist attacks
Erupting volcano Radioactivity symbol •ABroken scale,
bilateral ortomultilateral
signify the failure of thebetween
dispute • Crossed swords to represent conflict
storms) deadlock, etc.) rule of law
states escalates into economic (e.g. trade/
Failure to prevent major man-made
Major property, infrastructure and catastrophes, causing harm to lives, Inability to govern a nation of geopolitical currency wars, resource nationalization),

Drawing on a unique data set of more

environmental damage as well as human health, infrastructure, property, importance due to weak rule of law, military, cyber, societal or other conflict.
human loss caused by geophysical economic activity and the environment. 3. GeoPolitical
corruption or political deadlock. 4. Societal
disasters such as earthquakes,

than 13,000 business leaders in 140

volcanic activity, landslides, tsunamis 3.3. 3.4. 3.5. 4.1.
or geomagnetic storms.

State collapse
military coup, failed or crisis (e.g.
Risk: Large-scale terrorist attacks Risk: State collapse or crisis (e.g. Risk: Weapons of mass Risk: Failure of urban planning
IDEA IDEA Economic Forum
World Global Risk Report Graphics IDEA IDEA
civil conflict, destruction

economies, it explores the differing

• Erupting volcano • Radioactivity symbol • Broken scale, to signify the failure of the
rule of law
Individuals or non-state groups with
• Crossed or
political swords to represent
religious goalsconflict
successfully
inflict large-scale human or material
states, etc.)
civil conflict, military coup,
State collapse of geopolitical importance
Nuclear, chemical, biological and
radiological technologies and materials
Poorly planned cities, urban sprawl and
associated infrastructure create social,
environmental and health challenges.

landscape of global risks across

damage. are deployed creating international crises
failed
4. Societalstates, etc.)
due to internal violence, regional or global
instability, military coup, civil conflict, failed and potential for significant destruction.
3. GeoPolitical states, etc.

regions and offers a deep-dive into 3.3.

Risk: Large-scale terrorist attacks

IDEA
3.4.

• Building in target sight

Risk: State collapse or crisis (e.g.
IDEA
3.5.

• Burning flag
Risk: Weapons of mass
IDEA
4.1.

• Mushroom cloud, to represent nuclear/chemical

Risk: Failure of urban planning
IDEA

• Collection of urban buildings to represent an

five of the six most cited global risks

weapons urban area
civil conflict, military coup, failed destruction
Weapons of mass
Individuals or non-state groups with Poorly planned cities, urban sprawl and
political or religious goals successfully states, etc.) associated infrastructure create social,
Nuclear, chemical, biological and
inflict large-scale human or material radiological technologies and materials environmental and health challenges.

worldwide. Its aim is to inform the destruction

State collapse of geopolitical importance
damage. due to internal violence, regional or global are deployed creating international crises
instability, military coup, civil conflict, failed and potential for significant destruction.
states, etc.

discussion of which risks to prioritize 3.3.

IDEA
3.4.

• Building in target sight

IDEA
3.5.

• Burning flag
IDEA
4.1.

• Mushroom cloud, to represent nuclear/chemical

IDEA

• Collection of urban buildings to represent an

in order to build resilience within

Risk: Large-scale terrorist attacks Risk: State collapse or crisis (e.g. Risk: Weapons of mass Risk: Failure of urban planning
weapons urban area
civil conflict, military coup, failed destruction
Individuals or non-state groups with Poorly planned cities, urban sprawl and
political or religious goals successfully states, etc.) associated infrastructure create social,
Nuclear, chemical, biological and

businesses.
inflict large-scale human or material State collapse of geopolitical importance radiological technologies and materials environmental and health challenges.
damage. due to internal violence, regional or global are deployed creating international crises
instability, military coup, civil conflict, failed and potential for significant destruction.
states, etc.

IDEA IDEA IDEA IDEA

• Building in target sight • Burning flag • Mushroom cloud, to represent nuclear/chemical • Collection of urban buildings to represent an
weapons urban area

The Global Risks Report 2016 9

Part 1

Part 1:
From the refugee crisis to economic
slowdowns in emerging markets,
from ever-rising numbers of terrorist
and cyberattacks to water shortages,

Global Risks 2016 global risks have been in the headlines

in the last year. Yet so have initiatives
Part 2

to address them, such as the COP21

meeting on reducing greenhouse gas
emissions or European Union (EU)
summits to address the refugee crisis.1
The Global Risks Report exists to raise
awareness about global risks and
their potential interconnections, and
to provide a platform for discussion
and action to mitigate, adapt and
strengthen resilience.
Part 3

There is remarkable stability in this

year’s Global Risks Landscape (Box
1.1): many risks that are assessed as
above average in terms of likelihood
and impact were similarly assessed last
year. This suggests the emergence of a
new status quo, with geopolitical risks –
such as interstate conflict or terrorist
attacks2 – being at the forefront.
Part 4

Other risks rated as highly impactful

or likely, such as involuntary migration
and social instability, are partly a result
of spillover effects of insecurity and
conflict. Some geopolitical risks – such
as the failure of national governance,
which is pervasive across Latin
America and Sub-Saharan Africa (see
Figure 3) and considered to be among
the top three most likely risks in the
Middle East and North Africa, East Asia
and the Pacific, and Central Asia – are
considered to be important in some
regions but not globally impactful.
Consistent with the past, weapons
of mass destruction is ranked as the
second least likely risk to occur, but
the second most impactful if it were
to. Part 2 of this Report explores the
international security landscape and
how it could evolve in future.

Also prominent in the Global Risks

Landscape 2016 are environmental
risks such as failure of climate-
change mitigation and adaptation,
which is considered the most
potentially impactful risk and the
third most likely, with water crises,3
biodiversity loss and ecosystem
collapse rising up the list of concerns.
Environmental worries have been at
the forefront in recent years (Figure
1.1.1), reflecting a sense that climate
change–related risks have moved
from hypothetical to certain because

10 The Global Risks Report 2016

 Part 1
Box 1.1: Methodology of The Global Risks Report

This Report defines a “global risk” 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. Based on this refined definition, this year 29 global risks were identified

Part 2
and grouped into the five customary categories: economic, environmental, geopolitical, societal and technological. A
description of the risks and the methodology employed can be found in Appendices A and B.

The Report also identifies 13 global trends that can potentially drive global risks. 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.
Unlike risks, trends are occurring with certainty and can have both positive and negative consequences. Trends can alter how
risks evolve and interrelate, and they inform efforts at risk mitigation.

Figure 1.1.1: The Evolving Risks Landscape, 2007–2016

Part 3
Top 5 Global Risks in Terms of Likelihood
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Breakdown of Asset price collapse Asset price collapse Asset price collapse Storms and Severe income Severe income Income disparity Interstate conflict Large-scale
1st critical information cyclones disparity disparity with regional involuntary
infrastructure consequences migration
Breakdown of critical information infrastructure
Chronic disease Middle East Slowing Chinese Slowing Chinese Flooding Extreme weather Extreme weather Extreme weather
2nd in developed instability economy (<6%) economy (<6%) imbalances imbalances events events events
countries

Oil price shock Failed and failing Chronic disease Chronic disease Corruption Rising greenhouse Rising greenhouse Unemployment Failure of national Failure of climate-
3rd states gas emissions gas emissions and governance change mitigation
underemployment and adaptation
Breakdown of

Part 4
critical information
China economic Oil and gas price Global governance Fiscal crises
infrastructure Biodiversity loss Cyber attacks Water supply crises Climate change State collapse or Interstate conflict
4th hard landing spike gaps crisis with regional
consequences

Asset price collapse Chronic disease, Retrenchment Global governance Climate change Water supply crises Mismanagement Cyber attacks High structural Major natural
5th developed world from globalization gaps of population unemployment or catastrophes
(emerging) ageing underemployment

Top 5 Global Risks in Terms of Impact

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Asset price collapse Asset price collapse Asset price collapse Asset price collapse Fiscal crises Major systemic Major systemic Fiscal crises Water crises Failure of climate-
1st change mitigation
and adaptation
Breakdown of critical information infrastructure
Retrenchment Retrenchment Retrenchment Retrenchment Climate change Water supply Water supply Climate change Rapid and massive Weapons of mass
2nd from globalization from globalization from globalization from globalization crises crises spread of infectious destruction
(developed) (developed) (developed) diseases

Interstate and Slowing Chinese Oil and gas Oil price spikes Geopolitical Food shortage Water crises Weapons of mass Water crises
3rd civil wars economy (<6%) price spike crises imbalances destruction

Breakdown of
critical information
Pandemics Oil and gas Chronic disease Chronic disease
infrastructure Asset price collapse Unemployment Interstate conflict Large-scale
4th price spike imbalances weapons of mass and with regional involuntary
destruction underemployment consequences migration

Oil price shock Pandemics Fiscal crises Fiscal crises Extreme energy Extreme volatility in Failure of climate- Critical information Failure of climate- Severe energy
5th price volatility energy and change mitigation infrastructure change mitigation price shock
agriculture prices and adaptation breakdown and adaptation

Economic Environmental Geopolitical Societal Technological

Source: World Economic Forum 2007–2016, Global Risks Reports.

Note: Global risks may not be strictly comparable across years, as definitions and the set of global risks have evolved with new issues emerging on the 10-year horizon.
For example, cyberattacks, income disparity and unemployment entered the set of global risks in 2012. Some global risks were reclassified: water crises and rising
income disparity were re-categorized first as societal risks and then as a trend in the 2015 and 2016 Global Risks Reports, respectively. The 2006 edition of the Global
Risks Report did not have a risks landscape.

As in previous years, assessments of risks in this year’s Report are based on the Global Risks Perception Survey. The survey
captures the perceptions of almost 750 experts and decision-makers in the World Economic Forum’s multistakeholder
communities and was conducted in Fall 2015. Respondents are drawn from business, academia, civil society and the public
sector and span different areas of expertise, geographies and age groups.

The analysis takes into account three complementary angles on global risks: an assessment of their likelihood and impact
(Figure 1), and how these have evolved over the years (Figure 1.1.1); a regional breakdown of the perceived likelihood of risks
(Figure 3); a mapping of interconnections among risks (Figure 2) and among risks and trends (Figure 4); and the difference of
the level of concern in the short and long term (Figure 1.2).

The Global Risks Report 2016 11

Part 1

insufficient action has been undertaken To tease apart short- and longer- awareness about the importance of
to address them. term thinking and shed light on the long-term thinking about global risks –
psychology behind the responses, especially significant when it comes to
Figure 1.1 shows risks that have the survey asked experts to nominate attempting to limit the extent of climate
registered the highest increases and risks of highest concern over two change and to adapt to the change
declines in perceptions of likelihood time horizons: 18 months and 10 that is already inevitable.
Part 2

and impact, notably large-scale years. Global risks that have recently
involuntary migration, now rated been in the headlines – such as Three risk clusters are discussed in
as the most likely and fourth most large-scale involuntary migration, more detail below: the cluster linking
impactful. Other risks gaining in interstate conflict and cyberattacks – the failure of climate change mitigation
prominence on both dimensions tend to feature higher as short-term and adaptation with water crises and
include profound social instability concerns, indicating that recent events large-scale involuntary migration; the
– also one of the most highly significantly influence our thinking cluster linking large-scale involuntary
interconnected risks, as shown in about risks and, hence, stakeholder migration with a range of risks related
Figure 2. action. to social and economic stability;
and the cluster linking economic
Part 3

The economic risks of unemployment The longer-term concerns are more global risks with uncertainty around
and underemployment, asset related to underlying physical and the impacts of the Fourth Industrial
bubbles, and fiscal crises in key societal trends, such as the failure Revolution.
economies have increased in both of climate change mitigation and
likelihood and impact over the past adaptation, water crises and food
two years, although these have been crises. Interestingly, extreme weather Coping with the Changing
overtaken by other concerns. At the events and social instability are
same time, cyber threats remain at considered a concern in both the short
Climate
the top of respondents’ minds, as in and long term, reflecting an expectation
Climate change and water crises,
previous years. that the frequency and intensity of
Part 4

which have featured prominently in the

crises will continue to rise. One of
Global Risks Landscape over the last
the roles of this Report is to raise
five years, are joined this year by large-
scale involuntary migration. The links
Figure 1.1: The Changing Global Risks Landscape 2015–2016: The 10 Most among these risks appear clearly in
Changing Global Risks the Global Risks Interconnections Map
2016 (Figure 2), and the intertwined
challenges are unfolding against a
background of many socio-economic
pressures.

As illustrated by the Global Risks

Interconnections Map, climate change
and water risks are intricately linked
to food security concerns – a subject
explored further in Part 3 of this Report.
About 70% of the world’s current
freshwater withdrawals are used
for agriculture, rising to over 90% in
most of the world’s least-developed
countries.4 Carbon dioxide also causes
ocean acidification, which makes it
harder for small shellfish to form the
calcium carbonite shells they need to
grow – with implications rising up the
food chain, threatening the availability
of food from the seas as well.5

Challenges around water management

are already immense. On the one
hand, over a billion people lack access
to improved water. Some 2.7 billion
– or 40% of the world’s population –
suffer water shortages for at least a
Source: Global Risks Perception Survey 2014 and 2015, World Economic Forum.
month each year.6 The Organisation
Note: We are presenting the 10 global risks assessments that have changed the most since the Global Risks for Economic Co-operation and
Report 2015. To identify them, we take the distance between the two years for each risk, in absolute terms.

12 The Global Risks Report 2016

 Part 1
Figure 1.2: The Top Five Global Risks of Highest Concern for the Next 18 Months 2030 across Asia.10 Globally, based
and 10 Years on current trends, water demand
is projected to exceed sustainable
supply by 40% in 2030.11 Adding to
the pressures, agricultural production
will have to increase in the coming

Part 2
decades to feed a growing population
and a rising demand for meat.12

Unless current water management

practices change significantly, many
parts of the world will therefore face
growing competition for water between
agriculture, energy, industry, and
cities. Tensions are likely to grow within
countries, especially between rural

Part 3
and urban areas and between poorer
and richer areas, and also potentially
between jurisdictions. More than 60%
of the world’s transboundary water
basins lack any type of cooperative
management framework. Even where
such frameworks do exist, they often
do not cover all states that use the
basin.13 Interstate tensions over water

Part 4
access are already apparent in some
Source: Global Risks Perception Survey 2015, World Economic Forum.
parts of South Asia, and could impact
Note: Survey respondents were asked to select up to five risks of highest concern for each time frame. The the evolution of the international
percentage indicates the share of respondents who selected the specific global risk among the five risks of highest
concern for each time frame. See Appendix B for more details. To ensure legibility, the names of the global risks are
security landscape, as discussed in
abbreviated; see Appendix A for the full names and descriptions of the risks. Part 2.

Climate change will only exacerbate

Development (OECD) estimates that 4 Brazil exemplifies the challenge of these challenges. The latest
billion people could be living in water- managing water even within a single Intergovernmental Panel on Climate
scarce areas by 2050. According to country: it has 12% of the planet’s Change (IPCC) report, in November
the World Water Council, 80% to 90% freshwater reserves, mostly in the 2014, reaffirmed that this warming in
of the scarce water in many of the Amazon region, but much of this water the climate system is “unequivocal”
world’s arid and semi-arid river basins does not reach its urban population. and that human influence is “extremely
is already being used, and over 70% Sao Paulo, which contributes a third likely” to be the dominant cause.
of the world’s major rivers no longer of Brazil’s GDP, has a lower water- Atmospheric concentrations of three
reach the sea.7 On the other hand, per-capita availability than even the major greenhouse gases (carbon
inadequate sanitation exposes 2.4 historically drought-prone north- dioxide, methane and nitrous oxide) are
billion people to many diseases, such eastern region of the country. With at their highest level in 800,000 years,
as diarrhoeal disease, which is the third hydropower constituting approximately with CO2 concentration up 13% since
leading cause of death among children 64% of the electricity power load, there 1990. The world today is estimated to
under five.8 are conflicts caused by unclear rules be about 1°C warmer, on average, than
about water governance at federal, it was in the 1950s, and the effects
Governance – at global, regional state and basin levels.9 are being felt. Regional analysis of the
and national levels – lies at the Global Risks Perception Survey shows
heart of water management. Even Water management is further that declining water availability features
many developed countries are complicated around the world by as the most likely risk in the Middle
failing to proactively address water economic pressures – developing an East and North Africa and South Asia,
vulnerabilities, instead reacting only economy can be a thirsty business, and the likelihood of extreme weather
after extreme weather events. In based on unsustainable use of water. events is considered especially high in
developing countries, the political As countries industrialize, more fresh North America, South Asia and East
challenges inherent in water water is needed for energy production Asia and the Pacific (see Figure 3).
infrastructure and conservation – the United States allocates about
projects are exacerbated by greater 40% of its fresh water to energy, Scientists caution that a total
warming of 2°C implies a high risk of
financing challenges. Europe over 30% – and the demand
catastrophic climate change that could
for water for energy and industry
damage human well-being on a global
is forecast to increase by 70% by
scale. Yet even if each country meets

The Global Risks Report 2016 13

Part 1

its Intended Nationally Determined or rapidly? The average sea level is fossil fuel emissions – the impact will be
Contributions plans, submitted to the already rising by 3 millimetres per global.
United Nations Framework Convention year, faster than any other time in
on Climate Change (UNFCCC) and the last two millennia; many of the Failure to address climate change and
agreed at the Paris Climate Conference world’s cities lie on the coast or on water crises will forcibly displace more
in December 2015 (Box 1.2), warming is river banks, with poor neighbourhoods people – the IPCC warns that droughts
projected to reach 2.7°C by 2100. and coastal floods could cause
Part 2

most likely to be in low-lying areas

vulnerable to flooding.14 Another “large-scale demographic responses
Given these developments, it will, source of uncertainty is the “Amazon – for example, through migration”.
therefore, be impossible to live Dieback” scenario: recent oscillation Forced displacement is already at an
without adaptation – but adaptation between unusually dry years and heavy unprecedented level, causing severe
planning is complicated by the flooding could be an early indicator of humanitarian challenges, as explored in
difficulty of predicting not only the irreversible system phase change.15 If the following section.
expected degree of warming but the Amazon stops absorbing carbon
also the expected pace. One source and starts releasing the estimated
of uncertainty is the Arctic feedback 120 billion tonnes of carbon it holds –
Part 3

loop – will ice sheets collapse slowly equivalent to 15 years’ worth of 100%

Box 1.2: The Paris Agreement: A Historic Turning Point on Climate Change

The adoption of the Paris Agreement on 12 December 2015 by 195 governments is a major turning point in the global fight
against climate change. The world’s nations agreed to limit global average temperature rise to “well below 2°C above pre-
industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels”. They also agreed to a
Part 4

review mechanism that will help ratchet up efforts every five years from 2018, as well as a floor for financial flows to developing
countries.

The Paris outcomes are far more ambitious than had been expected – a collective recognition of the dangerous risks posed by
climate change as well as the cost of inaction. These outcomes are also sending unmistakable signals to the global markets that
governments are willing to put aside their differences and do their part in tackling this biggest of global challenges.

In the coming months and years, the impact of the Paris Agreement will be felt in board rooms, banks and stock exchanges
across the world. The expectation is that, as a result, trillions of dollars needed for investments will be unlocked to put the world
onto a climate-safe pathway. The time has come to pivot from business-as-usual.

One of the innovations that emerged from Paris was the official recognition of the role played by business, investors, cities and
provinces in driving and delivering climate action. Effective mobilization of these constituencies – alongside civil society and
faith-based groups – has indeed contributed to this successful outcome. But such mobilization was possible only because an
ever-growing number of global businesses and cities today understand that deepened globalization has heightened
vulnerabilities through global supply chain shocks. And that these disruptions could be further triggered by climate volatility and
policy uncertainty.

To date, nearly 190 governments have submitted their climate action plans, covering over 95% of total global emissions. These
efforts alone will not suffice, as even the most optimistic estimates suggest that these pledges taken together would contain
warming only to 2.7°C above pre-industrial levels. But these bottom-up efforts will provide a solid foundation from which
ambition can be ratcheted up in the coming years.

Developments in the real world will also help, with cost-competitive alternatives already available today. In 2014, renewables
made up over half of total energy investment, while the cost of solar panels has fallen by 75% and that of batteries for electric
vehicles by half since 2009. Wind-generated electricity in over 50 countries is now at grid parity – when the customer of
electricity pays the same to buy wind energy as to buy traditional technologies.

Looking forward, global attention will turn firmly towards implementation and developing specific action plans to deliver a
low-carbon, climate-resilient world. With a clear direction of travel, the immediate next step will focus on policy frameworks and
incentives that will deliver the results, as well as on the consolidation and scaling of much-needed public-private cooperation.

For businesses, the Paris Agreement is a licence not only to implement climate-friendly practices but also to innovate and
develop the next generation of solutions. The race is on for forward-looking businesses and governments alike to capitalize on
these new business opportunities for growth and resilience.

14 The Global Risks Report 2016

 Part 1
Humanity on the Move Three factors increase the risks posed Second, the global humanitarian
by involuntary migration. First, people architecture is not able to effectively
The Global Risks Landscape sees a stay in host countries longer than respond to today’s challenges. Many
noticeable increase in both perceived they used to. The average duration of countries, including some of Syria’s
likelihood and impact of the risk of displacement lengthened from nine neighbours, have either not signed
large-scale involuntary migration.16 years in the 1980s to 20 years by the the Geneva Convention governing the

Part 2
The definition of this risk includes mid-2000s.19 Fewer than one in 40 status of refugees, or do not uphold
forced migration caused not only by conflicts is now resolved within three it because there is no enforcement
violence and conflicts, such as those years, and more than 80% last for more mechanism. Without formal refugee
driving the exodus from Syria and Iraq, than 10 years. status, refugees can find it harder to
but also for environmental or economic access formal employment, social
reasons. The risk is seen as more The longer people stay away from assistance or travel documents.
relevant in the next 18 months than the their home countries, the harder it is
next 10 years (see Figure 1.2). However, to return: often they have lost their The institutional architecture for
it is strongly interconnected with livelihoods, family ties and physical refugees focuses on providing a short-
other risks that are considered highly property; furthermore, property rights term response to people displaced

Part 3
worrisome in the longer term: not only issues for returning refugees can be by conflict and violence. It assumes
interstate conflict and state collapse but complex. Protracted refugee situations refugees will settle in camps and
also climate change and water crises, become even more difficult when primarily need humanitarian assistance,
as discussed above. refugees are granted only limited socio- whereas most now settle in urban
economic rights and opportunities, areas20 – where humanitarian actors
Global refugee flows have reached a limiting their scope to reclaim have not yet developed well-functioning
level that is unprecedented in recent livelihoods and dignity. operating models – and primarily
history. In 2014, 59.5 million people need resilience building. Moreover,
were forcibly displaced in the world, The lack of effective integration policies the Geneva Convention does not

Part 4
compared to 40 million at the time in most countries (see Box 1.3 for an cover environmental migrants, whose
of World War II.17 More than half of example) can lead to the formation of numbers are expected to rise for
these recent refugees come from ghettos or isolated communities on the reasons explored above.
three conflict-ridden countries: Syria, margins of society, ripe for frustration
Afghanistan and Somalia.18 The trend and vulnerable to disenchantment and Third, most forced migrants move to
is upwards: during 2014, the number even radicalization. In Europe, the rapid other developing countries, where
of people displaced – 42,500 per day inflow of migrants in 2015 challenged social and governance systems may
– was four times greater than in 2010. local financial and absorption already be weak or likely to fail (see
Although the recent crisis in Europe has capacities and exacerbated the trend Figure 3). In 2014, 86% of refugees
dominated headlines, and is reflected in towards polarization of societies and lived in developing countries and about
the risk being considered most likely in the political spectrum, which in turn 12% in least-developed countries.
that region (see Figure 3), the challenge undermined the efficiency of European In emerging economies, resource
is global with most regions affected governance structures. constraints can be significant: the UN
(see Figure 1.3). estimates the cost of housing Syrian
refugees in Jordan to be over 7% of
Jordanian GDP.21

Figure 1.3: Global Displacement Hotspots, 2014 All these factors, if unaddressed,
can fuel risks in host and destination
countries. Although research on the
economic effects of refugee inflows is
limited, it suggests that refugees can
make a positive contribution to the host
country’s economy through increased
demand, inflows of remittances,
promoting the use of technology
and engaging in international trade.22
In advanced, ageing economies,
incoming refugees can contribute to
keeping aggregate demand high and
the workforce stable.

Multistakeholder approaches that

include local business communities
Source: UNHCR 2015b, p. 3.
can contribute both to mitigating risks
Note: A “hotspot” is defined as a country or area that has been suffering from conflict-related displacement flows that could emerge from large-scale
during the reporting period.
involuntary migration and to building

The Global Risks Report 2016 15

Part 1

resilience in transit countries and Economic Growth 4.0 Economic concerns are currently
countries of destination. Measures centred on the corporate and public
to consider include work permits Fiscal crises in key economies, asset debts built up by emerging markets
and access to jobs, skills recognition bubbles, and structural unemployment in the recent low-interest rate
and training, and access to schools and underemployment are among environment: the International Monetary
and public health services. At the economic risks rated as both highly Fund (IMF) estimates the extent of
corporate over-borrowing at up to
Part 2

same time, at the global level, the impactful and likely; another global
development community could help systemic financial crisis is rated as US$3 trillion,23 and the corporate debt
by focusing more strongly on building somewhat less likely than last year, to GDP ratio rose by 26 percentage
resilience and helping refugees to but similarly impactful. Taken together, points between 2004 and 2014 for this
transition into self-reliance. This will these risks could result in another group of countries.24 Particular risks
be even more important in light of the economic slowdown with knock-on could emanate from China, where
slow and unstable growth the world effects on employment and, ultimately, continued credit-based measures to
is currently experiencing, which may social stability. address concerns about a slowing
further limit countries’ absorptive economy could further heighten
capacities. vulnerability to a financial crisis.
Part 3

Box 1.3: Refugees in Malaysia

Since the 1980s, hundreds of thousands of Rohingya, a stateless ethnic and religious minority from Myanmar, have sought
asylum in nearby countries, including Bangladesh, Thailand and Malaysia. In recent years, an increasing number of Rohingya
people have fled by boat: 25,000 people departed from the Bay of Bengal just in the first quarter of 2015. Over 50,000 Rohingya
refugees are registered with the United Nations High Commissioner for Refugees (UNHCR) in Malaysia,1 with thousands more
unregistered. The situation in Malaysia is at once a protracted refugee situation – with multiple generations of refugees, some of
Part 4

whom have achieved moderate de facto integration – and a humanitarian crisis marked by a steady influx of emaciated and
traumatized asylum-seekers.

The legal status of refugees in Malaysia is tenuous: the country has not ratified key international agreements (most notably the
1951 Refugee Convention and its 1967 Protocol), and it lacks a legal and administrative framework for responding to refugees.
While the UNHCR has primary responsibility for refugees – including registration and documentation – there are significant gaps
in protection and assistance. Refugees cannot attend Malaysian schools, face barriers accessing healthcare, and confront a
range of security and protection risks, including detention.

Despite these challenges, refugees invariably show a vibrant entrepreneurial spirit, undertaking formal and informal work to
support themselves and their families, at restaurants and retail shops, schools, factories and farms, operating their own small
businesses, cleaning, collecting goods to recycle and working in skilled professions, for instance as electricians. Specific
examples include refugees opening tea shops with the help of Malaysian acquaintances, opening grocery shops that serve as
meeting places for other refugees, and opening home day care for Malaysian children in the neighbourhood. However,
restrictions prohibiting them from undertaking employment legally mean that most resort to difficult jobs for low pay, and their
illegal status leaves them vulnerable to abuse and exploitation.

Rohingya refugees seek to improve their lives and livelihoods over the course of protracted displacement in various ways. They
adopt skills and techniques – such as learning the local language and negotiating with authorities – to help them secure
employment and make their way. Contrary to the widespread perception that refugees are a burden for the country of asylum,
only a small proportion of refugees in Malaysia receive formal assistance from non-governmental organizations or the UNHCR;
instead, most find innovative, albeit challenging, ways to support themselves and their families. They rely primarily on support
from other refugees, community associations, and members of the host population to manage shocks, find work, overcome
bureaucratic barriers and gain access to institutions. In the absence of formal social protection and services, Rohingya refugees
have begun to develop their own: refugee-run community organizations, for example, register members, issue marriage
certificates, operate convalescent shelters and help refugees find work.

Although it is important to recognize what refugees can do for themselves, the livelihoods of even the most successful are
precarious. Many have relevant and transferable skills and a genuine desire to bring something to the communities in which they
live, yet there is a marked dissonance between what refugees stand to contribute and the restrictive policies that limit their ability
to do so. Addressing this gap requires a shift away from seeing refugees as passive victims or recipients of assistance or goods
to understanding them as active agents pursuing lives and livelihoods in an extremely challenging environment, and in doing so
contributing to the countries where they seek asylum.

Note
1
UNHCR 2015a; UNHCR 2015c.

16 The Global Risks Report 2016

 Part 1
Concern is growing over debt levels could undermine the sustainability would accentuate risks associated with
at a time when long-term global of high debt and lead to reversals in unemployment and the weak fiscal
economic prospects are expected to capital flows. position of many key economies.
remain weak as a result of a worldwide
slowdown in productivity growth over The result could be numerous In developed countries, concerns
the past decade. In the short term, corporate and potentially sovereign remain about debt levels – mainly
lower commodity prices and further

Part 2
defaults in emerging markets, public – creating another vulnerability
appreciation of the dollar could pose triggering a financial crisis and further in the interconnected global
balance sheet risks to both public slowing growth. In turn, slower economy. National economic crises
and private sectors in countries with a growth in emerging economies can spark global slowdowns, but
high share of debt denominated in US could further reduce commodity international governance does not have
dollars; in emerging markets, dollar- prices, exacerbating exchange rate mechanisms in place to address the
denominated corporate debt issued shifts.26 With declining liquidity in underlying risks, which are under the
in 2015 stands at US$120.5 billion in financial markets in emerging market purview of national economic policies.
2015.25 Also plausible is an increase economies,27 a crisis in an emerging Because any country could be a weak
in risk premiums on investments in market could spark volatility in global link, it is critical to strengthen resilience

Part 3
emerging markets, which have been financial markets, leading to a global in all countries.
compressed in recent years. Interest economic slowdown (see Box 1.4). This
rates are likely to go up in future, which

Box 1.4: China’s Financial Vulnerabilities and the Transition to the New Normal

Because of its sheer size and rapid development, China plays a prominent role in shaping the global economic landscape. The

Part 4
country is now at a critical juncture as it transitions to a new phase of its economic development – referred to as a “new normal”
by President Xi – in which its economy is based less on investments and exports and more on consumption and services. In the
new normal, the Chinese economy will be more driven by market forces; it is expected to grow more slowly than its recent
annual average of 7%, but more sustainably. However, whether this transition will be orderly is uncertain.

Uncertainty centres on the massive corporate debt built up by traditional industries that drove China’s last two decades of
growth but now face lower demand. The IMF estimates, for instance, that, at the end of 2014, the ratio of total liabilities to equity
in China’s construction sector exceeded 250;1 in the oil and gas sector, the ratio has more than doubled since 2007, albeit from
a lower base.

China’s financial sector is another, related cause for concern. The Chinese banks that fuelled the rapid credit growth in now-
declining industries consequently face worsening asset quality and non-performing loans. Their profitability has plummeted over
the past year, adding to concerns about the fragility and vulnerability of China’s underdeveloped financial system – which is
dominated by large state banks and casts a large shadow banking sector. The central bank’s intervention in August 2015 to
weaken the renminbi could increase the risks of capital outflows, making funding and liquidity conditions for banks even
tougher. It could also exacerbate the risk of default of Chinese companies that borrowed in foreign currency.

The government faces a dilemma. If it tightens credit conditions, it could reduce investment more quickly than consumption can
increase to compensate, and cause massive defaults among struggling and heavily leveraged companies. This could mean a
much more severe economic slowdown, potentially causing a surge in unemployment and social unrest. However, if the
government lets more credit flow to avoid these destabilizing defaults, it risks further increasing the indebtedness of
underperforming industries and creating bigger problems down the line. The government seems to have opted for letting more
credit flow: in October 2015, the central bank lowered its benchmark rates and relaxed reserve requirements for banks.
The hope is that more of the new liquidity will flow to productive service-based activities and high-end manufacturing that will
yield higher returns and accelerate the transition to the new normal. Mitigating the risks of this further increase in debt, China still
has policy buffers to absorb financial shocks – it has a relatively favourable fiscal situation, including low debt and large foreign
reserves. This allows the central government to be lender of last resort for heavily indebted local governments, state-owned
banks and enterprises; to intervene to stabilize the stock market; or to adopt stimulus plans.

However, overreliance on these buffers could exacerbate existing vulnerabilities and impede the transition process. Instead, the
government should invest in improving the nascent safety net to boost consumption in a country where, on average,
households save about 30% of their disposable income, one of the world’s highest.2

Notes
1
IMF 2015d.
2
Roberts 2015.

The Global Risks Report 2016 17

Part 1

With longer-term trends such as European countries that do not dependence rises, the resulting
demographic changes and rising react appropriately to technological interconnectivity and interdependence
wealth disparities likely to heighten change could lose 600 billion euros in can diminish the ability of organizations
economic and social pressure in value added over the next 10 years, to fully protect their entire enterprise.
emerging economies over the next corresponding to about 10% of As more organizations move to digitize
10 years, there is renewed urgency Europe’s industrial base.32 Businesses, their unique business value within more
Part 2

to generate growth. As explored in policy-makers and civil society connected environments that rely more
the Global Competitiveness Report therefore need to find appropriate and more on machine learning and
2015–2016, productivity – the major frameworks to address four high-level automated decision-making, cyber
driver of growth – has been declining in risks associated with the transformation resilience takes on a new importance.
recent years.28 towards a more digitized economy. Although organizations may recognize
the benefit of cyber technologies for
Many hope that emerging technologies First: cyber-related risks. Cyberattacks their bottom lines, they may not be
will fuel a new wave of productivity and related incidents have been fully internalizing cyber security risks
and growth. The pace of innovation entering the global risks landscape and making the appropriate level of
is increasing and the spread of as among the most likely and most investment to enhance operational
Part 3

technologies is inevitable,29 giving rise potentially impactful risks for the past risk management and strengthen
to individual innovations and disrupting two to three years – in North America, organizational resilience. Particular
business models, processes and cyberattacks ranks as the most likely attention is needed in two areas that
products in ways that will require rapid risk by far (see Figure 3) – with the are so far under-protected: mobile
adaptation.30 A recent study suggests potential threat for doing business internet and machine-to-machine
that internet-related technologies explored further in Part 4. Cases connections. It is vital to integrate
such as mobile internet, automation have been rising in both frequency physical and cyber management,
of knowledge work, the Internet of and scale. They have so far been strengthen resilience leadership and
Things and cloud technology will be the isolated, concerning mostly a single organizational and business processes,
most disruptive and generate the most entity or country, but as the Internet and leverage supporting technologies.
Part 4

economic benefit (see Figure 1.4).31 of Things leads to more connections

between people and machines, Second: the exchange of data between
The failure to understand and address cyber dependency – considered by countries and stakeholders. Data have
risks related to technology, primarily survey respondents as the third most been called “the oil of the 21 century”,
the systemic cascading effects of important global trend (see Figure and a predictable legal framework is
cyber risks or the breakdown of critical 4) – will increase, raising the odds of a needed to realize the full economic
information infrastructure, could have cyberattack with potential cascading potential of digitization. Recent cases of
far-reaching consequences for national effects across the cyber ecosystem. As policy reversal have created uncertainty
economies, economic sectors and a result, an entity’s risk is increasingly about the legal situation, which can
global enterprises. By one estimate, tied to that of other entities. As cyber hamper investment and adaptation
of the latest technologies. Given the
inherent international nature of data
flows, in areas such as supply chains
Figure 1.4: Estimated Potential Economic Impact of Technologies, US$ trillion, or 3D printing, national governance
Estimated potential economic impact of technologies
annual needs to be complemented by
a functioning international legal
11 3.7-10.8
framework. However, the current
10
regulatory regime is underdeveloped
High
9 and lacks the necessary legal certainty
8 Low in areas such as privacy, transparency,
7
Range of sized potential
encryption control, the effect of
2.7-6.2 1.7-6.2
6 5.2-6.7 economic impacts intellectual property regimes on data
5 1.7-4.5 that cross borders, and the impact
4
of proprietary data on competition.
Given the many actors and industries
3

2 0.2-1.9

1
0.7-1.6
involved and the competing interests
0.1-0.6 0.2-0.6 0.2-0.5 0.1-0.5

0
0.2-0.3
at stake, stakeholders will probably
struggle to find common agreement.
Mobile Internet

Automation of
knowledge work

The Internet of Things

Cloud technology

Advanced robotics

Autonomous and near-

autonomous vehicles

Next-generation
genomics

Energy storage

3D printing

Advanced materials

Advanced oil and gas

exploration and recovery

Renewable energy

Moreover, the physical infrastructure

for data exchange, such as undersea
cables, could also become a target in
international conflict or terrorism.

Third: changes to the work

Source: Based on Manyika et al. 2013. environment. Although there is a lot
Note: Projections are to 2025 and include sized applications and consumer surplus.
of uncertainty about how many new

18 The Global Risks Report 2016

 Part 1
Box 1.5: Pathways to Resilience: Effective Leadership and Institutional Values

Global risks recognize no geographic boundaries. Whether from natural or man-made or cyber disasters, the cascading effects
can be felt oceans away. Escalating terrorist attacks in Africa, Europe and the Middle East; natural disasters related to climate

Part 2
change; and health disasters from infectious diseases increasingly impose both economic and human costs. How can the
global community prevent or mitigate the adverse effects of catastrophic events in our increasingly complex and quickly evolving
environment?

The Global Agenda Council (GAC) on Risk and Resilience advocates four key activities for companies, organizations and
governments to build resilience at national and global levels.1 These recommendations resulted from a detailed study of entities
that proved to be resilient in recent disasters, including Nepal’s 2015 earthquake, the 2014 Ebola outbreak and Chile’s 2010
earthquake, along with an assessment of data from four sources including the Organisation for Economic Co-operation and
Development, the U.N. Office for the Coordination of Humanitarian Affairs, the World Bank and the Zurich Insurance Group.

Part 3
1. Clarify roles and responsibilities. During a crisis, it is critical to have clearly delineated and understood senior official and
c-suite executive roles and responsibilities for risk and incident management. Confusion around “who is in charge” or “who has
authority” wastes crucial time and resources, and makes response and recovery less efficient and effective. The need for
well-defined roles becomes heightened when an organization faces novel or rapid-onset disasters or emergencies, such as
those resulting from cyberattacks. Pre-determining, training and exercising roles, capabilities and plans helps to ensure an
organization’s risk readiness. The successful management of complex crises also requires a capacity for adaptability and
flexibility. Crisis managers must be able to adjust pre-established plans as needed given the unique characteristics of the crisis.

2. Develop Crisis Leadership Characteristics. Organizations that successfully position for, respond to and recover from

Part 4
major events also consistently have effective leadership – the qualities and actions of those with authority and influence can
empower their entities to be resilient. Such leaders are steady and decisive in the face of uncertainty and pressure. They make
decisions in a timely and prioritized way, and communicate them transparently. Recognizing that they cannot address risks
alone, they galvanize others and are clear about what assistance they require. They understand when a disaster requires them
to cut through policies that may prevent or delay action. Leaders who are effective during and after a crisis are those who have
earned trust through their demonstration of openness, transparency, responsiveness and accountability. They are seen as
honest and standing up against corruption. For example, an IMF assessment attributes much of Chile’s effective recovery from
the 2010 earthquake to the nation’s “technocratic, rules-based, and transparent” leadership – and to its institutional practices,
including the rule of law.2 Another example is seen in Norwegian Prime Minister Jens Stoltenberg’s speech in the wake of the
July 2011 terrorist attacks in Norway, which demonstrated how leadership during a crisis can significantly result in both
increased trust in government and meet citizens’ expectations of responsiveness. These examples also highlight the role of
meaning making – that is, the capacity for leaders to make sense of an adverse event and articulate to the public a clear path
forward in a state of emergency.

3. Leverage expertise. When confronted with an unprecedented emergency, strategic crisis managers must be able to quickly
identify and mobilize the most relevant and trustworthy expertise to help understand and respond to the crisis. Knowledge
management systems and expert networks need to be set up in advance and across multiple sectoral, professional and
disciplinary boundaries. Understanding the implications of the crisis beyond the immediate consequences and anticipating the
potential pathways of cascading effects requires appropriate crisis management structures that enable additional expertise to
formally support decision-making. For example, the United Kingdom’s Scientific Advisory Group in Emergency (SAGE) is an
independent support group that provides science-based expertise for the management of complex and unprecedented crises
to the UK cabinet. Access to such expert “force-multipliers” could help both public and private entities understand and address
the unique aspects of a crisis. Having access to specialized expertise is especially crucial for novel or multi-faceted evolving
crises – such as the Great East Japan Earthquake, which impacted the Fukushima nuclear reactor and caused many
companies to struggle with what decisions to make.

4. Create a culture of integrated risk management and multistakeholder partnerships. Another necessary institutional
value is the recognition of the scope of global risks and the need for partnerships to address them. A culture of risk
management – the beliefs, norms and values that underpin daily actions – must span the whole organization, including its
supply chains. Entities can no longer afford to have different types of risks managed by different policies and operating
procedures and by different officials, executives and agencies. All parts of an organization must collaborate transparently on risk
management through integrated planning because of the potential for risks to have cascading consequences, including
spillovers between the virtual and physical realms – for example, a flood disabling a server farm, or a cyberattack interrupting
electricity supply.

The Global Risks Report 2016 19

Part 1

Individuals and organizations must recognize the imperative to contribute to resilience and must also know what and how
they can contribute. No single entity – public or private – possesses all of the necessary authority, resources, or expertise to
ensure its resilience against catastrophic events. Instead, resilience necessitates collaborative approaches. Public-private
partnerships that harness the core competencies of each sector have a critical role to play in strengthening resilience capacity
and maximizing the benefits of investment in risk monitoring, business continuity planning, and disaster preparedness.
Part 2

Instilling a culture of collaboration will enable effective partnerships before, during and after disasters. For example, in
Germany, the LÜKEX Strategic Crisis Management Exercises conducted every two years by the federal government are
designed to address complex crises and their potential disruptive consequences across sectors through cascading effects.
LÜKEX involves a large partnership between the public and the private sectors to build a culture of crisis management and
trust across multistakeholder partnerships.3

Notes
1
“Resilience” is defined as “the ability of a system, community or society exposed to hazards to resist, absorb, accommodate to and recover from the effects of a
hazard in a timely and efficient manner, including through the preservation and restoration of its essential basic structures and functions.” UN Office for Disaster Risk
Part 3

Reduction (UNISDR) 2009; see http://www.unisdr.org/ we/inform/terminology.

Further information about the GAC on Risk and Resilience can be found at http://www.weforum.org/content/global-agenda-council-risk-resilience-2014-2016-0

2
Chile’s extraordinary comeback has been recently analysed in detail to provide leaders from around the world with concrete lessons they can apply when they face
their own national crisis. See Useem, Kunreuther, and Michel-Kerjan 2015.

3
OECD 2015 http://dx.doi.org/10.1787/9789264249127-en
Part 4

types of jobs new technologies will advancing technology could diminish Conclusions
create and what they may be, it is likely returns to labour and lead to wealth
that more existing categories of jobs accumulating in fewer hands. Every year The Global Risks Report
will be computerized. The US Bureau Excessive inequality lowers aggregate seeks to remind readers of the varied
of Labor Statistics estimates that, by demand and threatens social stability, interconnections between seemingly
2022, 47% of US workers will have a and can increase risks such as diverse global risks. As well as the
high probability of their jobs becoming involuntary migration or terrorism interconnections explored in the
automated.33 Examples include robots caused by violent extremism. Rising three risk clusters above, each nexus
taking over manual tasks in online inequality is also correlated to upticks of risks can also be linked back to
retail stock keeping, healthcare and in security problems, such as violent the new status quo of heightened
diagnostics, and checking in hotel deaths or robbery.35 geopolitical and global security
guests, while knowledge workers in concerns: environmental stresses
non-routine cognitive tasks could be There is a role for public, private and could increasingly see tensions among
displaced by advances in intelligent civil society organizations in building countries over access to water and
algorithms. The entire employment resilience to the risks explored in this land; mass forced migration can
system may have to be re-thought part of the Report. In Box 1.5, the World be both a symptom and a cause of
to facilitate transitions between Economic Forum’s Global Agenda cross-border tensions; and emerging
different types of jobs. Skills in STEM Council (GAC) on Risk and Resilience technologies are set to transform
(science, technology, engineering and shares the results of research on what the international security landscape,
mathematics) are expected to increase makes organizations resilient. alongside many others. The next part
in importance in the medium term, with of this Report turns the focus to how
longer-term needs projected to focus the global security landscape has and
on skills such as creativity, problem- may continue to evolve.
solving and social intelligence.34

Fourth: widening wealth, income

and social inequalities. Access to
technology is likely to exacerbate
income differences within and across
countries, with those who adapt
gaining and those who do not losing
income. Four billion of the planet’s 7
billion people still do not have access
to the internet and may not be able to
gain from technology-driven growth.
Currently the distribution of income is
largely determined by employment:

20 The Global Risks Report 2016

 Part 1
Endnotes 26
IMF 2015a
27
IMF 2015a.
1
“COP21” refers to the 21st session of the Conference of the Parties, also known as 28
World Economic Forum 2015.
the 2015 Paris Climate Conference. 29
Brynjolfsson and McAfee 2011.
2
The risk of interstate conflict has decreased somewhat this year, but remains in the 30
Schwab 2016.
upper right quadrant of the landscape for a second year in a row. In 2014, the two
31
risks were assessed as significantly less important. Manyika et al. 2013. At the same time, the application of some of these technologies

Part 2
3 (nanosats, autonomous drones, cloud and Internet of Things) coupled with machine
Water crises is classified as a societal risk, but it is related to both the environment
learning and artificial intelligence along with fast-improving technologies will create
and society at large.
a step-change improvement in the dynamic decision support capabilities urgently
4
UNESCO 2015. needed by governments, businesses and communities in dealing with the complexities
5
See for example, the United Nations Environment Programme report on ocean and risks associated with the climate-water-energy-food-land nexus at appropriate
acidification (UNEP 2010). spatial and temporal dimensions, particularly in emerging economies and the broader
developing world.
6
http://www.nature.org/newsfeatures/pressreleases/study-over-2-billion-people-
32
affected-global-water-shortages.xml Bundesministerium für Wirtschaft und Energie 2015.
33
7
http://www.worldwatercouncil.org/fileadmin/wwc/Library/WWVision/Chapter2.pdf Frey and Osborne 2013. Carl Benedikt Frey and Michael Osborne of the Oxford
(“The Use of Water Today”, World Water Council – Chapter 2) Martin School, University of Oxford, have estimated that 47% of US jobs are potentially
automatable over the next decade or two.

Part 3
8
Key facts from the Joint Monitoring Programme of the WHO/UNICEF 2015 report
34
are available at http://www.wssinfo.org/fileadmin/user_upload/resources/JMP-2015- Frey and Osborne 2013.
update-key-facts-English.pdf 35
Aitken and Elgar 2011.
9
OECD 2015b.
10
US number:
US National Renewable Energy Lab, part of US DoE http://www.nrel.gov/analysis/
workshops/water_nexus_workshop.html “39% of all freshwater withdrawals
made in the United States is dedicated to the production of electricity through
fossil fuels and nuclear power.” Also “http://www.ncsl.org/research/environment-
and-natural-resources/overview%20ofthewaterenergynexusintheus.aspx”
http://www.ncsl.org/research/environment-and-natural-resources/overview
ofthewaterenergynexusintheus.aspx “41% of freshwater drawn in the United States

Part 4
is for thermoelectric generation.” These figures are necessarily estimates and may
rely on different assumption based on region and /or methodology.
EU number:
European Waters: Current Status and Future Challenges – a Synthesis, European
Environment Agency 2012
Asia number:
Research undertaken by Columbia University Water Centre for the World Economic
Forum Water Initiative Report
11
2030 Water Resources Group. 2009.
12
The UN World Water Development Report (UNESCO 2015) suggests that by
2050, agriculture will need to produce 60% more food globally, and 100% more in
developing countries.
13
UNEP 2002.
14
Many of the world’s cities are on the coast or on the banks of major rivers. The
World Bank and the OECD forecast that average global flood losses in coastal cities
will multiply from US$6 billion per year in 2005 to US$52 billion a year by 2050 with
just the socio-economic costs of floods, such as impact on population and property
value, taken into account. Add in the risks from sea-level rise and sinking land, and
global flood damage for large coastal cities could cost US$1 trillion a year if cities do
not take steps to adapt.
15
In 2010, Amazonia experienced a record-breaking dry year as it did in 2005 (two
1 in 100 year events). In 2009 and 2012, Amazonia experienced the other extreme
with heavy flooding (two 1 in 500 year events). See Nobre and Castilla-Rubio 2012
and Borma, Nobre, and Cardoso 2013.
16
In the context of the discussion on migration and refugees, it is crucial to
differentiate between voluntary and involuntary migration and also the drivers of
migration flows. In the following section we refer only to involuntary migration as
defined by the Global Risks Report (see Appendix A: Description of Global Risks and
Trends 2015).
17
UNHCR 2015b. This estimate comprises internally displaced people, refugees
and asylum seekers. However, the share of refugees in the total population is higher
in 1940, as the population amounted to about 2 billion vs. 7.3 billion today.
18
UNHCR 2015b.
19
Loescher and Milner 2011.
20
UNHCR 2015b.
21
IMF 2015a.
22
Betts et al. 2014.
23
IMF 2015a.
24
IMF 2015c.
25
Dealogic.

The Global Risks Report 2016 21

Part 1

References 1 May 2015. http://www.bloomberg.com/news/articles/2015-05-01/chinese-

consumers-cling-to-saving-suppressing-spending

2030 Water Resources Group. 2009. Charting our Water Future: Economic Schwab, K. 2016. The Impact of the Fourth Industrial Revolution: What Everybody
Frameworks to Inform Decision-Making. 2030 World Water Group. Available at Should Know. Geneva: World Economic Forum.
http://www.mckinsey.com/client_service/sustainability/latest_thinking/charting_our_ UNEP (United Nations Environment Programme). 2002. The World’s International
water_future Freshwater Agreements. Nairobi: UNEP. http://www.unep.org/dewa/Portals/67/pdf/
Betts, A., L. Bloom, J. Kaplan, and N. Omata. 2014. Refugee Economies: Rethinking Ocean_Acidification.pdf
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Popular Assumptions. Oxford, UK: Humanitarian Innovation Project, University of 2010. UNEP Emerging Issues: Environmental Consequences of Ocean
Oxford. Acidification: A Threat to Food Security. Nairobi: UNEP.
Borma, L.S., C. A. Nobre, and M.F. Cardoso. 2013. “Response of the Amazon UNESCO (United Nations Educational, Scientific and Cultural Organization). 2015.
Tropical Forests to Deforestation, Climate, and Extremes, and the Occurrence of The United Nations World Water Development Report: Water for a Sustainable
Drought and Fire”. Climate Vulnerability: Understanding and Addressing Threats World. Paris: UNESCO.
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Environmental Sciences. Elsevier Inc., Academic Press, 153–63. glance. http://www.unhcr.org.my/About_Us-@-Figures_At_A_Glance.aspx
Brynjolfsson, E. and A. McAfee. 2011: Race Against the Machine: How the 2015b. Global Trends 2014: A World at War. Geneva: UNHCR.
Digital Revolution Is Accelerating Innovation, Driving Productivity, and Irreversibly 2015c. South-east Asia Irregular Maritime Movements. http://www.unhcr.
Transforming Employment and the Economy. Lexington MA: Digital Frontier Press. org/554c6a746.html
Bundesministerium für Wirtschaft und Energie, 2015, Industrie 4.0 und Digitale UNISDR (UN Office for Disaster Risk Reduction). 2009. “Terminology”. http://www.
Part 3

Wirtschaft: Impulse für Wachstum, Beschäftigung und Innovation.[Industry 4.0 and unisdr.org/we/inform/terminology
the Digital Economy: Impulses for Growth, Employment and Innovation.] Policy
paper, Berlin. April. Useem, M., H. Kunreuther, and E. Michel-Kerjan. 2015. Leadership Dispatches:
Chile’s Extraordinary Comeback from Disaster. Stanford, CA: Stanford University
Del Carpio, X.V. and M. Wagner. 2015. “The impact of Syrian refugees on the Turkish Press
labor market”. Policy Research Working Paper no. 7402. World Bank. Washington
West, D.M. 2015. “What happens if robots take the jobs? The impact of emerging
DC. August.
technologies on employment and public policy”. Brookings Center for Technology
EEA (European Environment Agency). 2012. European Waters: Current Status and Innovation. October.
Future Challenges: Synthesis. Copenhagen: EEA.
World Economic Forum. 2015.
Elgar, F.J. and N. Aitken. 2011. “Income inequality, trust and homicide in 33
2007. Global Risks 2007: A Global Risk Network Report. Geneva: World
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Enghof, M., B. Hansen, A. Umar, B. Gildestad, M. Owen, and A. Obara. 2010. In 2008. Global Risks 2008: A Global Risk Network Report. Geneva: World
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Search of Protection and Livelihoods: Socio-Economic and Environmental Impacts Economic Forum.
of Dadaab Refugee Camps on Host Communities. September. Nordic Consulting
2009. Global Risks 2009: A Global Risk Network Report. Geneva: World
Group. http://www.ncg.no/novus/upload/file/2010-HostCommunities-Kenya3009.
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pdf
2010. Global Risks 2010: A Global Risk Network Report. Geneva: World
Frey, C. B. and M. A. Osborne. 2013. “The future of employment: How susceptible Economic Forum.
are jobs to computerisation?” Oxford, UK: Oxford Martin School. http://www.
2011. Global Risks 2011: Sixth Edition: An Initiative of the Risk Response
oxfordmartin.ox.ac.uk/publications/view/1314
Network. Geneva: World Economic Forum.
Gibbons-Neff, T. 2015. “Checkpoint: As Russia scopes undersea cables, a shadow 2012. Global Risks 2012: Seventh Edition. Geneva: World Economic Forum.
of the United States’ Cold War past”. The Washington Post, 26 October 2015.
2013. Global Risks 2013: Eighth Edition. Geneva: World Economic Forum.
https://www.washingtonpost.com/news/checkpoint/wp/2015/10/26/as-russia-
2014. Global Risks 2014: Ninth Edition. Geneva: World Economic Forum.
scopes-undersea-cables-a-shadow-of-the-united-states-cold-war-past/
2015a. The Global Competitiveness Report 2015–2016. Geneva: World
IMF (International Monetary Fund). 2015a: Global Financial Stability Report.
Economic Forum.
Washington, DC: IMF.
2015b. Global Risks 2015: 10th Edition. Geneva: World Economic Forum.
2015b. IMF Country Report No.15/115: Jordan. Washington, DC: IMF. http://
www.imf.org/external/pubs/ft/scr/2015/cr15115.pdf
2015c. «Rise in emerging market corporate debt driven by global factors“. IMF
Survey Magazine: Policy, 29 September. http://www.imf.org/external/pubs/ft/
survey/so/2015/POL092915B.htm
2015d. World Economic Outlook, October 2015. Washington, DC: IMF.
Kuner, C. 2011. Regulation of transborder data flows under data protection and
privace law: Past, present and future“. OECD Digital Economy Papers No. 187,
OECD Publishing.
Loescher, G. and J. Milner. 2011. “Responding to protracted refugee situations:
Lessons from a decade of discussion”. Forced Migration Policy Briefing 6, Refugee
Studies Centre, January. http://www.refworld.org/docid/4da83a682.html
Manyika, J., M. Chui, J. Bughin, R., Dobbs, P. BIsson, and A. Marrs. 2013.
Disruptive Technologies: Advances that Will Transform Life, Business, and the Global
Economy. McKinsey Global Institute, McKinsey & Company.
Nobre, C. and J.C. Castilla-Rubio. 2012. “Why we should fear the Amazonia tipping
point”. Agenda, Climate Change Initiatives Blogpost, 29 November 2012. https://
agenda.weforum.org/2012/11/why-we-should-fear-the-amazonian-tipping-point/
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Flows of Personal Data. http://www.oecd.org/sti/ieconomy/
oecdguidelinesontheprotectionofprivacyandtransborderflowsofpersonaldata.htm
2015a. The Changing Face of Strategic Crisis Management. Paris: OECD
Publishing. http://dx.doi.org/10.1787/9789264249127-en
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http://dx.doi.org/10.1787/9789264238169-pt
Roberts, D. 2015. “The Chinese can’t kick their savings habit”. BloombergBusiness,

22 The Global Risks Report 2016

 Part 1
Part 2
Part 3
Part 4

The Global Risks Report 2016 23

Part 1

Part 2:
The international security landscape
is in flux, challenging the assumption
of continued social, political and
economic progress that characterized

The Security the first 25 years after the end of

the Cold War. Transformative shifts
Part 2

in political and economic power

– accelerated by technological

Outlook 2030 innovation, social fragmentation

and demographic shifts – will have
profound ramifications for the
international security order (see Box 2.1
for the Forum’s definition).
Part 3

Box 2.1: International Security

Defined

“International security” refers to the

measures taken by state or non-state
actors, individually or collectively, to
ensure their survival and integrity
against transboundary threats.
Part 4

The Security Outlook 2030 initiative

was launched by the World Economic
Forum in November 2014 (see Box
2.2). This initiative harnessed foresight
methodology to identify the drivers of
future security landscapes and their
implications. Ten multistakeholder
workshops were held in six different
regions of the world, and interviews
were conducted with security experts
and practioners. The process resulted
in the definition of seven drivers and
three scenarios featured in this Report.

The Security Landscape in

Context
The landscape is characterized by two
main phenomena: first is the vacuum
created by frail or weakening states,
which open up space for the rise of
armed non-state actors in the global
security space and create difficult
spillover crises.1 The rise of well-
organized, armed non-state actors
demonstrates a departure from the
traditional Westphalian notion of the
role of the state. This occurs in two

Part 2 was contributed by Espen Barth Eide, Anja

Kaspersen and Isabel de Sola from the World
Economic Forum.

24 The Global Risks Report 2016

 Part 1
Box 2.2: A Deep-Dive into International Security

Geopolitical uncertainty shows no sign of letting up, with new crises cropping up and protracted conflicts spilling over
throughout 2015. It should come as no surprise, therefore, that geopolitical and international security risks are top of mind for

Part 2
executives, leaders and the wider World Economic Forum ecosystem. For three years in a row, The Global Risks Report has
registered the growing concerns of leaders over international security: in 2014 and 2015, geopolitical risks shot to the top of the
most likely and impactful risks. More than ever before, understanding geopolitics and international security is central to
mitigating and building resilience to global risks.

The Forum therefore initiated a year-long, in-depth study to examine current trends and possible driving forces for the future of
international security. Its purpose was to take a fresh look at how we assess international security risks and ensure greater
preparedness. In parallel with the Global Risks Report project, the Forum convened over 250 constituents who could provide
unique insights on international security–related matters from different angles. The project harnessed foresight methodology to
identify the drivers of future security landscapes and their implications.

Part 3
As summarized in Box 2.4, the seven driving forces that emerged from this consultation map closely onto the risks and trends
identified as key by the 2015 Global Risks Perception Survey and discussed in Part 1 of this Report. Based on the findings of the
special consultations on international security, this part of The Global Risks Report surveys the current international security
landscape and points out two phenomena – failing states and strategic competition – that are transforming geopolitical and
international security affairs. It also puts forward three scenarios for the international security landscape to 2030.

By drawing out the drivers and risks, the Forum aims to inform discussions among a broad range of stakeholders on the
international security challenges of the future. This dialogue should ultimately be able to bring an agenda to the institutions

Part 4
empowered to take measures to defuse existing and emerging conflicts, and help to identify shared interests, build confidence
and drive policy on a global scale.

ways: they position themselves as an of the 1990s and the 2000s were by war and related distress, and the
alternative to traditional state-based perceived to be “asymmetrical”, with numbers keep growing.4 Deaths from
governance structures, as a “non-state technologically inferior but innovative terrorism are also on the rise; in 2014
state”, and they challenge the state adversaries challenging government alone more than 32,000 people were
monopoly of violence.2 security forces. killed in terrorist attacks in 93
countries.5 The indirect costs of both
Second is the return of strategic Although this phenomenon persists, trends, not only the human cost, are
competition between strong states we are now witnessing the rise of significant.
with conflicting interests. The two hybrid conflicts – situations where
phenomena may seem contradictory both classical and asymmetric threats In some parts of the world, states
but are in fact related: when instability coexist and reinforce each other. States themselves direct violence against
leads to the breakdown of existing and armed non-state actors learn from citizens, or support terrorist activities
orders, openings are created that each other. Innovative combinations abroad, in order to attain and promote
regional or global powers may seek of conventional low-tech and novel their own security objectives. In these
to exploit to improve their positions. high-tech tactics create unpredictable cases the state becomes the driver of
Likewise, competition between states dynamics. The modern “battlefield” insecurity, rather than the guarantor of
may impede effective responses by blurs the distinction between zones of peace and stability, leading to a further
global institutions to crises or problems, war and zones of peace, as well as that erosion of trust and confidence of
which then fester and worsen. Indeed, between legitimate combatants, non- citizens, violations of human rights, and
the confluence of weak states and traditional adversaries and civilians. It increased pressure on neighbouring
competitive strong states has created is hard to measure the impact of war, states who may be forced to absorb
security threats outside the mandates but conservative estimates suggest refugees or – either explicitly or
and capabilities of most international that, in 2014, around 180,000 people inadvertently – find themselves
security arrangements and institutions. were killed in 42 armed conflicts around harbouring insurgent groups.
The fragmentation of states was the world3. Indirect deaths and costs
the principal security concern in the caused by war-related malnutrition, The competition for influence between
period after the end of the Cold War. displacements, trauma, disease and great powers of today resembles the
In contrast to the tense but stable preventable illnesses raise the toll Cold War period, but with important
superpower standoff that ended with even higher. Today more than 6 million differences.6 Today’s world is more
the fall of the Berlin Wall, the conflicts people have been forcibly displaced multilayered than multipolar: states are

The Global Risks Report 2016 25

Part 1

A Tour of the Current International gains made by US-led coalition forces

Frail States Security Landscape over the past decade have been lost
to resurgent Taliban and al-Qaeda
The phenomena shaping the fighters.
international security landscape are
well illustrated by the challenge of The spillovers from weakening states
Part 2

Daesh, or the self-proclaimed Islamic are affecting other regions. Violent and
State in Syria (ISIS). Although the extremist groups are also at work in
territory it controls lies in Syria and parts of the Sahel, northern Nigeria, the
Iraq, Daesh has recruited fighters Horn of Africa, the African Great Lakes
from over 100 countries – partly area and the Central African Republic.
through advanced marketing using At the time of writing, other countries
popular social media platforms.7 In its too are facing political tensions leading
recruitment strategy, Daesh exploits to violence. Burundi faces worrisome
the resentment and disillusionment political tensions, which raises the risk
of young people, offering jihadism as of further severe civil unrest and inter-
Part 3

an exciting anti-establishment cause. ethnic violence. Elsewhere in Africa,

It also has local roots – including, it is economic growth continues despite
assumed, some forces of Saddam serious security and social problems.
Hussein’s regime demobilized after Properly managing the demographic
the 2003 invasion of Iraq as well as youth bulge in Africa will be critical for
under pressure not just from outside, individual wealthy regional sponsors. security outcomes, implying major
challenged by their own citizens, as investments in skills building and job
discussed in Part 3 of this Report. Many countries are engaged in the creation.
Leaders may consequently delay fight against Daesh: recent terrorist
dealing with risks emerging from Latin America likewise faces
Part 4

attacks from Ankara to Beirut, Tunis

the reconfiguration of international and Paris, with copycat attacks in other governance challenges, with organized
relations, and ideology is no longer a far corners, illustrate how the battlefield criminal gangs gaining influence over
primary driving force. Strong, weak- has become globalized. There are no many aspects of society in various
willed states are challenged by smaller, simple ways to defeat Daesh. It will not countries, as a steady stream of drugs
strong-willed players, shifting the be defeated as long as civil war rages continue to flow from the region into
traditional notions of balance of power. in Syria – and civil war will continue to the United States, Europe and Africa.
rage in Syria for as long as the powers Latin America is at a crossroads.10
The current geopolitical and that could end it disagree about The combination of slower growth
international security context, as what the endgame should be. Daesh prospects, increasing social unrest
demonstrated in this Report, makes is banking on the inability of major and political instability combined with
clear that chronic and resurgent regional and global powers to set aside high levels of violent crime pose serious
violence, conflicts, and economic and their differences and pragmatically security challenges for the region.
social volatility will remain prominent find a political settlement that all Several processes are underway in
features of the current and future order to foster a region-wide security
would prefer to the status quo. So far,
reality. The rising flows of people on the dialogue and establish cooperation
despite laudable recent attempts to
move as a result of greater insecurities mechanisms to address growing
build a common front, this calculation
represent only one of the symptoms of criminality, violence and insecurity.11
of diplomatic inefficacy seems well-
a deep-rooted and protracted systemic
founded.
governance crisis, underlining the Strategic competition between states
need for a transformative shift in how is raising the stakes. In the South and
Military solutions, however, can go
international affairs are managed. East China Seas, territorial disputes are
only so far.8 Aerial bombardment
without a coherent strategy for long- far from resolved. Growing economic
With each passing year, it also interdependence in a region lacking
becomes clearer that many actors term stability may merely extend the
vacuum in which terrorist groups commensurate security architectures
are no longer aligned to a status increases anxieties about the region’s
quo defined by a selective United can thrive. Daesh also needs to be
suffocated socially and economically. ability to peacefully manage a potential
Nations (UN) Security Council. The
And to prevent it – or something like misstep or overreach by one of the
assumption that shared values are
it – appearing again in another guise, players. The key question here is how
a necessary basis for regional or
its appeal to significant numbers of the region – and the wider world –
multilateral arrangements may give way
young men and women all over the relates to China’s rise, and indeed how
to alliances and arrangements defined
world needs to be understood and China itself adapts its own policies
by shared interests. With dwindling
undermined.9 as it emerges into one of the primary
institutions of global governance, there
centres of political and economic
is a growing role for public-private
In the meantime, the situation in might. A major transformation is
collaboration to tackle global security
Afghanistan and its neighbourhood is underway in China’s armed forces,
challenges (see Box 2.3).
regressing as security and territorial emphasizing expeditionary, air,

26 The Global Risks Report 2016

 Part 1
risks causing discord between the
United States and the rest of the world,
Box 2.3: Public-Private Collaboration in Complex Crises its allies included.

We have entered a new era, and it is not a peaceful one. Emerging conflicts and As an energy power, and possessing
long-term violence are seriously impacting people, social fabrics and political the world’s second largest arsenal

Part 2
systems. There has been a rise in de-structured conflicts and violence – often of nuclear weapons, Russia will
fought in densely populated urban areas – and international humanitarian law is continue to play an assertive role
repeatedly and systematically violated. in the geopolitical order. Following
the annexation of Crimea, there is
The lines between conflict and non-conflict zones are increasingly blurred, with no clear political solution in sight to
pockets of vulnerability coexisting with pockets of progress. The lines are also the continuing tensions in eastern
blurred between criminal, inter-communal and politically motivated violence. More Ukraine. EU-US sanctions combined
refugees and internally displaced persons are forced to flee for longer periods of with the low price of oil have hurt
time. Conflicts, mismanaged migration, poor governance and corruption are Russia’s economy, but have so far
eroding gains from economic growth and development, affecting both low- and not achieved the desired policy shift.

Part 3
middle-income countries. Other great powers’ desire to contain
Russia collides with the desire for
New models of public-private collaboration need to be promoted to support, cooperation against the threat of
finance and deliver immediate assistance and alleviate long-term needs, with Daesh. Russia’s future hangs in the
business collaborating closely with frontline responders on responsible investment balance between modernization and
to strengthen state and societal resilience. reliance on raw materials exports, with
the current leadership increasingly
looking East for politico-economic ties.
Western countries, having reduced
maritime and space technologies over frailty of intergovernmental structures. their investments in defence and being

Part 4
its traditional emphasis on the Army Insularity, xenophobia and right-wing preoccupied with internal concerns,
and the defence of the home turf. populism are gaining ground across may find that they lack the resources
The further development of a security the continent, calling into question the and will to implement their long-term
mitigation apparatus that has its core integration process and a common strategic objectives.12
in the Association of South-East Asian European front on international security
Nations (ASEAN), but which has an policies. If Europe proves unable to Trust is waning in the capacity of
even broader reach through its regional find common solutions to today’s existing multilateral mechanisms
cooperative framework, is of particular pressing challenges, we might see to resolve potential flashpoints. In
importance. For instance, the evolving a de-integration process unravelling their current form, global institutions
ASEAN Code of Conduct for maritime achievements such as the Schengen such as the UN retain their relevance
disputes, while not attempting to solve passport-free zone, the common as meeting places, but they do
the underlying competing claims, is an currency, or even the Single Market. not necessarily have the capacity
attempt to avoid escalation into conflict. While still unlikely to happen, such a and credibility to effectively uphold
process could hardly be expected to peace and security. The UN was
As illustrated by its new security be harmonious and peaceful. designed for a very different world.
legislation and the long-standing The UN-centric intergovernmental
debate about revising Article 9 of its Meanwhile, the role of the United “contract” needs a significant overhaul
constitution, thus allowing for a larger States in international security remains if it is to successfully mitigate the
military role abroad, Japan’s security a source of uncertainty and contention. challenges and threats currently facing
posture is evolving, potentially allowing Many question whether or not the international security.
for a more assertive Japan in regional United States has the will and the
and international security frameworks. means to remain the world´s dominant The Geo-Economics of International
India, while currently occupied with superpower, and whether or not it can Security
pressing domestic issues of internal uphold a Western, liberal agenda for
conflict and social inequality, is also a the entire international system. Recent International economic relations,
key actor to watch as the Asian security attempts to design an American foreign international security and geopolitics
landscape adapts to a post-Western policy based on alliances, norms and are closely related. When relations
world. international cooperation rather than between states are harmonious, trade
unilateralism cannot be secured by and investment patterns are typically
Europe has remained united over the United States alone but require driven by economic considerations.
the Ukraine crisis, despite initially that other key actors also engage in However, in times of tense relations
struggling to deploy sanctions upholding international order. The role
between states, politics may trump
against Russia because of its strong played by the US Congress in how
economics – for instance, through
links in energy and finance. An ever the United States is perceived on the
the introduction of sanctions against
bigger challenge is presented by world stage and the growing domestic
adversaries or preferable treatment for
the refugee crisis, a clear testament polarization weakens the predictability
political allies.
to the loss of state control and the of the country as a global actor – which

The Global Risks Report 2016 27

Part 1

After decades of rapid globalization, the Driving Forces and of people or sophisticated equipment,
current geopolitical landscape shows such as nuclear weapons, effectively
some signs of returning to politics Amplifiers available only to states. With the Fourth
dominating economics. The economic Industrial Revolution,18 large-scale
growth spurred by globalization has The Forum’s year-long consultations damage is possible for small groups
shifted the balance of economic power, on international security identified and even individuals working from
seven key driving forces of change in
Part 2

leading to renewed great power rivalry home computers or labs. Existing tools
and global insecurities. New alliances the international security landscape to prevent the escalation of disputes –
are playing out in trade agreements, (see Box 2.4). They are highly treaties, conventions, or doctrines such
strategic infrastructure projects, new interconnected, each interacting with as “mutually assured destruction” – are
investment banks, and arrangements and affecting the others. From the of questionable use when destructive
governing the internet and cross- seven, two stand out as warranting capacity is no longer limited to a
border data flows and storage – more detailed discussion: technological handful of entities with broadly similar
increasingly a source of tension, as innovation and natural resources and resources, tactics and interests in
seen with the annulment of the Safe climate management. They are not preventing escalation.
Harbour Act agreement.13 only drivers in their own right, but also
Part 3

significant amplifiers of the others. The internet has opened a new frontier
Economic policies are increasingly in warfare: everything is networked and
“weaponized”, and not only through Technological Innovation and anything networked can be
sanctions. Tools that were taken for International Security hacked.19 The “dark net” has become a
granted in the era of globalization trading place fuelling insecurity. Every
– such as access to raw materials From longbows to gunpowder, nuclear future conflict will have a cyber element,
and technology underlying financial weapons, airplanes and drones, the and some may be fought entirely
transactions – may become politically history of international security is also in cyberspace. Given that attack is
restricted, posing new risks for the history of technological innovation,16 easier than defence in cyberspace,
industries that rely on free and open and the history of humanity is defined this will dramatically change how the
Part 4

markets for access to technology, by war, and war by the people entire security apparatus prepares for
materials and customers. Businesses who fight it and how they fight it.17 potential breaches. Physical distance
may find more and more obstructions The Fourth Industrial Revolution no longer offers protection; many
as a result of anxieties around trade, will profoundly affect our security, technologies are dual-use; much
technology transfer and intellectual physically and virtually. Previous critical infrastructure is privately owned;
property, calling into question the industrial revolutions have advanced and attacks are easy to disguise given
reliability of global supply chains, human development but they also the challenges of attribution. Social
industrial partnerships and cross- precipitated violent transfers of power. media is already a significant tool in
holdings.14 Technological innovation will continue hybrid warfare,20 offering a new means
to influence how conflicts arise, who for all sides to a conflict to conduct
Civil wars and terrorism can disturb fights them, where they are fought and cy-ops and psy-ops,21 including scare
the flow of goods and services, with how they are settled. tactics, recruitment and fundraising.22
the interconnectedness of the global
economy magnifying the impact. Some ways in which new technologies The seabed and space are both also
Ninety percent of traded goods travel will impact international security in likely to become increasingly militarized,
by sea, often through stretches of water the coming 15 years can already be as more and more actors – state
in Asia and Africa that are increasingly anticipated: for example, improved and commercial – have gained the
part of territorial disputes or targets capacity to 3D-print weapons from ability to send up satellites or mobilize
of piracy: the Suez Canal, the Strait of digital templates and new possibilities unmanned underwater vehicles
Malacca, the Gulf of Guinea and the for biological and chemical weapons. capable of disrupting fibre-optic
Strait of Hormuz – thoroughfares for However, technologies are fusing cables and satellite traffic. Off-the-shelf
trade, energy transport and supplies – in increasingly unpredictable ways, quadcopter drones are already being
are all surrounded by violent and potential nefarious uses are used by gangs to spy on and attack
conflicts.15 Air transport costs are not always immediately apparent. rivals. Autonomous weapons, capable
increasing because of heightened Even if they were, innovation quickly of identifying targets and deciding to
travel security procedures and the outpaces the capacity for regulatory open fire without human intervention,
need to avoid overflying conflict oversight. Breakthroughs in a range will become increasingly feasible,
areas. As discussed in Part 3 of this of technologies – from robotics to challenging the laws of war.
Report, epidemics can also threaten nanotechnology, artificial intelligence,
international security, with the recent genome sequencing, human
Ebola crisis a reminder of potential advancements or meta materials –
vulnerabilities. could destabilize security and shift
balances of power.

Until recently, the ability to inflict large-

scale damage required either armies

28 The Global Risks Report 2016

 Part 1
Box 2.4: The Seven Driving Forces of International Security

Technological innovation: Emerging technologies create challenges, but also opportunities to solve them.

Part 2
Resources, climate management and security: Tensions are raised by growing competition over access to resources
including energy, water and food.

Efficient governance: Corruption and lack of transparency or rule of law limits the progress of development and destabilizes
societies.

Geo-strategic competition: Shifts in economic and political power and weakened mutual trust lead great powers to compete
for influence, often creating competing spheres of influence.

Demographic shifts: Countries may struggle with bulges of youth or elderly populations, or with rapid influxes of migrants.

Part 3
Social cohesion and trust: Fuelled by inequality, feelings of social exclusion, mistrust and marginalization threaten social
stability.

Hybrid and asymmetric threats: More complex threats, indistinct adversaries and “black swans” are arising from a more
interconnected world.

Part 4
Technological
innovation

Resources,
Hybrid and climate
asymmetric management
threats and
security

Social cohesion Efficient

and trust governance

Demographic Geo-strategic
shifts competition

The Global Risks Report 2016 29

Part 1

Natural Resources, Climate Change with poverty, fragility and ineffective additional grievance on which to build
and International Security governance. their narratives, finding new recruits
among those made destitute.
Climate change is expected to amplify The likely impact of climate change
existing security problems and create on food security, explored in depth in Stresses on water and food could
new ones. As explored in Part 1, the Part 3, is another channel of impact on contribute to rising tensions among
Part 2

world will increasingly feel its effects: the international security landscape. states. Trade may be interrupted by
extreme weather events including As wells dry up, crops and fisheries the hoarding of commodities, local
prolonged high temperatures and fail, and people lose their livelihoods, populations can object to foreign
droughts, freak storms and floods, and simmering tensions between social control of arable land, and arguments
rising sea levels threatening coastal groups are more likely to boil over into may erupt over rights to draw water
cities and island countries are expected community violence. Armed non-state from rivers and aquifers that cross
to occur more frequently and at greater actors, including insurgencies and borders.
scale, touching many countries, terrorist groups, will be able to leverage
especially those already grappling this new source of insecurity as an
Part 3

Box 2.5: Scenarios Methodology

What are the most pressing issues leaders should address? What trends are driving transformations? To be as prepared as
possible for the future, leaders need to think broadly and consider the worst that could happen.

Strategic foresight enables assessments of what the future context might look like through carefully researched and validated
scenarios. Scenarios extrapolate existing trends to provide insights that can inform more robust decision-making. The three
Part 4

scenarios presented here (Figure 2.5.1) describe how the seven driving forces of international security could interact and how
prominent actors might respond. The collaborative process of developing and using scenarios can generate the relationships
necessary to drive change.

During a year-long initiative, launched at the Annual Meeting in 2015,1 over 250 members of the World Economic Forum’s
network participated in consultations to build the scenarios. To ensure a broad perspective, our team conducted 10 workshops
in six regions, with participants from government, the security sector, academia, civil society, youth, and the business sector,
which together comprised 41% of the total number of participants (see Figure in the Acknowledgements section). A full list of
contributors is included in the Acknowledgements.

Note
1
Eide and Kaspersen 2015c.

Figure 2.5.1: Illustrations of the Scenarios

Walled cities Strong regions War and peace

30 The Global Risks Report 2016

 Part 1
Interstate tensions are also likely to be even clean air become increasingly against strained security forces.
stoked by an increase in migration into commoditized and traded between Overwhelmed by internal threats,
countries less affected by the changing those who can afford them. With states double down on internal
climate. Environmental stresses will economic and political elites feeling security issues and disengage from
accelerate migration across borders ever more identical and distant from multilateral collaboration, reducing the
and also to cities, putting additional citizens, states lose their ability to effectiveness of global institutions and

Part 2
stress on urban infrastructure in many bring people together around a shared mechanisms.
countries. Cities will need to find new narrative or identity. Trust is eroded, as
tools and policies to manage security is the social contract between citizens In some areas, lines between states
risks. and government. and violent non-state actors blur.
Terrorist or criminal groups, often in
The vitality of many states is challenged opaque alliances, seize control of more
Security Outlook 2030: by demographic trends. In some territories and run them like states,
regions, large youth populations come threatening nations and even regions
Three Alternative of age with few opportunities for stable, with collapse. The corridor between
Scenarios well-paid employment. In other regions, South America and Mexico, Iraq and

Part 3
the demographic bulge is of the elderly, the Levant, and swathes of West and
The potential for rapid and radical creating ever greater needs for finance Central Africa are among the areas now
change, even though the form it for pensions and healthcare; this puts under pressure from combinations of
takes is unknown, raises fundamental pressure on declining working-age civil wars, humanitarian crises, violent
questions about planning and populations and limits the resources extremist activity, crime and gangs.
preparedness. In this section, three available for states to address security
scenarios describe potential evolutions issues. More and more frequently, legitimate
of the international security landscape non-state actors and organizations fill
to 2030 (see Box 2.5 for a description Social cohesion is further weakened some of the spaces left by weakened

Part 4
of the methodology used). These are by mass migration, as youth seek national governments, often with
not intended to be predictions, but economic opportunities and social support. Companies and private
plausible trajectories that can usefully humanitarian or environmental charities fill the void and manage what
challenge current thinking and serve as catastrophes displace people. In the were once public services. With their
a call to action for the development of absence of narratives that foster a operations located near desperate
more adaptable and resilient response shared identity and common cause, communities, many companies are
systems. mismanaged migration flows and poor drawn into addressing the social
integration of migrant communities consequences of insecurity and
Future 1: Walled Cities create tensions. Anxiety over migration violence. Eroding state power also
fuels the rise of extremist, xenophobic increases city power, with cities coming
As greater penetration of information and ethno-nationalist political to be regarded as the most practical,
and communications technology parties that advocate for a return of functional unit of governance.24
broadens the horizons of citizens in authoritarian government and national
many countries, raising expectations identities based on culture, ethnicity or The world divides into islands of
in areas such as health, education, religion, effectively exploiting narratives order in a sea of disorder. As large
infrastructure and quality of of “us” vs. “them”. numbers of people are displaced
governance. At the same time, fiscal by environmental change and
challenges are reducing governments’ As younger populations spend more social violence, still-functioning
ability to meet citizens’ expectations of their lives online, they fill the need states seek to protect themselves,
– and citizens become disillusioned for shared narratives and a sense of often deploying private military and
by their exposure to public sector community with like-minded people, intelligence apparatus to minimize risks
corruption, poor service delivery and sometimes in faraway geographies. of involvement in protracted conflict.
ineffective institutions. Meanwhile, millions of children are In this scenario, by 2030 the world
coming of age in refugee camps, resembles medieval times, when the
This scenario foresees widening often under duress, and with no citizens of thriving cities built walls
inequalities of wealth, income, natural sense of belonging. Rootless around them to protect themselves
health, environment and opportunity and disillusioned, often traumatized from the lawless chaos outside.
continuing to pull communities apart. by growing up amid civil wars or
In wealthier nations, the middle classes community violence, more young Future 2: Strong Regions
are hollowed out by declining wages people become anti-system and
and dwindling public goods. Those vulnerable to recruitment by violent An alternative scenario envisages the
who can afford it are increasingly groups or gangs. volatile and competitive interregnum
retreating to gated communities and paving the way for the emergence of a
turning to the private sector for what Insurgencies, terrorist groups, and stable world by 2030 with several seats
were once public services, divorcing criminal organizations all exploit of power.
their interests from the common the security deficit, leveraging new
good.23 Fertile soil, fresh water and technologies to strengthen their hands

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Part 1

In this future, as wealth accumulates public services through big data to allies or relevant players, rather than at
in the South and East, more players win popular support.25 Climate change the global level.
are able to make strategic economic is another example: as its effects
investments in diplomacy, critical become clearer, states increasingly Inevitably, there are losses for the
technologies and infrastructures. The shift attention from cumbersome global global economy: geopolitical interests
balance of power adjusts, creating a efforts to more functional regional take predominance over economic
Part 2

new order of mostly regionally based ones. The goal of saving all humanity ones, with corresponding inefficiencies
spheres of influence and interests from catastrophic climate change gives as globalization goes into reverse.
that are generally accepted, as are way to states and regions working However, with the revolution in
newly evolved norms of engagement together to adapt and protect “their manufacturing and automation making
over political disputes and shared own” citizens. it possible to produce goods closer to
resources. the consumer, there is less need for
With bad memories of recent foreign global trade in goods and less need
Far from their power being eroded, interventions and increasing domestic to outsource production to low-wage
states in this world are strong – at polarization over foreign affairs, the countries. Companies must make
times authoritarian. Strong leaders rise United States refocuses its priorities costly and complex arrangements to
Part 3

to power on promises to refocus on and abandons its ambition to be the be able to operate across regions; in
narrowly defined national interests, with centre of the global stage, allowing many cases, abandoning international
minimum diversity and high solidarity others to fill the void on major political strategies, localizing or breaking up into
for citizens. Narratives recalling issues. China’s “peaceful rising” no smaller regional entities, prove to be
(imagined) past glories and comforting longer raises apprehensions among more effective strategies.
homogeneity of ethnicity and creed other powers; its prominence in East
become a strategy to compensate Asia becomes an accepted fact.
for the uncertainty of the future. As ASEAN goes into a comfortable orbit Future 3: War and Peace
in the 1930s, leaders persuade their around its giant neighbour, while
citizens to “escape from freedom”: Japan focuses on maintaining good The final scenario envisages the world
Part 4

these leaders strictly control borders, trade relations. The United States and drifting into a major conflict during the
forcefully curb migration, invest more China mutually accept their economic next 15 years, which ultimately leads to
in military and police, and persuade relevance and shared roles and a reworking of the global system.
people to accept mass surveillance responsibilities in a new world order.
as the only way to be protected from In this future, established powers
deadly threats. Sweeping aside any last resistance, remain in denial about the major
Russia consolidates its sphere of shifts of economic, demographic and
Overwhelmed by mistrust among influence in Central Europe and political power that have taken place.
states, governments invest their Eurasia. Europe – having rebuilt its Growing strategic competition between
political, financial and diplomatic capital economic partnership with Russia states erodes their trust in each
in bilateral and regional processes. and consolidated links with the United other, and therefore their capacity to
Effective regional powers emerge, States – develops several levels of collaboratively resolve disagreements
as do new alliances of convenience integration and remains functional as about the role of certain countries in
where shared interests transcend a coherent regional trade bloc. Latin certain regions: for example, the United
the regional perimeter. Global America and the Caribbean leverage States in the Asia-Pacific; Russia in
governance mechanisms continue their abundant resources and strategic Central Asia; and China in South-East
to lose credibility. New forms of location to consolidate into a regional Asia.
cooperation initially run in parallel with bloc. The push for African integration
the established global architecture, continues apace, with two sub- Meaningful progress slows on issues
gradually taking over roles including regional integration blocs emerging such as climate change, with global
development, trade, finance, security as twin poles of influence. Following solutions blocked by states that
and the internet. Counterintuitively, this years of fruitless proxy conflicts in the calculate that taking action would
proves to reduce competition between Middle East and North Africa, two be too problematic domestically, or
states: with contentious issues taken carefully balanced security alliances of that they could gain from new lands
off the global table, states are able functioning states restore some degree becoming suitable for crop production
to rebuild enough trust to maintain of order to the region. or resource exploitation. There is no
stability at the international level. longer consensus over the normative
Fifteen years into the future, this foundations or rules of the international
For example, in this world cyberspace balance of regions and alliances is system, which is not able to manage
is neither open nor global. States only beginning to consolidate as a new the rising tensions.
establish further controls over the global order. Former rivals and enemies
internet, sometimes in collaboration are tempted to test the boundaries, With stagnant growth and the rise of
with allies, building their own leading to strong pushbacks and isolationist movements in established
capabilities in data storage, search, reconfirmations from regional powers powers, space opens up for emerging
and infrastructure – and using security that the new order is here to stay. powers to test the status quo.
threats and the promise of better Security issues are handled by regional Meanwhile, internal pressures grow

32 The Global Risks Report 2016

 Part 1
in many countries: to varying extents, of these norms are looked after by us back to the purpose of this Report:
social turmoil erupts as emerging multistakeholder organizations, rather to cast new light on decisions that need
technologies put many people out than intergovernmental organizations. to be taken today. The following set of
of work and extreme weather events Civil society and business leaders recommendations is intended to aid in
overwhelm the responsive capacity take on management roles in global envisaging possible futures and to help
of governments. In some countries, arrangements. Other areas previously change control the trajectory we are on

Part 2
upheavals feed into virulent nationalism, of interest to global governance and improve the outcome.
drawing on historical grievances institutions, from human rights and free
against powerful neighbours. trade to international development and Overhauling the Social Contract
control of the internet, are set aside
Eventually, in this scenario, a major as non-essential to the basic aim of Above all, these three scenarios point
conflict erupts between two leading preventing conflicts. The UN nominally to the need to overhaul the social
powers. One state experiences retains a peacekeeping function in contract between citizen and state.
a massive cyberattack on critical protracted conflicts, but is not able Re-establishing trust in governance,
infrastructure, causing loss of life. It to regulate relations between leading improving the accountability of
accuses another state of complicity, states. institutions and leaders, reducing

Part 3
and launches a conventional attack in social and economic divergences and
retaliation. Denying any involvement, The result is a stripped-down global delivering better services should be
the second state considers it has been system in which the liberal ideals of top objectives for policy-makers. In
attacked without cause. Outraged freedom, democracy, justice and these areas,26 technology is not only
populations on both sides demand equality are no longer put forward as a potential disruptor but also a key
further action; nervous leaders a paradigm to which all should aspire. enabler.
seek to shore up their positions A new entente emerges on respect for
and miscalculate the gravity of the differences of political and economic More effective governance alone may
consequences. approach, though this means not suffice, however, without also

Part 4
accepting a degree of entrenched building greater social cohesion. The
Other states are dragged into the global inequality and disintegration, fabric that binds citizens to the state
escalating conflict and forced to and a parcelling up of the global and to each other is fraying. A critical
choose sides. Armed non-state actors commons. Where they can, people and task for the state is to reinforce notions
on both sides seek to leverage the companies move to places that suit of citizenship and narratives of inclusion
conflict for their own ends, forcing the their objectives best. within national discourse, which can
parties to the war not only to fight each pave the way for reconciling political
other, but also to engage in hybrid Implications and and theological differences both
conflicts against third parties. domestically and internationally.
Outcomes
Ultimately, the conflict stops short Rewiring Global Governance
of all-out mutual destruction, but Though none of the three scenarios
not before imposing high costs on presented here will occur exactly as All three scenarios reflect uncertainty
both sides – human, economic, and described, the security landscape around the future role and ability of
infrastructure. The “nuclear taboo” of the future may manifest multiple global governance institutions to
– that states abstain from using the elements from one or more of the deliver on security. In an ideal world,
ultimate weapons, even if they possess scenarios, probably simultaneously. a strong global body would have the
them, still proves to hold true – but Indeed, it can be argued that we have tools and standing to mitigate conflicts
belligerents did begin to prepare for already entered the period of “walled involving either terrorism or competition
their application. There is no clear cities”, as the refugee crisis seems to between great powers, and to contain
victor. In this scenario, the aftermath lead some nations to the reflex reaction and resolve peripheral conflicts. At
of the conflict leads to a sense of of closing borders – both physical and present, however, the multilateral
determination to prevent a repeat political – as described in Part 1. system appears overwhelmed by the
interruption to business as usual. The number and complexity of issues, and
commonly accepted argument is The three scenarios may come across international mechanisms are often
that the lesson to be learned from the as somewhat dystopian, because they fragmented, co-opted or undermined
failure of previous global mechanisms are extrapolations of existing, negative by the special interests of chosen
to mediate conflicts is that those trends. The world does not need to member states.
mechanisms were not only excessively arrive at these dystopias, however. Our
ambitious but also largely ineffective. collective knowledge, connectedness, If states want to strengthen their ability
technological advances and to take collective decisions on key
States set about identifying the social innovations present endless international security matters, they
few basic practicalities that truly opportunities to change the outcome need to improve the efficiency of the
demand global cooperation: norms, and shape a more secure world, multilateral apparatus. Progress on
for example, relating to the seas, given strong leadership and the meaningful reform of the United Nations
air corridors, and finance. Because right decisions being taken at the and the Bretton Woods Institutions to
of their economic relevance, many international level. This last point brings reflect current political and economic

The Global Risks Report 2016 33

Part 1

realities has been slow and unfocused. Promoting Private Sector public tenders may all be contributing
Piecemeal reform of the system itself Engagement towards addressing the drivers of
will not suffice: the choice is between geopolitical instability. Another way
implementing comprehensive reform A strong argument could be made the private sector can contribute is
to create the right mechanisms and for increasing the participation of the through company norms that forbid
responses for future global cooperation private sector as a stakeholder in involvement with corrupt practices; this
Part 2

on security, and allowing the “death international security.27 The implications may, over time, spur better governance
by a thousand cuts” of the global of security risks affect companies and reduce social resentment.
governance system – an outcome that assessing where to invest and do
would not favour international security. business as much as they affect Encouraging New Behaviour
governments engaged in trade,
Fostering Global Leadership diplomacy and maintaining the security Multistakeholder cooperation might
of their citizens. Yet the potential of also be conducive to mitigating the
Today’s world is in clear need of the private sector to contribute to security implications of technological
strong leadership, new compromises, peace and security is not reflected in innovation. Ethical frameworks and
innovative ideas and a capacity for global security mechanisms or at the norms guiding technological innovation
Part 3

long-term thinking. This is not limited multilateral level. could be elaborated between those
to government and international actually involved rather than relying only
organizations but also applies to Businesses often see global security on regulators, which will struggle to
civil society and the business sector. as a risk management and compliance keep up with the pace of change in the
Because power is distributed among issue. Limited understanding of Fourth Industrial Revolution. Likewise,
many sectors, multistakeholder one’s own global, regional and local common understandings about the
cooperation is more important for impact might sometimes even lead to security dimension of an increasingly
tomorrow’s security than ever before. inadvertently reproducing or confirming connected world could involve key
negative patterns in society and private and public stakeholders from
The digital revolution, at times a governance. The traditional business both the emerging technology and
Part 4

source of disruption, can also be a response to geopolitical skirmishes international security spheres.
tool for enhanced transparency – and has been to view them essentially as
transparency, if genuine, offers the intractable externalities: companies Viewing climate change through
potential to rebuild trust. seek to minimize downside risks an international security lens also
while waiting for a crisis to blow suggests several policy options
As suggested by the “strong regions” over. However, in a hyperconnected where multistakeholder action is
scenario, beginning that process at a world, volatility in one place can have critical. These include the search
regional level, with new architectures immediate repercussions on the other for new mechanisms to reflect
that are parallel to the existing side of the globe. Avoiding investment externalities related to resource
international system, could ultimately in known or potentially volatile places scarcity or environmental effects, while
strengthen rather than undermine does not insulate companies from the simultaneously safeguarding social
global stability. impacts of volatility. In today’s world, stability by guaranteeing affordable
companies might be well advised access to the necessities for survival.
Enhancing the Role of Cities to understand their own potential to Public-private partnerships established
influence international developments. to identify technological solutions to
Refocusing some security efforts at improve the efficiency and resilience
the level of the city could be another Many companies are already of food production and water use is
contribution. As urbanization gathers dealing with the root causes of another example.
pace, cities will increasingly rival states insecurity, directly or indirectly. From
as the most natural level of government inefficient governance to corruption, Conclusion: A Call for a
for harnessing technology to deliver environmental degradation, social
public services and security. Cities disparity and unrest in surrounding Resilience Imperative
have also proven their advantages communities, many companies
as sites of innovation, employment have policies in place to protect their If the “new status quo” implies such
creation and higher productivity, interests while also addressing these a high presence of global geopolitical
because they, at times, prove to be drivers of insecurity within their core risks and realignment around interests
more focused on practical problem areas of operations. For example, a rather than values, then a wider range
solving than on the “status and mining company seeking to minimize of stakeholders needs to be involved in
prestige” issues that tend to obscure environmental impacts on local setting the direction of the new global
interstate relations. Devolving resources communities, a telecommunications security paradigm and implementing
from national to municipal levels and company training local workers in solutions.
creating new ways for city leaders the skills they require and thereby
to collaborate on security matters also empowering those workers, and A first step is for private sector leaders
may also be faster than reforming an infrastructure company working to place international security firmly on
established mechanisms for multilateral with local government to improve their radar screen. International security
collaboration among states. quality and transparency around and geopolitical trends are likely to have

34 The Global Risks Report 2016

 Part 1
more influence on the global economy Endnotes
in the future, thus demanding greater
strategic attention from business 1
“Non-state actors” is a term widely used to describe everything from non-for-profit
leaders. With a stronger understanding or commercial providers, non-governmental organizations across all thematics,
community-based organizations and faith-based organizations. Their characteristics
of the issues and their own evolving role include sufficient power to shape and cause change, although they are not part
in the geopolitical and global security of the established institutions of a state and are thus not accountable to the same

Part 2
landscape, the private sector can be standards as a state. In the global security context, however, the term is often used
a constructive partner in addressing to refer to violent, criminal, terrorist and militarized groups or individuals with no ties
to a state or state-like structures but who, through the use of asymmetric strategies
many global security challenges and of warfare, declare war on states and state actors. Non-state actors can also be
mitigating their driving forces. a force of good in terms of their significant role and emphasis on a specific area of
focus, usually on common goods, for the advancement and promotion of issues.
A second step is to have the traditional 2
Williams 2008.
security actors – including international 3
IISS 2015.
organizations and governments – 4
UNHCR 2015.
adjust their own frameworks and 5
Institute for Economics and Peace 2015.
processes to build in more public-

Part 3
6
Kaspersen and Shetler Jones 2015.
private participation at the most 7
See UN Security Council Report S/2015/358, at www.un.org/en/sc/ctc/
appropriate levels. The Extractive docs/2015/N1508457_EN.pdf. Letter dated 19 May 2015 from the Chair of the
Industries Transparency Initiative, action Security Council Committee pursuant to resolutions 1267 (1999) and 1989 (2011)
taken by technological and social concerning Al-Qaida and associated individuals and entities addressed to the
media companies to block terrorist President of the Security Council dated 19th May 2015.

and violent extremist activity, and 8

Kaspersen 2015a.
business alliances for action on climate 9
See Davis, Dusek, and Kaspersen 2015.
change are promising examples of 10
Argueta de Barillas and Cassar 2015.
public-private arrangements that can 11
Vision of Humanity 2015.

Part 4
strengthen security. 12
Stoltenberg 2015.
13
Schwab 2015.
Third, a renewed focus on prevention, 14
Blanke and Kaspersen 2015.
preparedness and resilience, rather
15
George 2013.
than reaction and compliance, would
16
likely improve security actors’ ability to Kaspersen and Hagan 2015.

manage known and unknown security 17

Kaspersen 2015c.
risks. There exists important know-how 18
Eide and Kaspersen 2015b.
and resources in the private sector 19
Eide and Kaspersen 2015a.
that can improve preparedness and 20
Hybrid threats and warfare refers to the blend of conventional, irregular means
mission-critical planning processes in of combat and asymmetric tools, often with a strong cyber element, in military
a global security context – using data strategies facing indistinct adversaries and aggressors in a complex battle domain,
complicating matters such as attribution and retribution.
to track the progress of risk factors,
21
sharing information on where and The term “cy-ops” refers to militarized cyber operations; “psy-ops” refers to
military operations usually aimed at influencing the adversary mindset through
when crimes occur, and establishing noncombative means.
mechanisms for harnessing industry 22
Kaspersen 2015b.
supply chains during complex 23
Nye 2014.
emergencies – are a few examples of 24
Sally 2014.
how security arrangements could be
25
updated. Beckstrom 2014.
26
See also the World Economic Forum 2015b.
Rather than wait for crises to happen, 27
De Sola and Kaspersen 2015.
or sleepwalk into the dystopian
scenarios described above, it is
critical to identify potential inflection
points and focus on finding solutions
rather than just containing problems,
and adapt relevant structures
accordingly. Prompting greater pliability
through a genuine, forward-looking
multistakeholder process in order
to ensure against complacency and
improve the outcomes in a fast-paced
and interconnected world may be the
best way to prevent the described
dystopian futures from materializing.

The Global Risks Report 2016 35

Part 1

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Part 3
Part 4

The Global Risks Report 2016 37

Part 1

Part 3:
The previous sections of this Report
have explored the ways in which global
risks are becoming more imminent,
impacting more people’s lives,

Risks in Focus economies and institutions. This part

of the Report explores the Global Risks
Part 2

Landscape 2016 and the Global Risks

Interconnections Map 2016 through a
societal lens. Because well-functioning
societies are at the core of international
security and are key to strengthening
resilience, this section presents an
in-depth exploration of three distinct
angles that relate to societies: the three
Risks in Focus. To motivate action,
each of the Risks in Focus includes
Part 3

examples of practical initiatives that can

be implemented to build resilience.

One of the key risks related to the

advancing digitization of societies
concerns the tension between
the ways in which technology is
empowering citizens and the growing
sense of political disempowerment
felt by many of those citizens. Rising
Part 4

income disparity and a shortage of

quality employment opportunities –
that could be further exacerbated by
the Fourth Industrial Revolution – along
with extreme weather events and
heightened migration flows are among
the factors that could leave societies
deeply unsettled.

Against this background, the first Risk

in Focus introduces the concept of
the “(dis)empowered citizen” and
discusses potential consequences for
social stability. The second contribution
explores food security – a necessary
condition for social stability – which is
increasingly under threat from failure
to mitigate and adapt to climate
change; this Risk in Focus builds on
the findings of Part 1. Finally, the third
Risk in Focus discusses the potential
of future pandemics to threaten social
cohesion.

The world has navigated previous eras

of profound transitions resulting from
converging economic, technological
and geopolitical developments. But
with a faster pace of change and more
complex interconnections, the stakes
have never been higher.

38 The Global Risks Report 2016

 Part 1
3.1 (Dis)Empowered Citizen positive outcomes will require profound
changes to institutional and policy
frameworks – but as citizens’ demands
become more sophisticated, they also
call into question the capacity and
willingness of political and business

Part 2
leaders to respond.
Social Stability at Risk: spike, associated with the 2011 Arab
Spring. The Global Database of Events, Societal Change Mechanisms under
Analysis Language, and Tone (GDELT) Project Pressure
notes “elevated protest activity of the
Social instability has re-emerged in last three years” in comparison to the Many societies try to channel the
recent years as a prominent concern. previous “two decades of relatively stress associated with societal
As discussed in Part 1, social instability reduced protest action.”1 Its data transformations into constructive
is again the most interconnected suggest we are again approaching dialogue, enabling those affected to be
global risk (see Figure 2), ranking in 1980s protest levels, when causes of and feel heard by their fellow citizens

Part 3
the top 10 over both 18-month and social turmoil ranged from Cold War and those in authority. Common
10-year time horizons (number 5 on tensions and anti-apartheid sentiment mechanisms for individuals to raise
the 10-year time horizon; see Figure to the Tiananmen Square protests. public awareness of issues and ask for
1.1 and number 8 on the 18-month
change include organizing or signing
horizon, not displayed). Profound social Social stability is being challenged by petitions, donating to or joining social
instability additionally ranks among the multiple and profound transformations or political groups, and standing for
three most likely global risks to occur in that affect most countries worldwide. election.
Latin America and the Caribbean and These transformations result from
the Middle East and North Africa (see fast-paced technological progress, However, not all societies have
Figure 3). globalization, wealth and income

Part 4
constructive mechanisms in place to
concentration, shifting demographics, handle appeals for change. Faced with
Although statistics related to social lack of job opportunities and a disquiet over societal transformations,
instability vary – particularly because changing climate. Together they some respond by closing down
the terminology used to describe are creating new opportunities, debate, deliberately or inadvertently
instability fluctuates widely – data expectations and sources of frustration. stifling individuals and groups that
suggest there has been a rise in Social instability is not per se always question existing structures. To some
protests over the past two decades. a negative factor, because it can extent, social stability is in the eye of
As illustrated in Figure 3.1.1, protest drive towards another and potentially the beholder: in some societies, a
intensity has reached a new and better new equilibrium. Ensuring peaceful mass demonstration would
higher plateau since the most recent that these transformations result in be regarded as threatening, subversive
World Protest Intensity
Figure 3.1.1: World Protest Intensity

2.5
World protest intensity score

1.5

0.5

0
1979 Jan

1983 Jan

1988 Jan

1993 Jan

1998 Jan

2003 Jan

2008 Jan

2013 Jan

2015 Jul

Source: Computations and illustration by Kalev Leetaru, 2015, based on the GDELT data set (http://gdeltproject.org/).

Notes:

The World Protest Intensity score is the total number of protest events divided by all events seen that month. The timeline in this figure is created using data collected from
print, broadcast, and web news media worldwide from over 100 languages (http://gdeltproject.org/). The data are normalized for the exponential rise in media coverage of the
past 30 years.

Part 3.1 was contributed by Alexandra Lopoukhine,

Silvia Magnoni and Nicholas Davis, World Economic
Forum.

The Global Risks Report 2016 39

Part 1

and provocative; in others, it would be demands threaten to undermine a models consequently need to adapt
regarded as an example of constructive country’s political stability (see Box to new demands and expectations.
change mechanisms working as they 3.1.1 for a definition of (dis)empowered Increasingly customers want to know
should. citizen). With more (dis)empowered not only about a business’s own
citizens organizing and mobilizing, performance in areas such as child
It is not clashing attitudes per se governments and businesses alike labour and environmental impact, but
Part 2

that cause social instability – there need to come to terms with the ways also about the operations of its entire
will always be citizens demanding in which they may be exacerbating supply chain. They expect to have a
change. Rather, social instability can the root causes of citizen discontent. voice in all aspects of its operations,
emerge when transforming attitudes They must understand the risks and from how production processes are set
come up against institutions that work out how to adjust to a changing up to how distribution operations are
are unsuccessful in their struggle to operating environment and a new developed and investment decisions
peacefully incorporate them into the societal landscape. around community initiatives are taken.
broader social and political context.
Around the world, trust in institutions is Beyond economic uncertainty, Drivers of (Dis)Empowerment
plummeting. The most recent edition the risks for countries include:
Part 3

of the Edelman Trust Barometer found (1) undermined legitimacy of the Social structures around the world
that in a higher proportion of the government mandate; (2) increased are being transformed on three levels.
surveyed countries than ever before in social polarization; (3) political impasse First, at the individual level there are
the barometer’s 15 year history, people and the impossibility of actuating changes in how people feel and how
were distrustful of both governments reforms, where relevant; and – they perceive the world and identify
and businesses. Even NGOs are not under more severe circumstances with particular values; this is combined
immune – although they still command – (4) possible disintegration of a with people’s increased ability to
more trust than the public or private country’s governmental system and express and transmit their views, which
sector, the 2015 Edelman Trust study other cascading risks that might in turn influences behaviour. Second,
showed a declining sense of trust in easily emerge in a truly globalized, at a collective level, rapid changes in
Part 4

those entities, too.2 interconnected and complex world. how social groups form and solidify
An inclusive society with empowered have taken place, and in how these
Social Stability at Risk societal actors who are aligned behind groups debate and develop common
a joint vision for the country is a values and viewpoints and how they
The global risk of social instability strong signal that a state is stable and interact with other stakeholders. Third,
is heightened by uncertainty about confident, with greater transparency, often driven by and in response to the
whether existing structures will be able lower corruption and a stronger rule individual and collective levels, formal
to constructively resolve pressures of law – all important factors for doing institutions such as governments,
when (dis)empowered citizens’ business.3 businesses, religious institutions, the
media and civil society organizations
From an economic perspective, are also changing the way they relate
businesses benefit from a stable to and interact with both groups and
Box 3.1.1: The (Dis) social and political environment for individuals.
Empowered Citizen: A running their operations. They operate
according to forecasts and scenarios These evolving structural forces create
Definition
that factor in socio-political risks, and new patterns of communication,
instability increases their operational relationships, collaboration and
The term “(dis)empowered citizen” expectations, which in turn – in
costs, reduces margins on investments
describes the dynamic that is combination with emerging
and undermines local networks.
emerging from the interplay of two technological, economic, political
Social and political unrest can cause
trends: one empowering, one and environmental drivers – create
losses in revenue, property damage,
disempowering. Individuals feel new structures of empowerment and
roadblocks, bureaucratic delays,
empowered by changes in disempowerment.
overall economic slowdown and an
technology that make it easier for
unconducive business environment.
them to gather information, Economic Drivers
For businesses, more specific risks
communicate and organize. At the Many countries have recently seen
include (1) reputational risk and other
same time, individuals, civil society mobilizations against inequality,
dangers to brands; (2) potential loss of
groups, social movements and local persistent unemployment and
market share; (3) product boycotts; and
communities feel increasingly deteriorating economic environments.
(4) disruption of established business
excluded from meaningful From the Arab Spring to the anti-
models.
participation in traditional decision- austerity protests in Europe,
making processes and people have vocally rejected the
Particular risks to businesses may arise
disempowered in terms of their ability consequences of what they perceive as
when local contexts and relationships
to influence and be heard by a distorted and non-inclusive economic
change when people feel unable to
institutions and sources of power. and political system. Demands for
effect change as citizens and look for
ways to do so as consumers. Business reforms to tackle corruption, in both

40 The Global Risks Report 2016

 Part 1
politics and business, are being heard perceived to be either unable or Repressive Reactions Fuel Social
across the globe. Policies that neglect unwilling to regulate the activities Disruption
or deepen inequality can exacerbate of large corporations, for example
the combination of less sustainable by closing tax loopholes. Political Clear arguments can be made
economic growth, weakened social leadership is seen to be colluding for governments to oppose some
cohesion, and citizens feeling with, or even interchangeable with, citizen movements, such as those
disenfranchised from democratic business leadership, as “revolving that disregard human rights.10 In

Part 2
processes. door” practices shape the relationship most cases, however, many different
between business and government. perspectives on what constitutes the
Environmental Drivers Citizens’ view that their own voices social good can be valid. To establish
Changes in society, regulatory policies are being ignored by political leaders trust and ensure broadly sustainable
and business practices are crucial to is exacerbated – even apparently development, a country’s businesses,
address our changing climate. In recent validated – by the perception that the citizens and government need jointly
years a “climate justice” movement has wealthy enjoy privileged access to to elaborate a common viable national
emerged from frustration with a lack decision-makers.7 vision.
of leadership, evident in international

Part 3
negotiations characterized by long Technological Drivers Rather than looking for ways to win
talks, vested interests and the ultimate Technology amplifies dissatisfaction back public trust, however, many
incapacity to curb the effects of global caused by other drivers. Social governments have eroded that trust
warming, despite progress at the movements are facilitated by digital further by responding harshly to
COP21. Continued sluggish progress tools that allow the individual citizen to protests: closing down space for civil
or a lack of any progress at all will be heard and also allow rapid mass society, demonizing protestors and
increasingly fuel protests, especially mobilization, cyber-activism and harassing activists. In recent years, the
as extreme weather patterns make a globally connected social movements space available for citizens’ actions
progressively greater impact. that span traditional geographic and has shrunk in many countries. The
political boundaries (see Box 3.1.2). CIVICUS Civil Society Watch Report

Part 4
Political Drivers shows that core civil society freedoms
The last three years have seen more While voter participation rates are of expression, association and peaceful
elections and government collapses steadily declining, especially among the assembly were violated to a significant
in major market economies than in young, digital technology is providing degree in at least 96 countries during
all of the previous decade.4 Approval new ways for people to mobilize and 2014.11
ratings of political leaders are sagging, challenge existing power structures to
and established political parties articulate an alternative. This was most Technology is empowering
across Europe are facing declines in visible in the 2011 wave of youth-led governments as much as citizens,
membership and a need to reconsider revolts from North Africa to South notably to employ surveillance tools on
how they engage with the electorate.5 America, but there is general evidence their own populations – and sometimes
Labour unions are not doing any of an increase of citizens’ movements those of other countries. In some
better: although increasing in Asia worldwide in the past couple of cases, governments breach their own
and South America, membership has decades. Studies of online content laws, as with the British intelligence
been declining in Europe and North dating from 2010 and 2012 indicate a agency spying on international NGOs
America, particularly in the United positive relationship between political outside of proper procedures.12
States, where the unionized workforce content and youth who were previously Increasingly laws are being reformed
hit a 97-year low in 2013.6 A proliferation politically disengaged.8 to legitimize data collection and cyber
of alternative political parties – some oversight, such as Canada’s Bill C-51,
of them extremist or nationalist – has Online protests, strikes, cyber activism, which originally called for removing
challenged established governance and online petitioning and boycott barriers to sharing security-related
systems without necessarily delivering campaigns are increasing. For information.
the outcomes hoped for by citizens example, the online activist and petition
in terms of improved transparency network Avaaz.org grew by around Just as protestors are learning
and equality. Indeed, a high turnover 40 million members in eight years, tactics from one another, anti-
of governments or strong separatist and Change.org now has 80 million protest legislation is often inspired
movements can end up making policy- users. Although some cynicism exists by experiences in other countries.
making less stable and worsen distrust around “clicktivism”, which can be seen A growing number of governments
in governance structures. as merely a form of virtue signalling, have implemented similar measures
such web-based activist organizations imposing limits on peaceful assembly
The perceived inability of governments and protest, narrowing the definition
have often complemented online
to respond to major global challenges of what is considered permissible civil
activism with offline activities,9 thereby
– from climate change and internet society and media activity, banning civil
amplifying their impact. As the world
governance to food security – is society organizations from receiving
becomes more connected, mobile and
eroding confidence in authorities. foreign funds for certain activities, and
networked, protests that might once
Combined with a sense of diminishing making new registration inordinately
have been geographically limited can
separation between the private and complex. CIVICUS has drawn attention
spread ever more widely and quickly.
public sectors, governments are to the shrinking space for civil society

The Global Risks Report 2016 41

Part 1

Box 3.1.2: Digital Government Technologies: The (Persisting) Challenges of Inclusiveness and
Engagement

The ability to leverage technology to improve relationships between governments and citizens depends on citizens being able to
Part 2

use that technology. In OECD countries in 2012, for instance, less than a quarter of people aged 65–74 said they interacted
electronically (internet portals, social media) with their government, compared to more than half among the 16–24 age group on
average across the OECD (Figure 3.1.2.1). To fully exploit the potential of digital technologies, governments should take steps to
address existing digital divides and avoid the emergence of new forms of e-exclusion. As well as age, gaps persist in the level of
uptake by education level and living area.

The two main reasons for e-exclusion are lack of physical access and limited technological skills. Therefore, alongside the
development of a well-functioning digital government infrastructure, a crucial component of an effective digital government
strategy is action to increase the population’s ICT literacy, raise awareness of existing online opportunities and boost the
comfort and familiarity of all age groups with the use of digital channels to interact with governments. A multi-channel approach
Part 3

to service delivery, providing services by various offline (e.g. in-person contact, postal mail) and online means (e.g. websites,
mobile-based applications) in an integrated way, is more likely to guarantee access to public services to all citizens.

Figure X: Citizens using the Internet to interact with public authorities by age group (2012)
Figure 3.1.2.1: Citizens Using the Internet to Interact with Public Authorities by Age Group, 2012

16 to 24 years old 65 to 74 years old

90
Part 4

80

70

60

50

40

30

20

10

0
k

nd

en

ay

ds

ia

ce

da

ain

ria

g
ce

ic

nd

lia

ic

ly

ile
ga

ae
an

ar
ar

ni

ur
an

lan

lan

lan

Ita
EC
en

bl

bl
iu

do
ra

Ch
rw

st
an

e
ed

lan

na
ela

ala

Isr
to

Sp

rtu

ng
nm

bo

pu

pu
m

lg

re
nl

st
ov

Au
er

Ire

Po

ng
O
No

Fr

Es
Sw

Ca
er

Be
Ic

Ze
Fi

er

Hu
Po

Au
m

Re

Re
itz
De

Sl

Ki
th

xe
Sw

w
Ne

ak

h
d
Lu

Ne

ec
ite
ov

Cz
Un
Sl

Source: OECD ICT Database; Eurostat Information Society Statistics (database).

Governments can take further steps to use digital channels to foster engagement through the full policy-making cycle. Most
governments still view social media as an additional tool to broadcast traditional communication messages. According to a
recent OECD survey, fewer than one in four governments try to leverage social media for more advanced purposes such as
transforming public service delivery or opening up public policy processes to key stakeholders.1 The 2014 OECD’s
Recommendation of the Council on Digital Government Strategies provides principles for governments to harness new
technologies to increase openness, transparency and inclusiveness of processes and operations, and to foster greater citizen
engagement and empowerment. Government bodies need to identify and support businesses and citizens who can form a
digital government ecosystem that promotes dialogue and exchange.

One important development has been the use of Open Government Data to make public data sets available to citizens to
enable more informed engagement, greater social accountability of government, and opportunities to create public value by
putting information into the hands of citizens. The OECD OUR Data Index assesses governments’ efforts to implement open
data in three critical areas – openness, usefulness and re-usability of government data.2

Notes
1
OECD 2014.
2
OECD 2015; for more on the data, see https://data.oecd.org/.

42 The Global Risks Report 2016

 Part 1
organizations seen lately in autocratic What Can Be Done? New Under pressure to deliver more
regimes, emerging democracies and Approaches and Risk-Resilience proactively and effectively on corporate
democratic countries alike. Strategies social responsibility (CSR), businesses
are going beyond traditional and
In combination with surveillance A range of innovative responses often-criticized CSR models to
practices, such measures are creating by governments, businesses and look for economic opportunities
in socially and environmentally

Part 2
a growing sense of limitation on civil society organizations can build
citizens’ freedom of speech and resilience to the risk of social instability. conscious business models based
freedom of assembly. The Carnegie Just as new technologies are playing on innovative and people-centred
Endowment for International Peace a role in driving the risk, so can they partnership approaches (see Innovative
reported that, in 2014, 50 countries also be used to mitigate it, minimizing Response 2). An example of the recent
placed restrictions on overseas funding the frustration of individuals and emergence of Hybrid Value Chain (HVC)
for NGOs.13 The Committee to Protect groups by creating a transparent and models, representing a complete shift
Journalists has recorded a disturbing inclusive enabling environment with in the way businesses and civil society
number of restrictions of press freedom responsive forms of governance. interact,21 is the Viste Tu Casa (Dress
in many countries.14 The combination This section presents innovative and Your Home) programme in Colombia:

Part 3
of large commercial interests and weak emerging developments that can be an established tile manufacturer
governance can give rise to businesses taken by three different stakeholders: worked with the cofounder of a
being perceived as complicit in governments, businesses and civil human rights organization to create
government repression of civil society society. employment for women and reach
– a perception fuelled by action against new clients by raising awareness of
organizations and activists protesting First, governments have the the hygiene benefits of tiling kitchens.22
against the activities of such large opportunity to re-empower citizens By leveraging the core assets of civil
industries as construction, extractives politically, opening up space for society organizations and businesses,
or agribusiness.15 In Cambodia, for dialogue and participation, embracing HVC partnerships generate risk
example, the government has been transparency and accountability, resilience and new revenue sources

Part 4
criticized for arresting and imprisoning and looking to enlist citizens as for businesses, improve the livelihoods
campaigners against widespread land collaborators in public service.18 of low-income populations and help
grabs that see subsistence farmers to meet the basic human needs of
evicted from the land they farm to make Bland “participation washing” populations with which civil society
way for large-scale industrial farms.16 approaches – described as the works.
attitude of listening to requests but
In many cases, the repression of not actively addressing them – are Third, civil society has the opportunity
citizen movements reflects a profound not enough to truly contribute to more to find ways to leverage new
uncertainty among governments and stable societies. Technology-based technologies and collaboration models
businesses about how to deal with the innovations could offer options to to strengthen social fabric; improve
questioning of established societal, modernize public service management services and shared spaces; make
economic and political structures. and delivery, as happened in the socio-economic frameworks more
Leaders may be unsure of what small Spanish town of Jun, which cohesive and inclusive; and improve
policies to implement, or they may increasingly administers its municipal the ways in which stakeholders interact,
be constrained by internal challenges services and communicates with deliberate and act.
from implementing changes in a timely citizens through Twitter.19 Equally
manner; either situation can result in importantly, the creation of a trust- A source of inspiration for engaging
doing nothing – a response of hoping based space for multistakeholder and empowering citizens could be the
that protests will pass.17 However, any partnerships represents a building “citizen science” movement, in which
kind of failure to respond adequately block for effectively managing scientists have found ways to use
to citizens’ demands merely adds to risks (see Innovative Response digital technologies to engage citizens
their sense of disenfranchisement from 1) and successfully achieving in scientific research activity. Popular
traditional change-making methods. good governance and inclusive platforms, such as Zooniverse,23
development.20 The effectiveness are taking science out of labs and
As the rise of technology enables of such approaches depends on integrating hundreds of thousands
citizens to harness new connections successfully tackling e-exclusion (see of knowledgeable volunteers in
and form communities that Box 3.1.2). collaborative, people-powered
transcend geographical limits, a research. Citizen science gives
socially destabilizing vicious circle Second, businesses have opportunities participants a sense of belonging to
could become entrenched: growing to win trust, build resilience and an effort that creates positive, lasting
expressions of anger are met with minimize the risk of disruption change – it combines advancing
increasingly harsh responses by by committing to transparency, scientific knowledge with educating
governments, which in turn further fuel responsibility and higher standards citizens, raising awareness of issues,
citizens’ feelings of disenfranchisement along their supply chains in areas such and encouraging wider participation
and discontent. as worker rights and environmental in democratic debates about how
sustainability, and by collaborating with science-related policy-making is done
citizens in new ways. (see Innovative Response 3).

The Global Risks Report 2016 43

Part 1

Conclusion The recent rise in impact investing November 2015, the UK government
and social impact bonds (SIBs) expanded its commitment to SIBs
Fundamental demands are being sees businesses and governments by announcing an allocation of
expressed by people around the world, partnering to address pressing issues £105 million for new SIBs aimed at
both as citizens and as consumers. that prevent citizens from enjoying enhancing financial support for locally
Their hopes and expectations can stable, equal and diverse societies. designed schemes.28
Part 2

potentially lead to improvements in

governance and corporate systems, The SIBs funding concept is a type Positive quantitative results for the
creating momentum to adapt new of “pay for success” model where Peterborough pilot, which generated
practices, norms and government financiers invest capital in public global attention for the SIB model,
policy. When other stakeholders listen, projects, usually aimed at measurable affirm that private investment in critical
citizens can be enlisted to co-create the improvements in social outcomes social service programmes can be an
future they desire. That is the promise for at-risk individuals, with the goal of effective way not only for a vulnerable
of the empowered citizen – but it is a reducing government spending in the population to receive services but
promise that can be met only when the long term.24 SIBs create a coalition of also for investors to diversify their
rate of transformation and innovation actors willing to share the investment investment portfolio to make financial
Part 3

in government, business and civil risk to deliver projects that address as well as social returns.
society structures matches the rate of social and environmental problems that
transformation in society itself. might otherwise generate significant SIBs hold substantial potential for
risks for companies, governments and many developing and emerging
individuals. markets around the world. In India,
an empowering girls programme
Three Innovative SIBs have been particularly useful is currently being piloted in 200
Responses to Encourage for pioneering new approaches to schools.29 In Mozambique, the malaria
Inclusive and Stable persistent and costly social ills. From performance bond has been designed
partnering vulnerable young people to increase funding for malaria
Part 4

Societies with toddlers to mentor as a way interventions over 10 years and protect
to address youth unemployment up to 8 million people from infection.30
When people mobilize and social through personal empowerment to Several states in Latin America are
stability is threatened, resilience tackling homelessness by providing experimenting in this area: for example,
becomes critical. In a world facing huge accommodation,25 employment the Mexican state of Jalisco has been
challenges, it is imperative to ensure and medical support, SIBs have working on the design of a programme
that institutions, communities and fundamentally shifted how social to move single mothers out of poverty,
individuals are prepared and able to service programmes are structured, while Brazilian states such as Minas
respond to unexpected disturbances. impacting both governmental Gerais and Cearà are exploring SIBs
The relationship between citizens, authorities and non-profit organizations to address prison reform and improve
governments and businesses needs to operating in the social sector. school completion rates.31 The
be designed to create a more inclusive Israel Arab Workforce Development
and stable environment. Inspirational stories abound, with the SIB, currently in the development
£5 million Peterborough SIB in the stage, aims to increase employment
While recognizing that much more can United Kingdom in particular heralded opportunities for Arab citizens of Israel,
be done in this space, the following as an example of fruitful public-private who are expected to represent 20% of
pages explore three types of innovative financial collaboration.26 Launched in the state’s population by 2020.32
response aimed at creating more 2010, the United Kingdom’s first SIB
transparent and open societies: re- was designed to reduce reoffending Many private sector investors, however,
empowering individuals, introducing among short-sentence male prisoners. still believe that SIBs entail too much
citizen-centric business innovations Private investors face the upfront risk for too little potential pay out. With
and paving the way for critical investment costs – and associated this in mind, incentivized crowdfunding
grassroots activism. These responses risks – of providing a not-for-profit has been emerging as an option for the
intend to provide a source of inspiration organization with capital to carry out next generation of SIBs. Crowdfunding
for pioneering and original ways to interventions. They are paid back a platforms such as Ethex, MicroGenius,
promote social inclusion and ensure financial return by the government if Abundance and Trillionfund already
stable societies. social outcomes are improved based have the technical profile and access to
on some standard measurement; investors to facilitate the crowdfunding
1. Innovative Finance for Social recently released evaluation results process and engage citizens in impact
Outcomes indicate that investors are on track investing.33
to receive returns in 2016.27 The
As governments struggle to reconcile Peterborough project – as is often By involving people more directly
budgetary pressures with increased the case for pilots – has gone in funding social investments, this
social demands, innovative models of through alternate phases of progress crowdfunded SIBs model has an
collaboration have been put in place and hindrance, while overall being even greater chance of revamping
to tackle major societal challenges. recognized as a key test for opening public service delivery structures
the way to the SIBs market to come. In towards more effective and responsive

44 The Global Risks Report 2016

 Part 1
approaches – citizens who invest in consumer brands. Sensor technology with attempts to strengthen local
the initiatives gain an incentive to raise on recycling containers and trucks communities.
public support for them, and volunteer enables the company to track how
their time to help them succeed. much recycling households are putting With the growth of smart technology
Rigorous, increasingly crowdfunded out for curb-side collection, and reward and social media, behaviour-change-
SIBs could transform government, community members accordingly.35 focused business models will

Part 2
putting people in charge for the benefit become more mainstream. These
of citizens and society. Increasingly, it will be possible to move models represent a new approach
beyond education, individual actions for businesses and citizens that
2. Citizens beyond Consumers: and pledges and to use the Internet of encourages dialogue and interaction
Business Innovations for Social Things to reward verified behaviours. It and that strengthens a relationship
Change is possible to imagine citizens signing based on collaboration, trust and
up to have data collected by their transparency. By serving customers
Companies have developed many appliances and utility companies. and engaging citizens – as individuals
ways to give individual customers These data would be shared with with specific values, ambitions and
incentives to be loyal to their brands, consumer brands prepared to offer aspirations, regardless of their age,

Part 3
such as reward cards or money-off rewards for eco-friendly behaviour geography, education, income or social
coupons for repeat purchases. Many such as using less water, turning the status – businesses can potentially
companies also see value in spending thermostat down or switching off lights build their brands while simultaneously
to position their brands as socially or in unused rooms. Sensors could be creating positive social impact.
ecologically conscious, for example by fitted to a household’s cycles and cars,
supporting community development and rewards offered when data show 3. Novel Ways to Engage Citizens:
projects. that the bicycle, not the car, is being Putting Them in Charge through
used during rush-hour periods. Science
Technology is increasingly making
it possible to combine these ideas, For small and medium-sized In recent years, “citizen science” has

Part 4
which enables companies to provide enterprises, in particular, another been gaining attention as a way to
incentives for individual customers emerging opportunity to win business engage citizens in scientific activity,
to perform actions that benefit the by contributing to more cohesive with endeavours ranging from air
community or environment. This is and sustainable societies is offered pollution assessments in Europe to
a way for individual businesses to by community currencies such as chimpanzee counting in Tanzania. The
profit by improving brand image and the Bristol Pound in Bristol, United proliferation of digital technologies
enhancing customer loyalty, while Kingdom;36 the TradeQoin in the has provided scientists with innovative
at the same time contributing to Netherlands;37 and Berkshares in ways to engage the wider public in
community or environmental resilience Massachusetts, United States.38 The science and expand resources for
and engaging consumers in their own motivation behind such currencies is research. Similarly, it has provided
sustainability policies. These win-win typically to encourage citizens to spend citizens with new venues for developing
situations lead to more accountable locally and to reward them when they online collaborative projects aimed at
and transparent practices. do, thereby strengthening the local collecting quantitative analytical data to
economy by making it more diverse improve transparency and outcomes in
The apparel retailer Patagonia is an and resilient. public decision-making mechanisms.
example. The company has reinforced
its brand identity and image with a An estimated 250 community A great many aspects of daily life
well-received campaign encouraging currencies are available at the global are amenable to a citizen science
consumers to repair more frequently.34 level, from Kenya and Brazil to Japan, approach because science and data
By trading the risk that customers with more to come.39 For local small impacts everything from the food we
might buy a bit less of their product, and medium-sized enterprises, active eat to the policies we try to influence.
Patagonia is betting on gaining a participation in community currencies Although many of the highest-profile
bigger market share by attracting represents an opportunity to stay citizen science projects are limited to
values-oriented buyers who want to relevant through changing consumer “crowdsourcing” – that is, to citizen
shop at values-driven companies. By markets and to demonstrate solidarity participation in data gathering or
asking people to keep products longer, with local authorities and citizens’ monitoring exercises led by scientists
the company has made manifest its organizations, which are typically the – citizen engagement occurs on an
values and involved customers in the driving forces in their establishment. ascending scale (see Figure 3.1.2). In
achievement (and watchdogging) of its recent years a number of “extreme
own sustainability goals. Although local currencies are a less citizen science” initiatives have
obvious fit for major consumer brands, emerged in which citizens take the lead
Similarly, the US-based Recyclebank it is possible to imagine incentives for in pursuing locally important goals by
is paving the way for environmental environmentally conscious behaviour asking research questions, collecting
behaviour change. By recycling, its being offered to consumers in the form and analysing data and using them to
4.4 million members in the United of local currency rather than discounts influence policy-making.40
States and the United Kingdom can – thereby associating the brand not
earn discounts from over 3,000 major only with ecological issues but also

The Global Risks Report 2016 45

Part 1

Citizen science is more than just assessing a potential link between the for a new way to interpret monitoring
a new outlet that engages public- way judges vote and how often they and evaluation mechanisms, by
spirited citizens who have an existing incarcerate.44 The analysis showed entrusting citizens to play a role in these
interest in science. It is increasingly that a particular judge suspected for processes while leveraging the power
seen as a tool that could enable bias with his conviction rate of 95% of hyperconnectivity.
a more participatory democracy was instead within the statistical
Part 2

by empowering individuals and norm vis-à-vis all other colleagues These examples show how a citizen
communities to analyse, understand of the Reykjavik district court. Other science model of grassroots activism
and ultimately take ownership of the examples include crowd-reading of can create new ways for citizens to
issues that affect them, enabling them published oil contracts to promote engage, facilitate a wider range of lay
to propose concrete and actionable more transparency in the extractive participation, and enable bottom-up
solutions to decision-makers.41 Citizen industries,45 and leveraging open community participation. More and
science projects have the potential to data by re-calculating the published more often, fact-based debates and
keep public authorities accountable, accounts of municipalities to explain activities precede street action and
influence the way they spend public arcane budgets more clearly to complement conventional activism
funding, and inform them about citizens.46 with increased general awareness
Part 3

community priorities and needs. and understanding of the policies and

A key citizen science initiative running interests at stake. While recognizing
“Factivism” – evidence-based in conjunction with the United Nations’ the intrinsic limits of data and statistics
activism42 – can come in many Sustainable Development Goals (SDGs) (they can be “based on a firm
forms. Recently, an open research is the Open Seventeen Challenge, foundation of wet sand”), and the need
investigation of the New South through which citizens can pitch for citizens to interpret them reasonably
Wales pecuniary interests register crowdsourcing projects to tackle SDGs and accurately, citizen science is
for the 2013–2014 fiscal year has via the use of open source data.47 By pushing citizens closer to deliberation
forced political figures to correct their unlocking the power of the grassroots mechanisms and decision-making
disclosures of interests to the Australian efforts of citizens around the world, authorities.
Part 4

parliament and thereby comply with the challenge aims at identifying ideas
current regulation, which requires the and proposals to hold all stakeholders
declaration of all directorships and – including businesses, governments,
shareholdings.43 In Iceland, a group NGOs, media and international
of enthused citizen scientists parsed organizations – accountable, while
a huge database of documents and also delivering on the UN global
sentences to investigate for bias by goals. This initiative sets a precedent

World Protest Intensity

Figure 3.1.2: Participatory Levels of Citizen Science

Level 4 - Extreme Citizen Science

- Collaborative science - problem definition, data collection and analysis

Level 3 - Participatory Science

- Participation in problem definition and data collection

Level 2 - Distributed Intelligence

- Citizens as basic interpreters
- Volunteered thinking

Level 1 - Crowdsourcing
- Citizens as sensors
- Volunteered computing

Source: Based on Haklay 2012.

46 The Global Risks Report 2016

 Part 1
Endnotes
1
Leetaru 2014.
2
Edelman Trust Barometer 2015.
3
Tripathi 2015. On this point, the World Economic Forum’s Inclusive Growth and
Development Report 2015 sheds light on how countries can make use of policy

Part 2
incentives and institutional mechanisms in order to widen social inclusion while
sustaining economic growth (World Economic Forum 2015b).
4
Fordham 2015.
5
van Biezen 2013.
6
Liu 2013.
7
AFL-CIO 2015; Bradner 2015; Sinclair 2015.
8
Bachmann, Correa, and de Zúñiga 2012; Van Laer and Van Aelst 2010.
9
Howard 2014.
10
Legrain 2015; The Economist 2014.

Part 3
11
CIVICUS 2015.
12
Corera 2015.
13
Carothers 2015.
14
CPJ 2015.
15
CIVICUS 2014.
16
The Guardian 2012.
17
OECD 2014; Wendling, Radisch, and Jacobzone 2013.
18
ACT Alliance 2011.
19
Kiss 2015.

Part 4
20
As global problems evolve and become intrinsically more complex to manage,
the rise in the number of multistakeholder networks, such as the Global Solutions
Networks (http://gsnetworks.org/), signals an important change in the way
governments, businesses and societal actors organize around critical challenges.
21
Ashoka No date.
22
Uribe 2010.
23
https://www.zooniverse.org/
24
BIREG LLC 2013.
25
Bridges Ventures 2012; UK Cabinet Office No date.
26
Cook 2014.
27
Social Finance 2014.
28
UK Cabinet Office 2015.
29
Educate Girls http://educategirls.in/
30
Deveximpact 2013.
31
Levey and Bloomgarden 2015.
32
Social Finance Israel 2015.
33
Cohen 2015.
34
Patagonia 2015.
35
https://www.recyclebank.com/.
36
http://bristolpound.org/.
37
https://tradeqoin.com/en/.
38
http://www.berkshares.org/.
39
Smedley 2014.
40
European Commission 2013.
41
Scicurious 2013.
42
Bono 2013.
43
Evershed, Farrell, and Guardian readers 2015.
44
http://crowdcrafting.org/project/heradsdomar/ (in Icelandic).
45
http://repository.openoil.net/wiki/Main_Page
46
http://openkratio.org/ (in Spanish).
47
http://openseventeen.org/.
48
Easterly 2010.

The Global Risks Report 2016 47

Part 1

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impact bond”. Third Sector, 8 August 2014. http://www.thirdsector.co.uk/editorial- 2015. Government at a Glance 2015. Paris: OECD Publishing.
qualified-success-peterborough-prison-social-impact-bond/finance/article/1307221 Patagonia. 2015. “Better than new”. Patagonia Environmental and Social
Cohen, R. 2015. “Hello, Crowdfunding! Meet social impact bonds”. NPQ Post 28 Responsibility. http://www.patagonia.com/us/common-threads/
January 2015. http://nonprofitquarterly.org/2015/01/28/hello-crowdfunding-meet- Scicurious. 2013. “Citizen Science, Citizen Policy”. Scientific American Blog
social-impact-bonds/ Network, 7 January 2013, http://blogs.scientificamerican.com/scicurious-brain/
Corera, G. 2015. “GCHQ ‘broke rules’ when spying on NGOs”. BBC News, 22 June citizen-science-citizen-policy/
2015. http://www.bbc.com/news/technology-33225194 Sinclair, S. 2015. “Investor vs. state: Canada is being pummeled by NAFTA
CPJ (Committee to Protect Journalists). 2015. “10 most censored countries”. corporate lawsuits. Why do we put up with it?” Canadian Center for Policy
Attacks on the Press. CPJ. https://cpj.org/2015/04/10-most-censored-countries. Alternatives, 1 July 2015, https://www.policyalternatives.ca/publications/monitor/
php investor-vs-state

Deveximpact. 2013. “Goodbye Malaria: Mozambique Malaria Performance Bond”. Smedley, T. 2014. “Could community currencies produce a more sustainable
https://www.devex.com/impact/partnerships/goodbye-malaria-mozambique- financial system?” The Guardian Sustainable Business, 15 May 2014. http://
malaria-performance-bond-362. www.theguardian.com/sustainable-business/community-currency-bristol-brixton-
sustainable-finance
Easterly, W. 2010. “Don’t cite global numbers unless you know they’re trustworthy
(They usually aren’t)”. AIDWATCH blog post, 21 January 2010, http://aidwatchers. Social Finance. 2014. Peterborough Social Impact Bond reduces reoffending by
com/2010/01/don%E2%80%99t-cite-global-numbers-unless-you-know- 8.4%; investors on course for payment in 2016. [Press release], 7 August 2014.
they%E2%80%99re-trustworthy-they-usually-aren%E2%80%99t/ http://www.socialfinance.org.uk/peterborough-social-impact-bond-reduces-
reoffending-by-8-4-investors-on-course-for-payment-in-2016/
The Economist. 2014. “Europe’s populist insurgents turning right: Parties of
the nationalist right are changing the terms of European political debate”. The Social Finance Israel. 2015. “Employment opportunities for Arab citizens of Israel”.
Economist, 4 January 2014. http://www.economist.com/news/briefing/21592666- Social Finance Israel. http://www.socialfinance.org.il/social-impact-bonds/21/
parties-nationalist-right-are-changing-terms-european-political-debate-does employment-opportunities-for-arab-citizens-israel

Edelman Trust Barometer. 2015. “2015 Edelman Trust Barometer: Executive Tripathi, S. 2015. “What’s good for companies is good for NGOs too”. livemint, 15
Summary”. http://www.scribd.com/doc/252750985/2015-Edelman-Trust- June 2015. http://www.livemint.com/Opinion/3m6EyCcehT7ksaeeYq47IO/Whats-
Barometer-Executive-Summary good-for-companies-is-good-for-NGOs-too.html

European Commission. 2013. Science for Environment Policy: In Depth Report: UK Cabinet Office. No date. “London Rough Sleeping Social Impact Bond”, Centre
Environmental Citizen Science. Science Communication Unit, University of the West for Social Impact Bonds, Case study. https://data.gov.uk/sib_knowledge_box/
of England, Bristol. Report produced for the European Commission DG Environment, london-rough-sleeping-social-impact-bond
December 2013. http://ec.europa.eu/environment/integration/research/newsalert/ UK Cabinet Office. 2015. “Cabinet Office settlement at the Spending Review”. Press
pdf/IR9_en.pdf Release 25 November 2015. https://www.gov.uk/government/news/cabinet-office-
Evershed, N., P. Farrell, and Guardian readers. 2015. “Exclusive: NSW Liberal MPs settlement-at-the-spending-review-2015
failed to declare financial interests on register”. The Guardian, 26 March 2015. http:// Uribe, T. 2010. “Objeto Social: CORONA Viste Tu Casa 2010”. Video (in Spanish).
www.theguardian.com/australia-news/2015/mar/27/exclusive-nsw-liberal-mps- https://vimeo.com/46780449
failed-to-declare-financial-interests-on-register
van Biezen, I. 2013. “The decline in party membership across Europe means that
Fordham, T. 2015. “Vox Populi Risk: A future where aggregate economic growth political parties need to reconsider how they engage with the electorate”. European
no longer guarantees political stability”. Strategic Foresight: Perspectives on Global Politics and Policy and London School of Economics and Political Science. Blog
Shifts. World Economic Forum. http://reports.weforum.org/global-strategic-foresight- http://blogs.lse.ac.uk/europpblog/2013/05/06/decline-in-party-membership-europe-
community/tina-fordham-citigroup-vox-populi-risk/ ingrid-van-biezen/
The Guardian. 2012. “Conflict over land in Cambodia is taking a dangerous turn”. Van Laer, J. and P. Van Aelst. 2010. “Internet and social movement action
Natural resources and development, Poverty matters blog. http://www.theguardian. repertoires”. Information,Communication & Society 13 (8): 1147–71.
com/global-development/poverty-matters/2012/sep/25/conflict-over-land-cambodia

48 The Global Risks Report 2016

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Wendling, C., J. Radisch, and S. Jacobzone. 2013. “The use of social
media in risk and crisis communication”. OECD Working Papers on Public
Governance No. 24, OECD Publishing. http://www.keepeek.com/Digital-Asset-
Management/oecd/governance/the-use-of-social-media-in-risk-and-crisis-
communication_5k3v01fskp9s-en#page1
World Economic Forum. 2015a. Global Risks 2015, 10th Edition. Geneva: World
Economic Forum. http:// www.weforum.org/reports/global-risks-report-2015

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2015b. The Inclusive Growth and Development Report 2015. Geneva: World
Economic Forum.

Part 3
Part 4

The Global Risks Report 2016 49

Part 1

3.2 Climate Change and Risks As climate change gathers pace, the
negative impacts on yields will become

to Food Security
more pronounced.9 This is unlikely
to be a steady deterioration. Yield
responses to biophysical stresses
are highly non-linear – once critical
Part 2

thresholds for temperature or water are

The Intergovernmental Panel on towards intensive systems that rely on breached, plants suffer severe damage
Climate Change (IPCC)’s Fifth groundwater resources for irrigation, and yields can fall precipitously. If
Assessment Report reaffirmed that along with the current growth in climate change is allowed to reach
warming in the climate system is demand for water-intensive animal a point where these biophysical
unequivocal and that it is “extremely products, agriculture becomes even thresholds are exceeded routinely, crop
likely” that human influence has been thirstier. At the same time, urbanization failure will become the norm.
the dominant cause. The climate is and industrialization in emerging and
changing already1 – and, as the World developing economies are also driving A global temperature increase of
Bank’s Turn Down the Heat report up demand for fresh water in energy 4.7°C – consistent with what might be
Part 3

explains, failure to limit warming to 2°C production, mineral extraction, and expected by the end of the century on
will create a high risk of that change domestic use, further stretching the current emissions trajectories – would
becoming catastrophic.2 There is already tight supply.6 see sharp increases in the risk of
growing realization that failure to act, critical temperatures being exceeded.
quickly and effectively, could reverse Against this backdrop of tightening The risk of failure will vary by crop and
many of the advances of the 20th constraints, climate change seriously location. For example, researchers
century. threatens food security in two ways. estimate that for maize in Illinois, in
First, it will harm agricultural production: the Midwestern United States, the
rising temperatures and changing likelihood of temperature exceeding
Risks to Food Security: rainfall patterns will slow yield gains, a critical threshold currently has a
Part 4

Analysis contributing to higher food prices and recurrence interval of 1 in 100 years;
an increasingly precarious supply- this would increase to a 1 in 6 year
The risk to food security is especially demand balance that will make return period. For single-variety rice in
great because agriculture is already markets more prone to volatility. Jiangsu on the eastern coast of China,
straining to meet a rapidly growing Second, it will increasingly disrupt the return period would increase from 1
demand from a finite resource base. food systems: more extreme weather in 100 years today to as often 1 in every
The combined impact of a rising will destabilize tighter markets and 4 or 5 years.10
population and growth of the middle exacerbate volatility, imperil transport
class – wealthier people eat more infrastructure and trigger local At lower levels of warming, yield losses
cereal-intensive meat – is set to drive food crises. As a result, the risks of may be offset by higher concentrations
a demand increase of 60% by 2050.3 humanitarian emergencies, national or of atmospheric carbon dioxide,
Yet the global average yield growth for regional instability and mass migration resulting in a beneficial CO2 fertilization
cereals has slowed in recent years; it will increase. In the words of a former effect. However, the extent of this effect
already lags behind demand growth. Executive Director of the World Food has recently been questioned.11 Other
This gap cannot be covered by an Programme, “without food, people factors associated with climate change
expansion of cropland because of have only three options. They riot, they – such as elevated tropospheric
the need to protect forests and other emigrate, or they die.”7 The security ozone,12 as well as increased biotic
areas of high value for conservation implications will be felt by developing stress from weeds, pests and disease
and carbon sequestration. Agriculture and developed countries alike. – represent further downside risk to
is increasingly competing with other yields.13
uses for land – such as urbanization, Climate Impacts on Agricultural
transport, bioenergy, forestry and Production Some of the most severe risks are
mining – and so crop production is faced by countries or regions with high
pushed towards ever more marginal Climate change will slow global yield levels of existing poverty and food
soils.4 growth because higher average insecurity, which are highly dependent
temperatures result in shorter growing on agriculture for livelihoods. Even
Yet more worrying is the fierce seasons and lower yields. Shifting at low levels of warming, the most
competition for water, the lifeblood of rainfall patterns can also reduce yields vulnerable countries will suffer serious
agriculture. Water withdrawals have because lower rainfall reduces soil impacts. In Sub-Saharan Africa, for
increased threefold over the last 50 moisture or increased rainfall waterlogs example, 1.5°C of warming globally by
years, and demand is anticipated soils. Climate trends are already the 2030s could bring a 40% loss in
to rise by a further 40% by 2030.5 believed to be diminishing global yields maize cropping areas. A world warmer
With a shift in global production of maize and wheat.8 by 2°C would bring unprecedented
heat extremes in summer across
Part 3.2 was contributed by Rob Bailey, Chatham
House as well as Bernice Lee and Florian Reber from
the World Economic Forum.

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Figure 3.2.1: Projected Impacts on Crop Yields in a 3°C Warmer World
M3.3 Climate change will depress agricultural yields in most countries by 2050 given current 
agricultural practices and crop varieties

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Part 4
Source: Müller and others 2009.
Note: The figure shows the projected percentage change in yields of 11 major crops (wheat, rice, maize, millet, field pea, sugar
Source: WRI 2013. beet, sweet potato, 
soybean, groundnut, sunflower, and rapeseed) from 2046 to 2055, compared with 1996–2005. The values are the mean of three emission scenarios 
Note:across five global climate models, assuming no CO2 fertilization (see note 54). Large negative yield impacts are projected in
–50% change = half as productive in 2050 as in 2015; +100% change = twice as productive in 2050 as in 2015. many areas that are highly 
dependent on agriculture. World Development Report 2010

60–70% of South-East Asia. Warming Several attempts have been made to such as droughts, heat waves and
of 4°C would likely bring increasing model the impact of climate change floods. These can trigger local food
extremes in rainfall patterns in South on future food prices.15 The modelled crises, disrupt trade infrastructure
Asia – up to a 30% decline in the dry impacts vary considerably, depending and have cascading systemic
season and a 30% increase during the on the underlying model parameters, consequences – for example, crop
wet season – increasing the risk of both climate scenarios, adaptation failure in a major breadbasket region
flood and drought.14 responses, and data employed. can precipitate international food price
However, in the vast majority of cases spikes.
As the map in Figure 3.2.1 indicates, the models find higher prices with
the most severe yield impacts are not climate change than without. Taking Food Crises and Humanitarian
confined to poor and food-insecure the mean of nine different models all Emergencies
countries. Agricultural productivity using the IPCC “business as usual” Droughts or floods can have
is also at risk in key exporting emissions pathway finds that global catastrophic localized consequences in
breadbasket regions such as North crop prices will be 20% higher in 2050 regions where food insecurity is already
America, South America, the Black than they would have been without high and markets do not function
Sea area and Australia. The same climate change.16 These models show well. Recent history provides some
is true for India and China – the two that oil seed prices typically increase tragic examples. The 2010 Pakistan
most populous nations on Earth, both the most under climate change (up floods, caused by a wetter monsoon
currently committed to self-sufficiency to 89% above a scenario with no consistent with climate change
(in practice, trade neutrality) in climate change), though the largest predictions, devastated croplands and
cereals. Should they have to abandon single climate-induced price increase led to a collapse in rural incomes and
these policies of self-sufficiency, the modelled is for coarse grains, at 118% sharp deterioration in food security.
consequences will be felt globally in above the 2050 baseline.17 One year later, a drought in East Africa
the form of tighter international markets – since linked to climate change18 –
and higher prices. Reducing the risk Extreme Weather and Disruption of triggered a regional food crisis affecting
of climate change to crop yields will Food Systems 13 million people; in war-ravaged
necessarily encompass adapting Somalia, over a quarter of a million
agriculture to new regions (Box 3.2.1). Some of climate change’s most serious people died in the resulting famine.
risks to food security arise from more
frequent and extreme weather events

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Box 3.2.1: Adaptation and Its Limits

The adaptation of agriculture is critical to reduce the risk climate change poses to food systems. A number of strategies and
technologies have emerged to increase resiliency in individual livelihoods and the systems supporting agricultural value chains.
Part 2

These can be exercised at the farm level through techniques such as changing the cropping calendar, breeding plants that
have increased tolerance to extreme conditions, or shifting crop production to new regions – however, such approaches are
not without their challenges. Plant breeding takes time and is ultimately subject to biophysical limits that exhibit little genetic
variation within or across crops; it is hard to selectively breed for tolerance to extremes. In addition, the limited availability of
suitable land means crop production cannot always migrate as desired (for example, the poor quality of soils to the north of
Russia’s wheat crop means production cannot simply track northwards as temperatures rise).

Therefore adaptation is also critical at the landscape level through economically viable strategies that protect biodiversity and
enhance land and forest management. Market systems have a critical role to play too, especially through products such as
index-based weather insurance or information systems. Finally, enabling policies for the careful management and use of food
Part 3

reserves, early warning systems, open trade arrangements and price stabilization can help address volatility in the system.

Distribution and Transport limiting the rate of economic recovery international cereal markets reached
Infrastructure in the longer term. When Cyclone Pam a crisis point when 40 governments
Extreme weather events pose a risk not hit Vanuatu in March 2015, maritime imposed export restrictions on their
only to the production of crops but also services to the islands were interrupted agriculture sectors in a vicious circle of
to the distribution of globally traded for 10 days and 80% of the country’s collapsing confidence and escalating
Part 4

supply. Critical transport infrastructure roads were blocked by debris.26 prices.30 Global governance was
in many of the world’s largest cereal found wanting: while trade rules exist
exporters is increasingly at risk of Preparedness for disruption to to limit restrictions on imports, there is
disruption from acute and chronic transport infrastructure along food nothing comparable to prevent limits on
climate stresses.19 supply chains is often low. Climate exports.
proofing transport infrastructure
In July 2012, for example, Russia’s brings higher maintenance costs Once again, the poorest countries are
Black Sea ports were struck by flash while diverting investment away from most at risk. The 2008 crisis meant
floods, damaging key grain export the expansion of network capacity.27 33 net food-importing developing
infrastructure and interrupting trade in a Yet as competition for capacity countries saw an increase in their
year when drought had already brought heightens, and just-in-time business total food import bill of 0.8% of GDP,
a 25% drop in production.20 In the models favour cost-efficiency over contributing to deteriorations in the
United States, the ageing network of system redundancies,28 the potential balance of payments and inflation.31
locks and dams along the Mississippi impact of climate events on transport Because of a high reliance on
River – a key artery for wheat, maize infrastructure will rise, signalling an ever unprocessed staples, the poorest
and soybean exports – has struggled more severe risk to food security in households are particularly exposed
to cope with rainfall extremes: in 2011, import-dependent regions. to rises in primary commodity prices.
flooding led to delays in barge traffic The World Bank estimates that the
and rerouting of freight via road and Systemic Crises 2008 crisis put 100 million more people
rail; the following year a severe drought Although developed economies may into poverty globally.32 Among these
saw water levels fall to levels that were be largely untroubled by food price households, food expenditures may
almost unnavigable.21 More frequent spikes, they are vulnerable to knock- account for more than half of income,
heatwaves and floods are also exerting on effects – such as instability and leaving families in a very difficult
increasing stress on the country’s migration – arising from the impacts of situation if prices spike.
railways and roads.22 If sea levels rise price spikes in less resilient countries.
by 4 feet by 2100 as projected in recent High food prices in turn increase the
climate models,23 around two-thirds of Recent years have witnessed a series risk of riots and instability, particularly
port facilities along the US Gulf Coast – of spikes in international cereal market in countries that are politically fragile.33
out of which 20% of the world’s maize prices triggered by extreme weather During the 2008 food crisis, protests
and soy exports are shipped24 – will be since linked to climate change – most erupted in 61 countries and riots
at risk of water damage or inundation.25 notably the 2010 Russian heatwave in 23.34 Such events can lead to
and 2012 US Midwest drought.29 Price cascading risks that move rapidly
Damage to port infrastructure following rises can be amplified if governments through markets and polities with
an extreme climate event further prioritize domestic food security at near- and long-term consequences.
exacerbates disaster situations, the expense of global food security The spike in international wheat prices
hindering the delivery of critical food by panic-buying, hoarding and after the 2010 Russian heatwave was
supplies to affected populations and unilateral export controls. In 2008, felt keenly in North Africa – the largest

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Box 3.2.2: Reducing Food Waste

Current estimates suggest around one-third of all food produced for human consumption is lost or wasted along the food
value chain, with a direct economic cost of US$750 billion per year. Excluding land-use change, the annual emissions

Part 2
footprint of food produced but not consumed is around 3.3 million tonnes of carbon dioxide equivalent (CO2e), more than
the total national emissions of India; the land requirement is almost 1.4 billion hectares, close to 30% of the world’s
agricultural land area; and the blue water (surface and groundwater) consumption is approximately 250 cubic kilometres,
three times the volume of Lake Geneva.1

Approximately half of this volume (54%) is lost in upstream processes including agricultural production (a third of the total
alone) and post-harvest handling and storage; the other half (46%) is wasted in downstream activities such as processing,
distribution, and consumption. Consumption wastage is much higher in high- and middle-income regions (31–39% of total
losses) than in low-income regions (4–16%). Significant low-income losses at the post-harvest stage result from a lack of
adequate infrastructure to prevent spoiling.2

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Compounding the problem of direct losses are wasteful, or resource-inefficient, forms of food production: grain-fed
livestock production, for example, results in significant losses of edible calories along the food chain from those available
from plants to those ultimately consumed by humans. This inefficiency is expected to become increasingly significant as a
growing global middle class consumes more meat.

The cost of food wastage is significant not only in economic terms, but also for current and future resource and food
security. Addressing food wastage offers significant potential to alleviate pressures on natural resources and the tightening
balance of supply and demand: it is estimated that halving the current rate of wastage could meet over a fifth of caloric

Part 4
needs by 2050,3 reducing required cropland by 14% and agricultural greenhouse gas emissions by 22–28% (saving
approximately 4.5 GtCO2e per year) relative to the counterfactual of no reduction in food wastage.4

Currently the environmental costs of food waste are externalized and the market incentives to reduce waste are minimal.
Maintaining supply chains that deliver year-round uninterrupted supplies of produce are inherently wasteful because
retailers depend on over-ordering and suppliers on over-producing. But currently the economic benefits of this model
outweigh the costs. Exacting retail quality and presentation standards, consumer expectations, and legislation governing
food re-use all exacerbate the problem by rejecting perfectly edible but non-aesthetically pleasing produce. Minimizing
waste will therefore require technical innovations, legislative reform, and a recalibration of consumer expectations.5

Notes
1
FAO 2013.
2
FAO 2013.
3
Lipinski et al. 2013.
4
Bajželj et al. 2014.
5
FAO 2014.

wheat-importing region in the world Droughts, floods and heatwaves will case scenario that could precipitate
– where the price of bread was the become increasingly severe as climate a systemic crisis of unprecedented
subject of initial protests that became change accelerates. Extreme El Niño magnitude.38
the 2011 Arab Spring. events, which can wreak havoc with
harvests in breadbaskets and food Conclusions
In the same year, a prolonged drought insecure regions alike, are expected
in Syria – since linked to climate change to become more common.36 The risk Climate change presents a profound
– contributed to rural-urban migration of production shocks with systemic threat to food security because
that heightened tensions in the nation’s consequences is increasing, with biophysical stresses mean it will
cities before conflict erupted, leading profound implications for the stability of become increasingly difficult for
to a civil war that remains in progress.35 international markets: one recent study agriculture to meet demand, and
The long-term consequences of the found that what would have been a more extreme weather increases the
sequence of events, beginning with 1-in-100 year global production shock risk of both local and systemic food
extreme weather and ending with the over the second half of the 20th century crises. The poorest countries are
Arab Spring and Syrian civil war, are still may have become a 1-in-30 year most vulnerable, but crop failures in
playing out through ongoing conflict, event by 2050 – a more than threefold systemically important production
mass migration and increased risk of increase in risk.37 A double breadbasket regions will have global consequences
terrorism. failure, in which two critical harvests are that may extend beyond food systems.
lost, now represents a plausible worst-

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Trade will be critical to managing 1. Big Data and Improved Climate- increased data analysis and modelling
short-term production shortfalls and Risk Information Services capabilities. For example:
matching long-term changes in supply
and demand as the impacts of climate Timely, accessible and actionable – For many least-developed
change on production accelerate climate and weather information countries and small island
and demand for food increases in enables farmers, communities and developing states, improved
Part 2

developing countries. However, local authorities to identify their specific early-warning systems for natural
as markets become increasingly vulnerabilities to climate variability and disasters are a key enabler of
vulnerable to destabilizing production to develop response strategies. This sustained and climate-resilient
shocks in breadbasket regions, they information is also key to any design growth and development.
will become a source of risk as well as of the kind of efficient and effective Responding to that need, the
a means of managing risk. insurance schemes further explored government of France proposed at
below, which could help reduce the Third UN World Conference on
Adaptation of agriculture is a priority exposure to economic losses. Disaster Risk Reduction in March
for both public and private sectors, 2015 in Sendai, Japan, to mobilize
but it is not a panacea (see Box 3.2.1). Tailored information is critical, given the the international community to
Part 3

Agriculture is only one part of the global complexity and geographic specificity improve the climate resiliency of
food system. Transport infrastructure of climate change impacts. One vulnerable countries, namely Small
must also be climate-proofed. System example is high-resolution topographic Island Development States and
resilience requires new rules to militate data, which will be made available by Least Developed Countries. During
against export controls and may the US Geological Survey following the COP21 meetings in Paris,
necessitate efficiency trade-offs such a White House announcement last the Climate Risk Early Warning
as increased strategic storage. September. The data, generated from Systems (CREWS) initiative
NASA’s Shuttle Radar Topography was officially launched by the
More fundamentally, there are limits Mission (SRTM) in 2000, previously governments of Australia, Canada,
to what agricultural adaptation can covered only the United States; it France, Germany, Luxembourg
Part 4

achieve and significant uncertainty is now also available for Africa, and and the Netherlands. Collectively,
about where, and when, these limits next year will expand to include Latin the six countries pledged over
will be reached. The longer climate America and the Caribbean. This kind US$80 million to scale up improved
change continues, the more likely of topographic data could greatly climate-risk early warning systems
it is that these limits will be found. enhance agricultural planning for across 80 countries.
According to the IPCC, “there may drought, glacial retreat, inland flooding,
be a threshold of global warming landslides and coastal storm surges.40 – UN Pulse is the response to a call
beyond which current agricultural from the United Nations’ High-
practices can no longer support However, enhanced information alone Level Panel on the Post-2015
large human civilizations.”39 Without is not enough. Equally essential is the Development Agenda for data
ambitious, determined action to reduce capability to model potential impacts on to “improve accountability and
emissions and contain climate change interconnected environmental, social decision-making, and to meet
at manageable levels, long-term food and economic systems if vulnerable the challenges of measuring
security cannot be guaranteed. communities are to develop the better sustainable development
capacities and integrated policies progress.”41 Labs in New York,
Spheres of Action to needed for long-term resilience. It Jakarta and Kampala are
is challenging, however, to develop bringing together government,
Mitigate the Climate Risk actionable information from a large UN agencies, academia and the
on Food Security range of data gathered from different private sector to pioneer new
sources. Data are mostly insufficient approaches to using big data for
This section addresses three spheres to meet the information needs for development.
in which action can be taken. These evidence-based climate adaptation,
include the use of big data to boost the especially in vulnerable developing – The Climate Services for
efficiency and specificity of climate-risk regions that have large agricultural Resilient Development
information; the provision of insurance sectors exposed to increased climate Partnership was launched by
innovations that can reduce risk to risk. the United States during the
small farmers, who are an essential Climate Summit in partnership
and fundamental aspect of agricultural Consequently, attention is increasingly with the United Kingdom, the
success; and the incentivization turning towards broad-based Asian Development Bank, the
of climate-resilient, low-carbon partnerships that bring together Inter-American Development Bank,
investments. information services, policy resources, Google, the Skoll Global Threats
technological and modelling skills Fund, the American Red Cross,
and capacity building and training. and the GIS software company
Many of these partnerships cut across Environmental Systems Research
public and private sectors to leverage Institute (ESRI).

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– The World Resources Institute to economic losses and thereby food of insurance while increasing its
developed Global Forest Watch insecurity. effectiveness. For example, because
is an online system to monitor not all parts of the continent will be
forests and provide information to Robust and affordable weather affected by drought at the same
improve their management (see insurance depends on the availability of time, by pooling drought risk across
http://www.globalforestwatch.org/ accurate data, together with improved all member countries ARC can

Part 2
about/awards_and_testimonials). capabilities to forecast weather reduce individual premiums paid
It combines satellite data variability and extreme events such by governments by up to 50%. To
with modern mapping and as droughts. Today a combination of be eligible for insurance through
information and communication data provided by weather stations with ARC, governments have to develop
technologies to enable a new kind remote sensing and satellite imagery evidence-based contingency plans.
of environmental monitoring and are helping scale innovative insurance
decision-support tools. schemes across developing countries. In addition to regular ARC insurance
schemes covering the costs for
– A partnership between Google and Weather index insurance schemes, immediate responses to weather
the Brazilian environmental NGO also known as “index-based financial disasters, the ARC Extreme Climate

Part 3
Imazon, Google Earth Engine risk-transfer mechanisms”, pay Facility will issue data-based climate
integrates satellite measurements out based on weather rather than change catastrophe risk bonds to
dating back decades with other crop losses. They use an index of participating countries.43 These bonds
data feeds such as weather productivity-relevant weather variables are structured as concessional finance
information to map changes such such as precipitation onset and that must be used to reduce risk
as deforestation in remote areas. intensity, streamflow and temperature: exposure and vulnerability. This not
Future applications will enable the insurance pays out, for example, if only provides countries with incentives
monitoring of sea ice change and measured rainfall falls below a specified to invest in climate-smart agriculture,
illegal fishing. level. but also improves long-term planning

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and reduces investment risks for the
– IBM’s Insight Cloud Service, a One advantage of weather index private sector. By blending public and
partnership with Twitter and the insurance is that it removes the need private finance, ARC hopes to generate
Weather Company, combines for expensive field visits to assess crop over US$1 billion in additional finance
open data with private data to damage, reducing costs and improving over the next 30 years.
produce analytics enabling, for accessibility of insurance for low-
example, insurance companies to income smallholder farmers. Having 3. Financial System Shift to Unleash
issue weather warnings to policy- such insurance coverage can create a Climate-Resilient, Low-Carbon
holders. virtuous circle: it often is a necessary Investments
condition for accessing bank loans or
Such programmes illustrate how large- other credit, which in turn can be used Effectively tackling climate-induced
scale collaborative efforts that leverage to invest in improved agricultural inputs risks will require new ways to incentivize
large data sets, scientific modelling, for increased productivity and reduced climate-smart investment. Despite
computational power and capacity- risk exposure. Weather index insurance increasing recognition of the economic
building programmes can improve local schemes also remove the possibility of risks, global financial systems are
decision-making to increase resilience poorly designed crop failure insurance yet to incorporate them into financial
and reduce exposure to important food schemes that effectively incentivize decision-making. Finding ways to
security-related risks. farmers to allow crops to fail. adapt established risk assessment
analytics, models and reporting
2. Reducing Economic Exposure With nearly two-thirds of its population frameworks could unleash larger flows
through Insurance Innovations working in agriculture – 80% as of capital towards climate-friendlier
smallholder farmers – Sub-Saharan investments.
Crop insurance schemes do not Africa is especially vulnerable to food
always deliver sufficient protection insecurity caused by droughts and For many executives and boards of
for small farmers against potential temperature rises. World Bank data directors, climate risks seem less
losses – either because they are too suggest that Sub-Saharan countries immediate than other issues. Even
expensive for low-income smallholder will need between US$14 billion and where Environment, Social and
farmers or because they provide US$17 billion per year from 2010 to Corporate Governance (ESG) data
perverse incentives that discourage 2050 to adapt to climate change.42 are disclosed, investors often remain
policy-holders from investing in crop The Africa Risk Capacity (ARC) is unaware of the severity of the threat:
productivity. International aid for an innovative African Union initiative, these data tend to be appended in an
disaster relief financing has often launched in 2014, to help close the annex rather than integrated into core
proved to be slow, ad hoc and financing gap by improving insurance financial statements, and they do not
expensive. Innovative climate-informed for climate-related risks. make clear the materiality of specific
insurance schemes can help to climate and regulatory risks. The sheer
address the shortcomings in these two ARC combines several risk transfer number of ESG criteria is a barrier
models, efficiently reducing exposure mechanisms to reduce the cost to comparability and identification of

The Global Risks Report 2016 55

Part 1

material risk. Most analysts do not take outcome, goals and targets of the economic sectors to increase the
opportunities such as earnings calls to Sendai Framework for Disaster resilience of balance sheets to
raise questions on material climate risk. Risk Reduction 2015–2030.44 climate shocks, while increasing
By engaging and expanding the transparency of a company’s
Finding ways to factor climate and the number of private sector exposure to climate risk.
regulatory risks into short-term organizations and others involved
in supporting the implementation of
Part 2

decision-making processes and related

financial metrics is essential for driving the Sendai Framework for Disaster,
climate risk–informed investments. This AR!SE will provide a robust and
requires not only using better, forward- effective mechanism to allow
looking data and metrics, but also the private sector to implement
mainstreaming these elements in core tangible projects and initiatives
financial processes and indicators. One that deliver results critical to the
major step in that direction is the recent achievement of the outcome and
announcement of Mark Carney, the goal of the Sendai Framework.45
Governor of the Bank of England and
Part 3

Chair of the G20’s Financial Stability – The Investor Confidence

Board (FSB), for the FSB to support Project, led by the Environmental
global efforts for voluntary standardized Defense Fund, seeks to create a
reporting on financial risks associated marketplace for energy efficiency
with climate change. by standardizing energy efficiency
protocols. Standards are an
Corporate commitments and domestic important enabler for growing
regulatory reform can also be important investments in emerging industries
drivers of change. At the COP21 in because they provide the
Paris a number of new corporate transparency, comparability and
Part 4

commitments to decarbonize security required by underwriters

portfolios, issue green bonds, or and investors. Retrofitting buildings
support more robust carbon pricing to be more energy efficient is
were made. They send important one example where lack of
signals to the broader business and standardization is a barrier to
investment communities and help scaling up investment, despite the
to win the trust of governments in clear economic benefits.
corporate support for improved
climate-friendly regulations. China’s – The Banking Environment
Green Credit Policy, launched in 2007, Initiative (comprising Barclays,
is an example of how regulators can BNP Parisbas, BNY Mellon,
tip markets towards more sustainable Deutsche Bank, Goldman Sachs,
investment. Lloyds Banking Group, Northern
Trust, The Royal Bank of Scotland
Understanding how regulatory reform (RBS), Santander, SMBC,
across sectors can help align financial Standard Chartered, Westpac)
markets with sustainable development has led the development of new
is the objective of the United Nations trade finance instruments, such
Environment Programme’s Inquiry as Sustainable Shipment Letter
into the Design of a Sustainable of Credits, intended to incentivize
Financial System. Other recently sustainable land use and to
launched initiatives seek to align preserve forests when working in
various aspects of the financial markets developing tropical nations.
with climate-associated financial risk
and sustainable development: – The 1-in-100 Initiative seeks
to stimulate and reward
– The AR!SE Initiative (Private climate-resilient investment
Sector Alliance for Disaster through collaboration involving
Resilient Societies), a global effort insurance companies, regulators,
led by the United Nations Office for scientists, modellers, accounting
Disaster Risk Reduction (UNISDR), professionals, investors and
aims to provide a new vehicle for other stakeholders. The initiative
collaboration between the private focuses on adapting lessons
and public sectors that can unlock from the insurance industry about
enormous potential at the local, how regulatory reform for capital
national, regional and global levels requirements and accounting
to contribute to achieving the procedures can be applied to other

56 The Global Risks Report 2016

 Part 1
Endnotes References
1
IPCC 2015. 2030 Water Resources Group. 2009. Charting our Water Future: Economic
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3
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5
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7
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Lobell and Gourdji 2012. Bailey, R., L. Wellesley, and F. Preston. Forthcoming. Vulnerabilities and Chokepoints
in Global Food Trade. London, UK: Chatham House.
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10
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11
See, for example, Feng et al. 2015; Myers et al. 2014; O’Leary et al. 2015. Change 4: 924–29.
12 Cai, W., S. Borlace, M. Lengaigne, P. van Rensch, M. Collins, et al. 2014. “Increasing
Porter et al. 2014.

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docrep/018/i3347e/i3347e.pdf
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Nelson et al. 2014. nitrogen acquisition of terrestrial plants under elevated CO2”. Global Change Biology
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19 Gordon, K., M. Lewis, J. Rogers, and F. Kinnniburgh. 2015. “Heat in the Heartland:
Bailey, Wellesley, and Preston (forthcoming).

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WEB-1-26-15.pdf
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25 IPCC (International Panel on Climate Change). 2014. Climate Change 2014: Impacts,
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Mastrandrea, et al. (eds.)]. Cambridge, UK and New York: Cambridge University
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Change [Core Writing Team, R.K. Pachauri and L.A. Meyer (eds.)]. Geneva: IPCC.
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Kelley, C.P., S. Mohtadi, M.A. Cane, R. Seager, and Y. Kushnir. 2015. “Climate
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33 Proceedings of the National Academy of Sciences 112 (11): 3241–46.
Natalini, Jones, and Bravo 2015.
34 King, D., D. Schrag, D. Zhou, Y. Qi, and A. Ghosh. 2015. Climate Change: A
von Braun 2008.
Risk Assessment. Cambridge, UK: Centre for Science and Policy, University of
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Kelley et al. 2015. Cambridge.
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Cai et al. 2014. Lee, B., F. Preston, J. Kooroshy, R. Bailey, and G. Lahn. 2012. Resources Future: A
37 Chatham House Report. London: Chatham House.
Bailey et al. 2015.
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Lipinski, B., C. Hanson, J. Lomax, L. Kitinoja, R. Waite, et al. 2013. “Reducing Food
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IPCC 2014.
40 UNEP_Reducing_Food_Loss_and_Waste.pdf
NASA 2014.
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Lobell, D.B. and S.M. Gourdji. 2012. “The Influence of Climate Change on Global
United Nations Global Pulse 2015. Crop Productivity”. Plant Physiology 160: 1686–97.
42
Tuttle 2014. Lott, F.C., N. Christidis, and P.A. Stott. 2013. “Can the 2011 East African drought be
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Tuttle 2014. attributed to human-induced climate change?” Geophysical Research Letters 40(6):
44
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UNISDR 2015.
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UNISDR 2015. G-24 Discussion Paper Series, No. 56. New York and Geneva: UNCTAD.
Moss, R., M. Babiker, S. Brinkman, E. Calvo, T. Carter et al. 2008. Towards New
Scenarios for Analysis of Emissions, Climate Change, Impacts, and Response
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ucar.edu/docs/IPCC.meetingreport.final.pdf
Myers, S.S., A. Zanobetti, I. Kloog, P. Juybers, A.D.B. Leakey, et al. 2014.
“Increasing CO2 threatens human nutrition”. Nature 510 (7503): 139–42.

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NASA. 2014. “U.S. Releases Shuttle Land Elevation Data to Aid Global Climate World Bank. 2008. “Food Price Crisis Imperils 100 Million in Poor Countries, Zoellick
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nasa.gov/content/us-releases-shuttle-land-elevation-data-to-aid-global-climate- 2013. Turn Down the Heat: Climate Extremes, Regional Impacts, and the Case
resilience/#.VnAOLEorJph for Resilience. A report for the World Bank by the Potsdam Institute for Climate
Natalini, D., A.W. Jones, and G. Bravo. 2015. “Quantitative assessment of political Impact Research and Climate Analytics. Washington, DC: World Bank.
fragility indices and food prices as indicators of food riots in countries”. Sustainability World Water Assessment Programme. 2009. The United Nations World Water
7: 4360–85. Development Report 3: Water in a Changing World. Paris, France: UNESCO and
London, UK: Earthscan.
Part 2

Nelson, G.C., M.W. Rosegrant, A. Palazzo, I. Gray, C. Ingersoll, et al. 2010. Food
Security, Farming, and Climate Change to 2050: Scenarios, Results, Policy Options. WRI (World Resources Institute). 2013. World Resources Report 2013–2015:
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and-climate-change-2050 http://www.wri.org/our-work/project/world-resources-report/world-resources-report-
Nelson, G.C., H. Valin, R.D. Sands, P. Havlík, H. Ahammad, et al. 2013. “Climate 2013-2015-creating-sustainable-food
change effects on agriculture: Economic responses to biophysical shocks”. PNAS
111 (9): 3274–79. http://www.pnas.org/content/111/9/3274
Nelson, G., D. van der Mensbrugghe, H. Ahammad, E. Blanc, K. Calvin, et al. 2014.
“Agriculture and climate change in global scenarios: Why don’t the models agree?”
Agricultural Economics 45: 85–101. doi: 10.1111/agec.12091
O’Leary, G.J., B. Christy, J. Nuttall, N. Huth, D. Cammarano, et al. 2015. “Response
of wheat growth, grain yield and water use to elevated CO2 under a Free-Air CO2
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Enrichment (FACE) experiment and modelling in a semi-arid environment”. Global

Change Biology. 21 (7): 2670–86.
Pautasso, M., T.F. Döring, M. Garbelotto, L. Pellis, and M.J. Jeger. 2012. “Impacts of
climate change on plant diseases – opinions and trends”. European Journal of Plant
Pathology 133: 295–313.
Porter, J.R., M. Montesino, and M. Semenov. 2015. “The risks of climate change
for crop production”. In Climate Change: A Risk Assessment. [King, D., D. Schrag,
D. Zhou, Y. Qi, and A. Ghosh]. Cambridge, UK: Centre for Science and Policy,
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Porter, J.R., L. Xie, A.J. Challinor, K. Cochrane, S.M. Howden, et al. 2014.
Food security and food production systems. In: Climate Change 2014: Impacts,
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Adaptation, and Vulnerability. Part A: Global and Sectoral Aspects. Contribution

of Working Group II to the Fifth Assessment Report of the Intergovernmental
Panel on Climate Change [Field, C.B., V.R. Barros, D.J. Dokken, K.J. Mach, M.D.
Mastrandrea, et al. (eds.)]. Cambridge, UK and New York: Cambridge University
Press, pp. 485–533.
Rizzo, A. 2009. “UN food agency says 1 billion people going hungry each day”,
Associated Press, 20 June 2009.
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development of maize and rice: A review”. Global Change Biology 20: 408–17.
Schwartz, H. G., M. Meyer, C. J. Burbank, M. Kuby, C. Oster, et al. 2014. Ch. 5:
Transportation. Climate Change Impacts in the United States: The Third National
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U.S. Global Change Research Program, 130–149. doi:10.7930/J06Q1V53.
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“Transport.” In Climate Change 2014: Mitigation of Climate Change. Contribution
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Kadner, et al. (eds.)]. Cambridge University Press, Cambridge, United Kingdom and
New York, NY, USA.
Tuttle, H. 2014. “Using cat bonds for climate change risks”. Risk Management
Magazine 2 December 2014. http://www.rmmagazine.com/2014/12/02/using-cat-
bonds-for-climate-change-risks/
US Department of Transportation. 2011. ‘Impacts of Climate Change and Variability
on Transportation Systems and Infrastructure: The Gulf Coast Study.’ https://www.
fhwa.dot.gov/environment/climate_change/adaptation/ongoing_and_current_
research/gulf_coast_study/gcs.pdf
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Framework for Disaster Risk Reduction 2015–2030. Geneva: UNISDR.
United Nations Global Pulse (Harnessing big data for development and humanitarian
action). 2015. http://www.unglobalpulse.org/about-new
Vanuatu, Government of. 2015. Vanuatu: Post-Disaster Needs Assessment –
Tropical Cyclone Pam, March 2015. Government of Vanuatu.
von Braun, J. 2008. Food and Financial Crises: Implications for Agriculture and the
Poor. Washington, DC: International Food Policy Research Institute (IFPRI).
Walsh, J., D. Wuebbles, K. Hayhoe, J. Kossin, K. Kunkel, et al. 2014: Ch. 2: Our
Changing Climate. Climate Change Impacts in the United States: The Third National
Climate Assessment, J. M. Melillo, Terese (T.C.) Richmond, and G. W. Yohe, Eds.,
U.S. Global Change Research Program, 19–67. doi:10.7930/J0KW5CXT.
Willenbockel, D. 2011. Exploring Food Price Scenarios Towards 2030 with a Global
Multi-Region Model. Oxfam Research Report. http://policy-practice.oxfam.org.uk/
publications/exploring-food-price-scenarios-towards-2030-with-a-global-multi-
region-model-132376

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 Part 1
3.3 Global Disease Outbreaks resistant strains, mutating viruses, or
a pandemic that is so large it renders
response supplies inadequate.

Advances in research and the

discovery of diagnostics, drugs and

Part 2
vaccines have saved millions of lives,
Risk of Infectious Disease Causes for Concern but these gains remain very fragile
and are under threat from the growing
Outbreaks: Analysis By 2050, the world’s population will resistance of microorganisms to the
have risen to 9.7 billion.2 Cities will most effective known medicines. The
The recent Ebola crisis will not be the become increasingly dense and shanty number of deaths in the European
last serious epidemic the world faces; towns – with inadequate housing and Union and the United States as a
indeed, public health outbreaks are a lack of basic services such as water, direct result of antibiotic-resistant
likely to become ever more complex sewerage and waste management bacteria is increasing every year,
and challenging. Despite progress in – will swell. A combination of high and the burden in low- and middle-

Part 3
some aspects of public health over the population density, poverty, changes income countries is much higher.6
past two decades, endemic infectious in social structures, and a lack The emergence and spread of strains
diseases remain a major problem, and of public health infrastructure will of HIV, tuberculosis and malaria that
new or resurging infections, the spread create progressively more favourable have evolved resistance to current
of drug resistance and the rise in conditions for communicable diseases. medicines are of particular concern,
non-communicable diseases all pose
as they could overturn much of the
enormous challenges to often fragile Meanwhile the increasing transnational progress made against these diseases
health systems.1 flow of commodities, people and in recent years. An independent review,
animals coupled with increased spatial funded by the Wellcome Trust and
Infectious diseases, which are density will magnify the transmission

Part 4
the UK government, estimates that
among the leading causes of death of these diseases, both between by 2050, if no action is taken, these
worldwide, do not confine themselves people and across the human-animal drug-resistant strains could cost an
to national borders. Their capacity to barrier.3 Most large cities have airports additional 10 million lives each year and
spread rapidly across geographies through which millions of passengers around US$100 trillion in lost output;
– jeopardizing social and economic travel: over 2 billion global passengers approximately the equivalent of losing
security as well as challenging human travelled annually by air in the first the UK economy from global output
health and well-being – is amplified by decade of the 21st century, compared every year.7
ever-growing globalization, increased with just 68.5 million in the 1950s.4
trade and travel, the rise in urbanization, Continued growth in the movement Infectious diseases that are not
and changes in the environment, of people and commodities between currently on the radar are also a cause
behaviour and society. Some threats, urban centres intensifies the risk for concern. The greatest potential
such as influenza, are known. Others of infectious transmissions across threats among unknown pathogens
are not. Unknown just a few decades geographies and diminishes the ability are those that spread easily – through
ago, HIV/AIDS has killed more than 30 to respond to, and effectively prepare the air, for instance – and to which
million people from all socio-economic for, a global disease outbreak. humans have little or no immunity. The
backgrounds. What might be the
2002–2003 SARS pandemic provides
next HIV/AIDS, and are we sufficiently A recent study led by the University one recent case study: ultimately
prepared for its arrival? of Cambridge identified 20 known governments, businesses and people
infectious diseases that have re- came together to overcome the
At the same time, new opportunities emerged or spread geographically, outbreak, although not before it had
to predict, prevent, detect and including dengue, chikungunya, caused nearly 8,000 infections and 800
treat diseases are emerging from a typhoid, West Nile, artemisinin- deaths across 29 countries.8 The death
better understanding of the social resistant malaria and the plague.5 Other toll would have been much higher had
determinants of health and from trends known threats – such as influenza the virus been more easily spread:
including new technologies in real-time (i.e. H1N1 Swine Flu), MERS-Cov, infectious disease experts believe that
diagnosis, data analysis (including and Ebola – continue to raise fears, if SARS had been more contagious, it
in the field of genomics), biomedical especially when they take hold in could have become one of the worst
research, the internet and mobile data densely populated areas and when pandemics since the 1918 influenza
and communications, often developed treatment and prevention measures outbreak that killed 50 million people.9
outside the traditional health sector. are not necessarily available. Even
More innovative ideas, partnerships, when known infectious diseases can The SARS crisis demonstrates the
and ways of working and financing will be mitigated by existing treatments or socially destabilizing potential of
be critical for containing the dynamic vaccines, we face the risk of emerging unfamiliar new diseases. As affected
threat of outbreaks in the 21st century.

Part 3.3 was contributed by Jeremy Farrar, The

Wellcome Trust, Stéphanie Cristin, World Economic
Forum and Priya Basu, The World Bank.
The Global Risks Report 2016 59
Part 1

areas came to a standstill, in cities by the recent Ebola outbreak, these Challenges in Containing the Risks
such as Beijing, Singapore and Toronto reactions can be rational or they can
people stayed home, public places dramatically overestimate risk, leading To know where to channel resources
emptied and health workers were to a wide variety of factors that can most effectively, stakeholders face
shunned.10 Next time an unfamiliar negatively impact the economy, from the challenges of preparing for
disease causes panic, there is no stress to labour and supply scarcity, and responding to known threats
Part 2

guarantee that it will occur in a financial market instability, and price and anticipating the source of new
geography where effective solutions increases. ones. The lack of adequate, resilient
can be initiated as quickly as in this public health surveillance systems,
instance. Furthermore, the risk posed The economic impact of aversion infrastructure to effectively deploy
by the immediate effects of outbreaks behaviour may be significantly greater resources and a health workforce to
must not minimize the long-lasting than the direct economic impact from provide accessible, quality care where
effects on society as a whole. The sickness and death. In the Ebola crisis, needed leaves us vulnerable to regional
recent Ebola crisis in West Africa the loss of life in Guinea, Liberia, and and global spread. Many emerging
points to the intensified nature of the Sierra Leone was accompanied by infections and antibiotic-resistant
risk and its heightened complexity the closure of businesses, dramatic strains of common diseases originate
Part 3

in places where health systems are reductions in travel and tourism, in one location and then disseminate to
vulnerable and lack diagnostic or and trade slowing to a trickle. At the new places at often alarming speeds:
response measures. Over the course beginning of 2014, expected economic societies are only as strong as the most
of the crisis, more than 11,000 people growth for the year was 5.9% in Liberia, fragile health system (see Initiative 1).
died and more than 16,000 children 11.3% in Sierra Leone and 4.5% in
were orphaned.11 Basic health services Guinea. By the end of the year, actual Preparedness and response measures
such as prenatal consultations, routine growth was only 2.2% in Liberia and must therefore address three key
vaccinations, antiretroviral therapies 4.0% in Sierra Leone, while in Guinea areas: behaviour; diagnostic, drug and
and treatment of endemic diseases the economy shrank.14 In Liberia, more vaccine research and development
in the region were sharply reduced. than 70% of households reported (R&D); and regulatory and financial
Part 4

As stigma rose, schools closed while having insufficient money to buy environments.
growing distrust and fear shifted food.15 The adverse impacts were not
community interactions. The hours of restricted to countries that experienced Behaviour
schooling lost, the reconfiguration of cases of Ebola: Burkina Faso, Côte The multifactorial nature of broader
families, and decreased food security d’Ivoire and the Gambia all experienced global health issues poses an
and employment, to name only a few of adverse impacts on GDP.16 For 2015, enormous challenge to all stakeholders
the epidemic’s effects, will impact the the World Bank estimated a potential – governments, non-governmental
affected region well beyond the halt of loss in GDP of more than US$1.6 billion organizations (NGOs), industry and
the outbreak.12 in the three most affected countries, citizens. Changing demographics,
and more than US$500 million across climate change, urbanization, travel,
Economic Risks the rest of the continent. political instability, war and terrorism
are only a few of the factors challenging
Beyond direct effects on health, Any fears about an inability to our preparedness for and response
infectious diseases impose significant contain a major epidemic will have to endemic and emerging infections
economic costs. Adding to the direct economic effects outside the affected and the spread of non-communicable
costs borne by sufferers and their areas because of the increasingly diseases.
households, infectious diseases – interconnected nature of the global
particularly those that are relatively fast- economy. The economic impact of There is an urgent need for society
spreading or poorly understood by the the Ebola epidemic could have been to value and invest more in evidence-
general population – have an additional much worse: at its height, the most informed public health strategies.
economic impact through a response pessimistic epidemiological projections Despite major advances in the global
called “aversion behaviour”. This was of how the disease could spread, economy over the past 50 years,
demonstrated when Singapore came combined with economic modelling, millions of people worldwide still cannot
to an economic standstill over SARS, suggested a potential impact of tens access basic needs, such as improved
as well as in responses to Ebola in 2014 of billions of dollars in West Africa tap water and toilets.
and HIV/AIDS in the early 1980s. alone.17 During the SARS outbreak in
Even with political interventions to
2003, estimates of the potential impact
provide the necessary infrastructure,
Aversion behaviour includes actions ranged from US$30 billion to US$100
halting the spread of infectious
taken by individuals to avoid any billion. In the case of SARS, too, the
diseases will require addressing
exposure to the illness, as well as actual impact was likely lower because
individual and collective human
actions taken by investors as they the epidemic was contained – but the
behaviours. Proper prevention
anticipate those individual decisions.13 economic damage was still significant.18
and responsible, fact-based
Even individuals who have no direct
crisis communication, including
contact with the disease will take a
educational campaigns and behaviour
range of actions to avoid any risk of
change strategies to facilitate the
contracting the disease. As shown
long-term adoption of health-

60 The Global Risks Report 2016

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of barriers hindered the ability to
expedite clinical trials. Mobile data is
Box 3.3.1: Health Communication another area where regulations on
privacy need to be balanced with
Health communication often receives less attention and fewer resources than public health imperatives, as it has
medical, scientific or policy areas. However, failure to convey the right information increasing potential to track the spread

Part 2
risks costly consequences at the individual and societal levels. In a crisis situation, of epidemics (see Initiative 3).
panic can spread quickly and the way communication is handled can either cost
or save lives. Models that combine thinking from theories of complex systems, The sluggishness of progress towards
crowd dynamics, group psychology and information are being used to assess the a regulatory environment specifically
impact and effectiveness of mass communication in the event of a major health targeted to epidemic crisis situations
outbreak. is a matter of growing international
concern. This work needs to be
Prevention is another area in which communication must be handled with care. For coordinated by an empowered and
decades, governing bodies have considered that simply providing the most properly funded global health body:
accurate information to people was the best way to improve public health the World Health Organization (WHO).

Part 3
prevention. However, evidence for this approach has not been encouraging – A collaborative framework exists –
messages on the dangers of smoking, for example, have had relatively little effect the International Health Regulations,
on behaviour. As understanding grows about the circumstances in which originally created in 1969 to contain
individuals do not make rational choices, a more subtle form of prevention is cholera, smallpox, yellow fever and the
getting momentum. As well as providing information, this involves “nudges” – plague, and since expanded to cover
evidence-informed strategies that, rather than forced compliance, encourage the more diseases – but it does not provide
adoption of behaviours and habits that are good for people and social groups. adequate reassurance that countries
are putting in place what is needed to
The incentives employed are not necessarily monetary; they could be compliance prepare for, and respond to, emerging

Part 4
with social norms or aversion to risk, drawing on insights from behavioural crises.
economics, psychology, anthropology and neuroscience. After the British
government led the way in the late 2000s, many countries have set up behavioural Countries need to be empowered to
insight units that have led to significant improvement in the effectiveness of public allow a timely and robust response so
health prevention. On 15 September 2015, President Obama signed an executive they can request and expect speedy
order to further the use of behavioural insights in improving policy-making. international assistance when needed.
Incentives and financing mechanisms
need to be generated to encourage
maintaining behaviours, need to be diagnostics, drugs, and vaccines and investments in public health, and
carefully designed, field-tested and compliance with treatments.19 countries need to be held accountable.
implemented (see Box 3.3.1). Platforms such as the Global Health
The recent Ebola outbreak arguably Security Agenda and the WHO’s Global
Understanding the social and cultural illustrates the human cost of the Influenza Surveillance and Response
contexts that may contribute to current development model in the System have had some success and
epidemics, such as burial practices face of potential public health threats. aim to complement current regulations
or misconceptions about how a Recent tests on an Ebola vaccine in and mitigate threats, but they fall short
disease is transmitted, is also critical. Guinea seem to show that it provides of constituting a comprehensive,
To increase trust in evidence-based remarkable and immediate protection; robust global system with the flexibility
medical interventions, it is essential to however, the same vaccine had to defend against both known and
gain insight into cultural sensitivities been tested on monkeys a decade unknown biological threats.
and work in partnership with local ago, but subsequently languished in
communities. scientific limbo (see Box 3.3.2).20 Had The Future of Collaboration
resources been devoted to following
Diagnostic, Drug and Vaccine through earlier, the development of a From logistics to communications, from
Research and Development vaccine could have been accelerated, financial services to pharmaceuticals,
It can take 20–30 years to develop a potentially saving many of the 11,000 the private sector has capabilities and
new drug or vaccine, and the costs casualties. expertise that can be truly beneficial in
and risks are high. R&D efforts are not a public health outbreak. To leverage
coordinated to achieve their greatest Regulatory and Financial Environments them most effectively, however,
impact: the current model prioritizes Despite the progress that has been requires common ground and trust-
the development of profitable products made in the last two decades, more based cooperating mechanisms at
that can generate maximum sales, needs to be done to create enabling local and global levels with the public
usually through volume rather than regulatory environments. Development and non-government sectors that have
benefits, instead of focusing on unmet of the aforementioned Ebola vaccine, been established in advance of an
public health priorities. There is a lack for example, could conceivably have emergency (see Initiative 2).
of mechanisms that incentivize and been accelerated more quickly as the
stimulate the development of novel epidemic took hold, but a number

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Box 3.3.2: Developing an Ebola Vaccine: Reflections on the Current Regulatory Environment

In the 38 years between the first Ebola epidemic in Zaire (now the Democratic Republic of Congo) and its December 2013
emergence in Guinea, methods for containing Ebola were standardized but few advances were made in the development of a
Part 2

vaccine.

By 2009, at least seven Ebola vaccines had been tested in monkeys.1 Yet by 2014 none had been through phase I safety
testing in healthy human volunteers. There were no existing study protocols for evaluating experimental vaccines or treatments
in an epidemic setting, which meant that it took time to design and agree on the way forward and gain ethical approval. Even
when protocols were agreed, some organizations delayed supplying their therapeutics – not from lack of enthusiasm, but
because they did not have pre-agreed frameworks in place to allow them to do so. As the crisis neared its peak in August
2014, three candidate vaccines were in development with the potential to be used in clinical trials:

1. Merck (Newlink) had VSV-EBOV, originally developed in partnership with the Canadian government. Merck had preclinical
Part 3

data, but the vaccine had not been tested for safety in phase I human trials. Safety trials commenced only in October
2014.
2. GlaxoSmithKline (GSK) had ChAd3-ZEBOV, originally developed by Okairos, but again with no human safety data. Phase I
trials began in September 2014.
3. Johnson & Johnson’s phase I clinical trials began in January 2015.

Despite these delays, infectious disease experts argue that in some ways the world was relatively lucky with Ebola – vaccines
had already been in development because the pathogen had been earlier identified as an infection with bioterrorism potential.
This is not the case for other known diseases, such as MERS-CoV, chikungunya and West Nile, which will require a focused
Part 4

and coordinated R&D effort.

The current development model in vaccinology could be improved in three main ways. First, there should be leadership and
coordination of clinical trial activities in epidemics by a neutral body to ensure that they are efficient and properly prioritized. As
the Ebola outbreak took hold, a multitude of countries and research consortiums planned phase I and II/III clinical trials, but
there was little coordination of these efforts. The WHO, working with member states, philanthropists, industry, NGOs and
academia, should coordinate this priority-setting and ensure equitable access.

Second, phase I clinical trials must be conducted in the inter-epidemic period, at least for known diseases where a vaccine/
treatment is feasible or already in development. We must also develop novel platforms to allow for an assessment and
preparation for hitherto unknown infections. Finally, agreed trial protocols, contracts and initial ethics approvals for phase II/III
studies should be drawn up so that, when an outbreak begins, trials can start within days or weeks, not in months.

Note
1
Plotkin, Mahmoud, and Farrar 2015.

There is a long history of public-private – Ways to harness the data being – Ways to optimize in-country
cooperation in response to infectious generated by businesses in a operators in source regions
diseases. The Medicine for Malaria range of sectors to strengthen who can provide on-the-ground
Venture (MMV) and the Global Alliance predictive models and improve capabilities for building stronger
for Vaccine Initiative (GAVI), for instance, early detection and monitoring of health systems and early-stage
are long-standing examples of cross- epidemics; logistical support in a crisis, and
sector partnership that came out of a – Ways to drive forward the research who can undertake emergency
projected public health disaster that agenda by pairing private vaccine, response measures; and
was the result of escalating antimalarial drug and diagnostic researchers – Ways to promote responsible
drug resistance in the late 1990s and with public health experts and media engagement as part of crisis
the need for greater equitable access policy-makers; management communications,
to vaccines. with the identification of trusted
– Ways to improve regulatory
frameworks and policies across sources of information and the
Despite these and similar advances, dissemination of messages
nations;
new collaborative approaches are targeted to the right audience,
needed as the danger of outbreaks – Ways to provide stable and flexible
using the most appropriate local or
grows. Such approaches could long-term financing to deliver the
global information channels.
explore: necessary interventions;

62 The Global Risks Report 2016

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Box 3.3.3: The Pandemic Emergency Financing Facility (PEF)

The world’s Ebola response has highlighted the need for new financing mechanisms that can quickly deploy emergency
funding and rapid response teams at the first sign of a crisis.

Part 2
The World Bank Group is working with the WHO and other partners, including Munich Re and Swiss Re, on one part of the
solution: the Pandemic Emergency Financing Facility (PEF). The PEF would respond to the G20 Brisbane Leaders Statement
on Ebola, and it received the endorsement of G7 leaders in Germany in June 2015. Its open platform structure will be able to
function effectively within the evolving global pandemic financing architecture.

Simply put, the PEF would purchase private sector insurance coverage for developing countries to cover the immediate costs
of crisis response. It would deliver financing swiftly to governments and international partners, once a pre-agreed parametric
trigger is invoked. The payouts to the affected countries would come from the bond markets and (re)insurance companies. In
both cases the insurance premium would need funding from donors, although potential beneficiaries could also contribute.

Part 3
Over time, the PEF would grow in terms of size, geography and events covered, as the market for pandemic risk insurance in
developing countries grows. Governments have already used this model to successfully manage climate and natural disaster
risks.

Preventing future infectious disease outbreaks from becoming human and economic tragedies requires action on several
fronts. First, countries must invest in better preparedness, which starts with focusing on core public health functions and
strengthening health systems. Second, there is a need for a smarter, better-coordinated global epidemic preparedness and
response system that draws on the expertise of many more players; in this context, more effective public-private partnerships
are critical, particularly around logistics and communications. Third, a better-resourced and empowered WHO that is

Part 4
equipped to work with countries in monitoring outbreaks, identifying potential threats and mobilizing on-the-ground support is
an imperative.

Because assessing insurance premiums creates incentives to quantify the risks, a financing mechanism such as the PEF could
help on all the above fronts. It could create two important differences the next time there is a potential pandemic:

– Financing would be available quickly (within days) from the PEF, bringing discipline and rigour to the whole system
because a response strategy is thought out pre-emptively.
– The PEF’s design and in-built contingencies would drive the various concerned national and international players to work
together more effectively and coherently in advance, thus ensuring the appropriate highest level of crisis preparedness
and response readiness.

New predictive models, financing options, such as draw-down facilities, becomes ever more complex and
mechanisms and leadership for the insurance programmes and bonds. our interdependency grows, it is
preparedness and response of future clear that new equitable approaches,
outbreaks and antimicrobial threats are The World Bank Group, in collaboration technologies and innovative community
key to reducing the risks we face in the with the WHO and private sector and business models, and response
short, medium and long term. players, including Swiss Re and strategies and financing mechanisms
Munich Re, is developing an insurance will increasingly be needed to contain
The Ebola response was financed by product that will provide early financing known and unknown threats that
contributions from a range of non- to affected countries to respond to endanger social and economic stability
governmental organizations, notably future epidemics (see Box 3.3.3). worldwide. There must also be better
Médecins Sans Frontières, philanthropy Such initiatives and incentives could mechanisms in place to manage risks
(the Bill & Melinda Gates Foundation, be linked with the willingness of through international cooperation,
the Paul G. Allen Family Foundation, governments to invest sustainably involving both the public and private
the Skoll Foundation, and the and in a verifiable way in critical public sectors beyond the traditional
Wellcome Trust), governments, social health infrastructure. healthcare industry.
sector organizations, private sector
companies and individuals. However, Conclusion
new models are needed if future
response is to be faster, more stable, The Ebola crisis has put the spotlight
flexible and long term. To enable such on the importance of reducing the
models, the private and public sectors vulnerability of societies to infectious
must jointly develop new financing disease threats. As public health

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Three Initiatives to Mitigate health systems; most strengthening 2. Harmonizing Public-Private

interventions address only one of these Networks: The Key for Early
the Risk and Impact of blocks. Some target health worker Detection and Response
Global Disease Outbreaks training; others focus on demand
financing and insurance schemes; Coordination and time are invaluable
1. Building Resilient Health Systems still others aim to improve service assets in an emergency, so
Part 2

delivery and access to medicines and mechanisms that bring together

As highlighted most recently by the technologies. Although all these efforts public and private players in high-risk
Ebola crisis, a single and localized lead to meaningful improvements, their geographies to address emerging
outbreak can put national and even impact remains limited because they epidemics are likely to pay dividends.
international health systems at risk if do not address all dimensions of the Although response measures remain
they are unprepared to react quickly. health system in a synchronized and primarily international, harnessing the
The world will remain vulnerable to synergistic way. potential of national and local actors to
public health emergencies until every optimize early detection and response
state has comprehensive primary It is critical to understand the most on the ground is also critical.
care services, an adequate number efficient way for all health stakeholders
Part 3

of healthcare workers, available to collaborate. An extensive Local actors or in-country operators

medicines, robust health information analysis of successful innovations (multinationals and small or medium-
systems, infrastructure, public financing in emerging economies has shown sized enterprises) have the greatest
and a strong government to deliver that well-thought-out ecosystems of incentive to act swiftly in any outbreak
equitable and high-quality services to partnerships can significantly improve or epidemic.23 They are motivated
all its citizens. the impact and financial sustainability of not only by responsibility to their
health initiatives. communities but also by a desire to
During and in the aftermath of an protect their operations, maintain
outbreak, health systems become Ogun State in Nigeria, for instance, business continuity and reduce
more vulnerable to new crises. For is pioneering an ecosystem of business risks. Embedded in their
Part 4

example, in November 2014 fewer than partnerships that synchronizes all communities, and often operating
half of the health facilities in Liberia projects and programmes in primary in remote areas with little public
were seeing patients; the government service delivery, creating a model that infrastructure, they are likely to see
estimates that from May to August will increase low-income individuals’ emerging public health issues at
2014, skilled birth attendance was access to basic healthcare that can be an early stage. They also have the
27% below 2013 levels, measles replicated in other Nigerian states. capacity to raise an alert in the event of
immunization was down 50% and The World Economic Forum supported an emerging threat.
overall health services were operating the state’s Commissioner of Health in
at 40% lower capacity. Even in areas convening private and public sector The potential of private sector actors
where essential health services stakeholders that together defined the to contribute in an emergency was
have begun to resume, the loss of priorities and mapped out partners prominently witnessed in the Ebola
these services during the height of that could contribute in a synergistic crisis. Although several multinationals
the epidemic continues to have an way. Projects include a state- chose to shut down their operations
impact.21 subsidized insurance scheme, work on and leave the area, many others –
modernizing transport and logistics, along with domestic businesses
During the United Nations Development upgraded equipment, improved – maintained their presence and
Programme (UNDP)’s International sourcing of basic medical products, contributed meaningfully to the
Ebola Recovery Conference in July and a community-based primary care response through channels such as the
2015, the international community facility model with elements of public- Ebola Private Sector Mobilizing Group
pledged funds to build robust health private partnership. The intervention is (EPSMG). In-country operators such as
systems to “get to zero and stay at coordinated by a project management ArcelorMittal conducted initiatives on
zero” in the Ebola-affected countries. unit funded and managed by African community awareness and screening
However, it took a global health threat Health Markets for Equity in partnership programmes, and used their machinery
and close to 11,000 deaths to create with governments, foundations and and capacity to construct Ebola
this momentum. private sector players from across Treatment Centres. Alcoa educated
industries. its employees and their families on the
One challenge to strengthening health transmission of Ebola and taught them
systems is that very few programmes The programme is the first of its kind how to protect themselves. Firestone
address the entire system. No single in aiming to build the resilience of an built its own isolation and treatment
innovation or player can allow an entire entire health system. Although still in centre in its facility after a case was
system to leapfrog in the way that, its early stages, it has already won detected and nearby hospitals were
in the telecommunications industry Nigeria’s Excellence Award for 2015, unable to accommodate the patient.
for example, mobile phones made it which recognizes efforts in healthcare Beyond funding and in-kind donations,
unnecessary to establish expensive delivery. local actors also played an important
infrastructure for landlines.22 The WHO role in influencing decision-makers
has identified six building blocks of and mobilizing each other: the Sierra

64 The Global Risks Report 2016

 Part 1
Leone EPSMG chapter successfully of defining a broader coordination social network analysis. The resulting
lobbied to keep national ports open, mechanism to expand regionally and communications and data collection
which enabled crucial supplies to be apply globally. system allows for faster identification
shipped in as well as minimized the of transmission chains, which in turn
loss of livelihoods through disruption to 3. Big Data and Infectious Diseases: allows for faster isolation of potentially
economic activity. Mapping the Outbreak contaminated individuals and a more

Part 2
effective implementation of ring
Although these and many similar efforts One key to determining how viruses vaccination when necessary.
deserve and have received recognition, spread is to understand how people
a lack of coordination limited the ability move around and interact with one The Ebola crisis also saw innovative
of the private sector to apply its full set another on a daily basis. Big data attempts to use technology to predict,
of capabilities, and their interactions allows the modelling of how a virus detect and prevent new cases, such
were not aligned with public sector spreads, and the potential for it to as the mHero platform – supported
efforts on a day-to-day basis. Local be contained by various possible by a consortium of partners including
companies did not always know how interventions. UNICEF, UNAIDS and IntraHealth –
best to contribute to the response, and to connect ministries of health with

Part 3
national governments and responding The 2009 H1N1 Swine Flu pandemic frontline workers using text messaging
agencies were not always aware of response in Mexico is an early services and analyse the resulting data.
potential opportunities to partner with example of how mobile phone data However, the lack of interoperability
the local private sector. can be used. As the outbreak began of data information systems between
to spread, the Mexican government responders in the crisis highlighted the
Building on the flexible partnership acted to limit the movement of people, need to review new fabric architecture,
responses that complemented advising them to stay away from public diagnostics and logistics. The mHero
the channels of official assistance places such as airports, hospitals and platform is under development to
to Ebola-affected countries, the universities. A digital research team overcome these barriers.26

Part 4
Forum has drawn up a wide set of in Telefónica, one of Mexico’s largest
recommendations for public-private mobile network providers, saw an Finding the fastest and most efficient
cooperation models to manage opportunity to test the effectiveness channel to disseminate information is
any potential future outbreaks more of the advice by analysing patterns of key to fighting an infectious disease
effectively and reduce the risk of their movement. Drawing from anonymized outbreak, and access to data for real-
occurrence. The study disaggregates mobile phone call records of 1 million time monitoring, multi-path surveys
private sector interventions into three customers in one of Mexico’s most and detailed analysis is essential.
categories – in-country operators, affected cities, the team found that call The better the information, the more
expert capability companies and traffic was lower or stable in hospitals sure decision-makers can be of their
greater private sector contributors – and universities but increasing at the strategy. Real-time sharing of data in a
and makes specific recommendations airport, suggesting that people were coordinated and collaborative manner
for each category to enhance ignoring government advice and trying can make responses more efficient.
collaboration. At a high-level dialogue in to leave the area. If ways can be found to reconcile the
Cape Town, senior leaders expressed need for data with current regulatory
a desire to home in on optimizing local Next, the team created a model to environments and the legitimate right
actors in early detection and response simulate what would have happened to data privacy, lessons from the Ebola
plans. if the government had not intervened. crisis could potentially be applied in
Analysing more than five months of future emergency settings.
With subsequent endorsement from encrypted call records, including the
partners including the United Nations, period of government interventions,
the African Development Bank and the research team found that the
the Wellcome Trust, the Forum has intervention had resulted in between
launched a 12-month initiative to a 10% and 30% drop in movement,
mobilize in-country business operators postponed the peak of the epidemic
and facilitate dialogue with ministries by nearly two days and reduced the
of health for the local implementation number of infections by 10%.24
of networks in national preparedness
and response schemes. This entails A more recent intervention has
the creation of country-wide playbooks been witnessed in the use of GPS
and communication platforms between technology in the roll-out of treatment-
local actors across sectors to develop as-prevention to control the HIV
a rapid and efficient response in the pandemic in Sub-Saharan Africa to
event of an epidemic. Networks and construct predictive prevalence maps
their implementation roadmaps will for migrating populations.25 Health
be designed for specific high-risk workers can immediately report newly
geographies including Mali, Guinea, identified cases through solar radios
Liberia and Nigeria, with the vision or a new mobile application, facilitating

The Global Risks Report 2016 65

Part 1

Endnotes References
1
A well-functioning health system working in harmony is built on having trained and Butler, D. 2015. “How to beat the next Ebola”. Nature 524 (06 August): 22–25.
motivated health workers, a well-maintained infrastructure and a reliable supply of Coburn, B.J. and S. Blower. 2013. “Mapping HIV epidemics in sub-Saharan Africa
medicines and technologies, backed by adequate funding, strong health plans and with use of GPS data”. Lancet Global Health 1 (5): e251–3.
evidence-based policies (WHO 2015). Coburn A., M. Chang, M. Sullivan, G. Bowman, and S. Ruffle. 2013. “Disease
2 outbreak: Human pandemic”. Cambridge Risk Framework: Profile of a Macro-
UN DESA 2015.
Part 2

3 Catastrophe Threat Type. Centre for Risk Studies Working Paper 201303.31,
Zoonoses – pathogenic organisms such as bacteria or viruses that humans share
University of Cambridge Judge Business School.
with animals – cause more than 60% of human infectious diseases and have been
responsible for some of the most devastating disease outbreaks in recent years, Gubler, D.J. 2011. “Dengue, urbanization and globalization: The unholy trinity of the
including HIV, Ebola and SARS. See http://www.thelancet.com/series/zoonoses. 21st century”. Tropical Medicine and Health 39 (4 Suppl): 3–11.
More than more than 60% of the roughly 400 emerging infectious diseases that have Heymann, D.L., L. Chen, K. Takemi, D.P. Fidler, J.W. Tappero, et al. 2015. “Global
been identified since 1940 are zoonotic. See Jones et al. 2008. health security: The wider lessons from the west African Ebola virus disease
4
Gubler 2011. epidemic”. The Lancet 385 (9980): 1884–901.
5 Jones, K.E., N. Patel, M.A. Levy, A. Storeygard, D. Balk, J.L. Gittlelman, and P.
Coburn et al. 2013.
Daszak. 2008. “Global trends in emerging infectious diseases”. Nature 451: 990–94.
6
Estimates suggest that in the United States at least 2 million people acquire serious
Keogh-Brown, M.R. and R.D. Smith. 2008. “The economic impact of SARS: How
infections with bacteria that are resistant to one or more of the antibiotics designed
does the reality match the predictions?” Health Policy 88 (1): 110–20.
Part 3

to treat them, and at least 23,000 people die each year as a direct result of these
antibiotic-resistant infections. Estimates of economic costs range as high as US$20 Plotkin, S. A., A. Mahmoud, and J. Farrar. 2015. “Establishing a global vaccine-
billion in excess direct healthcare costs, with additional costs to society for lost development fund”. The New England Journal of Medicine 373 297–300.
productivity as high as US$35 billion a year (2008 dollars). See http://www.tufts.edu/ Review on Antimicrobial Resistance. 2015. Securing New Drugs for Future
med/apua/consumers/personal_home_5_1451036133.pdf (accessed 8 May 2013); Generations: The Pipeline of Antibiotics. Review on Antimicrobial Resistance. May
extrapolated from Roberts et al. 2009. 2015.
7
Review on Antimicrobial Resistance 2015. Roberts, R.R., B. Hota, I. Ahmad, R.D. Scott 2nd, S.D. Foster, F. Abbasi, S.
8 Schabowski, et al. 2009. “Hospital and societal costs of antimicrobial-resistant
Butler 2015.
infections in a Chicago teaching hospital: Implications for antibiotic stewardship”.
9
Butler 2015. Clin Infect Dis. 49 (8):1175-84.
10 Telefónica. 2013. “Catching swine flu: How big data helped doctors to understand
World Economic Forum 2015a.
a pandemic”. Telefónica UK, October. http://static.o2.co.uk/www/docs/business/
Part 4

11
UNICEF 2015.
ourthoughts/vr2_o2_swine_flu_case_study_pdf.pdf
12
UNDG 2015. UN DESA (United Nations, Department of Economic and Social Affairs, Population
13 Division). 2015. World Population Prospects: The 2015 Revision, Key Findings and
World Bank 2015.
14 Advance Tables. New York: United Nations.
World Bank 2015.
15
UNDG (United Nations Development Group). 2015. The Socio-Economic Impact of
World Bank 2014b. the Ebola Virus Disease in West African Countries: A Call for National and Regional
16 Containment, Recovery and Prevention. February. United Nations Development
World Bank 2015.
17 Group – Western and Central Africa.
World Bank 2014a.
18
UNICEF (United Nations Children’s Fund). 2015. “Impact of Ebola”. 20 February.
Keogh-Brown and Smith 2008.
http://www.unicef.org/emergencies/ebola/75941_76129.html
19
Heymann et al. 2015. USAID (US Agency for International Development). 2015. “Ebola response, recovery
20
Zimmer 2015. and resilience in West Africa: Call for partnership concept papers”. https://www.
21
usaid.gov/sites/default/files/documents/15396/EbolaCallforPartnerships_APS-
USAID 2015.
OAA-14-0000001.pdf
22
World Economic Forum 2015b. WHO (World Health Organization). 2015. Health Systems Strengthening Glossary.
23
World Economic Forum 2015b. Available at http://www.who.int/healthsystems/hss_glossary/en/index5.html
24
Telefónica 2013. World Bank. 2014a. “The Economic Impact of the 2014 Ebola Epidemic: Short and
Medium Term Estimates for West Africa.” Washington, DC: World Bank.
25
Coburn and Blower 2013.
2014b. “The Socio-Economic Impacts of Ebola in Liberia – Results from a High
26
USAID 2015. Frequency Cell Phone Survey. Rounds 1-2.” November 19. Washington, DC:
World Bank.
2015. “The Economic Impact of Ebola on Sub-Saharan Africa: Updated Estimates
for 2015.” Washington, DC: World Bank.
World Economic Forum. 2015a. “Fighting SARs (Severe Acute Respiratory
Syndrome)”. Unpublished paper.
2015b. Health Systems Leapfrogging in Emerging Economies: From Concept to
Scale-Up and Systems Transformation. Geneva: World Economic Forum.
2015c. Managing the Risk and Impact of Future Epidemics: Options for Public-
Private Cooperation. Geneva: World Economic Forum.
Zimmer, C. 2015. “For vaccines needed in an epidemic, timing is everything”. New
York Times 6 August 6 2015.

66 The Global Risks Report 2016

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Part 2
Part 3
Part 4

The Global Risks Report 2016 67

Part 1

Part 4:
Building resilience against global risks
necessitates consensus in identifying
the risks that should most concern
different stakeholders across regions

Risks for Doing and countries. The final part of The

Global Risks Report therefore focuses
Part 2

on the impact of global risks on the

business community across different

Business at a regions and countries. It draws on the

views of executives in 140 economies
covered by the World Economic

Glance
Forum’s Executive Opinion Survey
(see Box 4.1) about the risks of highest
concern for doing business.1

The fact that today’s businesses are

Part 3

global is not news, but the extent

of the globalization of trade and
commerce – and the risks it presents
– is far from understood. Foreign direct
investment (FDI) inflows have increased
a staggering 25-fold since 1980, rising
from US$54 billion to US$1.23 trillion
in 2014,2 as marked by shifts from
manufacturing to services and from
developed to developing and emerging
Part 4

markets. Indeed, South-South

investments (that is, investments from
one developing economy to another)
have intensified, growing by two-
thirds, from US$1.7 trillion in 2009 to
US$2.9 trillion in 2013.3 Information and
communications technologies (ICTs)
have internationalized supply chains,
linking trade and investment ever more
tightly.4 While offering companies
opportunities to lower production costs
and countries the chance to develop
economically by participating in global
value chains, the internationalization of
business increases exposure to global
risks. From environmental to economic
and political risks, companies are
vulnerable even if they have no
immediate presence in the geography
where the risk arises.5 The resilience
of any individual business depends
heavily on the resilience of its suppliers
and purchasers, whose supply chains
can span many countries.

Increasingly, businesses need

to strengthen their scenario and
emergency planning capacity to
analyse complex and often uncertain
interdependencies if they are to build
resilience to global risks. Likewise,
countries also need to understand the
global risks to doing business. Globally,
FDI inflows fell by 16%, from US1.47$
trillion in 2013 to US1.23$ trillion in 2014
– well below the pre-crisis 2007 peak –

68 The Global Risks Report 2016

 Part 1
for reasons that include perceptions of
global economic fragility, government
policy uncertainty and elevated Box 4.1: The World Economic Forum’s Executive Opinion Survey
geopolitical risks.6
Every year since 1979, the World Economic Forum has conducted its Executive
This part of The Global Risk Report Opinion Survey (EOS). Capturing executives’ perspectives on a broad range of

Part 2
2016 therefore aims to provide insight socio-economic issues, the EOS primarily informs the World Economic Forum’s
for both business and policy-makers by annual Global Competitiveness Report and its derivatives. The 2015 edition of the
drawing on the findings of the Forum’s EOS, conducted between February and June 2015, surveyed over 13,000
Executive Opinion Survey (EOS) about executives in 140 economies. EOS respondents were asked to select the five
the risks for doing business in 140 global risks that they were most concerned about for doing business in their
economies. It takes the global risks country within the next 10 years, choosing from the set of 28 global risks
discussed in previous chapters to the presented in the The Global Risks Report 2015.1 See Appendix C for details of the
country level and analyses regional methodology and the EOS.
trends, country-specific responses and
presents deep-dives into the five often- Note

Part 3
1
Following an expert review in spring 2015, the set of risks was increased from 28 to 29 global risks in this
cited risks of highest concern. year’s Report. Formerly part of the risk of national governance, illicit trade is now treated as a separate global
risk. See Appendix B for details regarding the difference in the list of global risks from last year and this
edition.

Regional Analysis
The risks of highest concern for central role in production processes, instance, no executive considers failure
doing business differ considerably service provision and everyday life. In of climate mitigation and adaptation
from country to country, according to emerging and developing economies, as the number one risk for doing
EOS data. However, some patterns the top concern is unemployment and business in his/her country. This stands

Part 4
emerge. In developed economies, underemployment as well as potential in contrast to the priorities considered
economic risks such as asset bubbles energy price shocks. by members of the multistakeholder
and fiscal crises are high on the community of the World Economic
business agenda; concern is also A striking finding is the relative absence Forum who took part in the Global
present about technological risks of environmental risks and, more Risks Perception Survey and perceived
such as cyberattacks and data theft. generally, of long-term issues among it as the most impactful and the third
In these economies, it is increasingly the top concerns of business leaders most likely risk on a global scale (see
evident that connectivity plays a in their respective countries. For Figure 1). This finding highlights the

Figure 4.1: Global Risk of Highest Concern for Doing Business, by Country

Asset bubble Failure of urban planning Natural catastrophes Failure of national governance Cyberattacks
ECONOMIC

SOCIETAL

ENVIRONMENTAL

GEOPOLITICAL

TECHNOLOGICAL

Deflation Food crises Biodiversity loss and ecosystem collapse Interstate conflict
Energy price shock Large-scale involuntary migration Extreme weather events State collapse or crisis
Failure of financial mechanism or institution Profound social instability Environmental catastrophes Terrorist attacks
Fiscal crises Spread of infectious diseases
Unemployment or underemployment Water crises
Unmanageable inflation

Source: Executive Opinion Survey 2015, World Economic Forum.

Note: In addition to the risk drawn on the map, the following countries have another risk as the risk of highest concern: Haiti: Unemployment or
underemployment; Oman: Energy price shock; Peru: Profound Social Instability; Paraguay: Failure of financial mechanism or institution; Senegal:
Note:Energy price shock; Tunisia: Profound Social instability; Venezuela: unmanageable inflation; Viet Nam: Man-made environmental catastrophes
In addition to the risk indicated on the map, the following countries have another risk as the risk of highest concern:
Haiti: Unemployment or underemployment; Oman: Energy price shock; Peru: Profound social instability; Paraguay: Failure of financial mechanism or institution; Senegal: Energy
price shock; Tunisia: Profound social instability; Venezuela: Unmanageable inflation; Vietnam: Man-made environmental catastrophes.
The Global Risks Report 2016 69
Part 1

divergence between national and high;9 in Poland and Macedonia, ranks second globally for online
global interests when it comes to some where more than half of youth are business-to-consumer transactions.14
global risks such as climate change. unemployed;10 and in the Balkans, with The risk of terrorist attacks is third on
It also calls for continued alignment unemployment sky-rocketing in Serbia the list (and 13th in Canada): according
across stakeholders whose actions are and Bosnia and Herzegovina.11 Along to the House Committee on Homeland
based on different time horizons. with challenges related to involuntary Security, the home-grown Islamist
Part 2

migration, high unemployment rates extremist threat in the United States

The top global risks for doing business may help to explain why the risk of has escalated dramatically in 2015, with
for each country are shown in Figure profound social instability also features more terror cases than in any full year
4.1. Full economy-level data are prominently in Southern and Eastern since September 11, 2011.15
available at www.weforum.org/risks. Europe.
Throughout Part 4, the ranking of risks
Table 4.2: North America:
refers exclusively to the EOS question The risk of an asset bubble is the top
Percentage of Economies in which a
on risks of highest concern for doing concern in Iceland, Luxembourg,
Risk Appears among the Top Five of
business.7 Norway, Sweden, the United Kingdom. Highest Concern for Doing Business
A related economic risk causing
Part 3

Europe concern across Europe is fiscal crises Risk Percent

(this is the risk of highest concern in Cyberattacks 100
Across Europe,8 the risks that four countries and is among the top
stand out as being of great concern five in 26 countries); although fiscal Asset bubble 100
for doing business are all in an consolidations are starting to pay Energy price shock 50
economic category. Unemployment off, government debt in advanced
or underemployment is mentioned as economies is projected to aggregate at Fiscal crises 50
the risk of highest concern for doing 104.2% of GDP in 2016, much higher Failure of critical
business in 12 countries in Europe than the pre-crisis level of 71.6% in infrastructure 50
and is among the top five risks in 25 2007.12
Part 4

Failure of climate
countries (Table 4.1).
Although the extent of concern about change adaptation 50
cyberattacks is somewhat lower than Terrorist attacks 50
Table 4.1: Europe: Percentage of the above-mentioned risks (this risk is
Economies in which a Risk Appears among the top five of highest concern Data fraud or theft 50
among the Top Five of Highest
in 12 countries), it is of high concern in
Concern for Doing Business Note: 2 economies considered
Estonia, Germany, the Netherlands and
Risk Percent Switzerland. Given the cross-border
nature of cyberspace, there is obvious Energy price shock to the global
Fiscal crises 67 economy tops the list of concerns in
potential for cyberattacks to have
Unemployment or ramifications well beyond the countries Canada, with the commodity price
underemployment 64 in which they occur. drop hurting the Canadian economy
and GDP growth projected to be
Failure of financial around 1% in 2015, compared with
mechanism or institution 62 North America
2.4% in 2014.16 The risks of asset
Energy price shock 56 In North America, which includes bubble and cyberattacks come second
the United States and Canada, two and third in Canada (fifth and first in the
Asset bubble 51
risks have been selected as being United States, respectively).
Note: 39 economies considered among the five of highest concern
for doing business in both countries: Asia and the Pacific
Unemployment threatens to de-skill an cyberattacks and asset bubbles
entire generation in parts of Europe, (Table 4.2). Central Asia and Russia
further aggravating businesses’ search The end of the commodity boom,
for employees with the right type of In the United States, the top risk is the economic slowdown in Russia,
skills to compete in today’s fast-paced cyberattack, followed by data fraud the weaker-than-expected growth
global economy. These concerns are or theft (the latter is in 7th position in China and the slow recovery in
not limited to the crisis-hit Southern in Canada, which is why it scores the Eurozone are among the factors
European economies – such as 50% in Table 4.2). Interestingly, the putting pressures on Central Asia’s
Cyprus, Greece, Italy, Portugal and risks related to the internet and cyber economies.17 Although the region’s
Spain – where unemployment remains dependency are considered to be of countries feature a diverse range of
well into the double digits eight years highest concern for doing business, risks of highest concern for doing
after the crisis, well beyond a typical following recent important attacks business, the most prominent are
business cycle. They are also strong in on businesses. The United States is fiscal crises, unmanageable inflation,
countries such as Austria, Finland and extremely well connected, and ICT interstate conflicts and unemployment
France, where unemployment rates are usage is high – 87% of the population and underemployment (Table 4.3).
considerably lower although historically use the internet,13 and the country

70 The Global Risks Report 2016

 Part 1
East Asia and the Pacific Nargis, respectively.22 Executives
Table 4.3: Central Asia and Russia:
The global risks of highest concern for are concerned about the region’s
Percentage of Economies in which a
Risk Appears among the Top Five of doing business in East Asia and the vulnerability to natural catastrophes
Highest Concern for Doing Business Pacific are mainly economic: energy – earthquakes, tsunamis, volcanic
price shock and asset bubble (Table eruptions and geomagnetic storms –
Risk Percent 4.4).20 While energy price shock tops as well as man-made environmental

Part 2
Fiscal crises 100 the list only in Lao PDR and Indonesia, catastrophes, emphasizing the
it is among the top five in 12 countries. importance for business of sustainable
Unmanageable inflation 86 Many countries in the region are energy development that respects the
Unemployment or importers and soaring prices could environment. In New Zealand, the
underemployment 71 be damaging. The risk of an asset most worrisome risk for executives is
bubble ranks top in seven economies natural catastrophes, reflecting that the
Interstate conflict 71
(Australia, Cambodia, China, Hong country’s position on the Alpine Fault
Failure of financial Kong SAR, Myanmar, New Zealand makes it vulnerable to earthquakes
mechanism or institution 57 and Thailand), reflecting the recent and tsunamis. The region’s need to
equity market turmoil in China and build resilience against climate and

Part 3
Note: 7 economies considered potential spillovers into the other weather risks could also help to explain
countries from the region as well as why risks such as failure of critical
Oil-exporting countries are suffering over-evaluation of property in some of infrastructure and national governance
from lower prices and volumes of trade, the economies such as Hong Kong or rank high in some of the economies.
which negatively affects government Sydney.
revenues; and while the lower price South Asia
is helping the region’s oil importers, it Fiscal crises is among the five most With four of the region’s countries
is unlikely to make up for the effects concerning risks for 41% of executives identifying energy price shock and
on fiscal balances of weak domestic in the region. The slowdown of the three economies identifying fiscal
demand and Russia’s economic

Part 4
Chinese economy is likely to moderate crises among their top five, concern for
contraction. Rising public debt helps growth and could negatively impact doing business is centred on economic
to explain why fiscal crises are one public finances in neighbouring risks (Table 4.5).23 Unemployment and
of the top three concerns in all the countries.21 Along with these two underemployment is also among the
region’s countries. With only moderate risks, cyberattacks – the risk of highest most-cited risks in South Asia, with
economic prospects, unemployment concern for doing business in three the whole region facing the challenge
is likely to surge in the region and is economies – is further explored in the of jobless growth and vulnerable and
among the top five risks of highest deep-dives below. informal employment: vulnerable
concern in five countries. employment accounted for over three-
quarters of all employment in 2014 in
Table 4.4: East Asia and the Pacific:
A combination of factors could explain South Asia.24 Youth unemployment
Percentage of Economies in which a
the fear of unmanageable inflation Risk Appears among the Top Five of is also a concern, especially in South
in several of the region’s countries. Highest Concern for Doing Business Asia, where the rate is already four
These factors include the recent times higher than among adults and an
volatility in foreign exchange markets, Risk Percent additional 2.1 million youth will enter the
with regional currencies depreciating Energy price shock 71 labour force over the next five years.25
against the US dollar and reserve
losses;18 a second factor is the relatively Asset bubble 59
Table 4.5: South Asia: Percentage of
recent experience of hyperinflation Cyberattacks 41 Economies in which a Risk Appears
during the 1990s transition period;19 among the Top Five of Highest
and a third is the concern that weak Fiscal crises 41 Concern for Doing Business
institutions will be unable to implement Natural catastrophes 35 Risk Percent
the deep structural and fiscal reforms
necessary to foster sustainable growth. Unemployment or Energy price shock 67
underemployment 35
Failure of national
The dispute between Russia and Unmanageable inflation 35 governance 67
Ukraine, the annexation of Crimea,
and Russian military intervention in Note: 17 economies considered Fiscal crises 50
Syria are among many geopolitical
Unemployment or
developments in the region that may One of the features of the region is underemployment 50
be affecting the views of business how frequently environmental risks are
executives who mentioned the risk mentioned. For example, executives Failure of climate-
of an interstate conflict with regional in both the Philippines and Myanmar change adaptation 50
consequences. identified extreme weather events Note: 6 economies considered
as among their leading concerns, in
the wake of the recent experiences
of Typhoon Haiyan and Cyclone

The Global Risks Report 2016 71

Part 1

Failure of national governance is Middle East and North Africa a proliferation of conflicts is putting the
another leading concern, highlighting region’s geopolitical stability at stake.
the difficulties posed for business in the Executives in oil-exporting countries
region by the current unstable political in the Middle East and North Africa Sub-Saharan Africa
situation: for instance, according to the are most concerned about the risk
Corruption Perception Index, Nepal of an energy price shock (the top By 2035, Sub-Saharan Africa is
ranks 126th and Bangladesh 145th out
Part 2

concern in nine countries) (Table 4.7),29 projected to have more young

of 175 economies.26 with low prices already leading to a people reaching working age than
decline of exports and revenue, hurting the rest of the world put together.34
Latin America and the Caribbean public finances, undermining financial This demographic pressure helps
planning and ultimately threatening to to explain why unemployment and
Failure of national governance is expose often-insufficient diversification underemployment is the most
a prominent concern across Latin of the economy. concerning risk for executives in the
America and the Caribbean,27 region. Creating high-productivity,
especially in South America, Table 4.7: Middle East and North non-agricultural jobs is among the
where corruption and mistrust in Africa: Percentage of Economies in region’s biggest challenges, requiring
Part 3

the functioning of institutions are which a Risk Appears among the businesses to adapt and diversify.
increasingly compounding the Top Five of Highest Concern for Failure to reform Sub-Saharan Africa’s
difficulties of running a business (Table Doing Business labour market could fuel social
4.6). The region’s weak economic instability, another widespread concern
growth prospects and low levels Risk Percent
according to survey respondents (Table
of investment lie behind concerns Unemployment or 4.8).
about failure of critical infrastructure;28 underemployment 71
increasing investment in infrastructure
Energy price shock 71 Table 4.8: Sub-Saharan Africa:
would stimulate the economy as well as
strengthen resilience to global risks. Percentage of Economies in which a
Fiscal crises 71
Part 4

Risk Appears among the Top Five of

Terrorist attacks 64 Highest Concern for Doing Business
Table 4.6: Latin America and
Asset bubble 43 Risk Percent
the Caribbean: Percentage of
Economies in which a Risk Appears Interstate conflict 43 Unemployment or
among the Top Five of Highest underemployment 88
Concern for Doing Business Note: 14 economies considered
Energy price shock 70
Risk Percent
Unemployment or underemployment, Failure of national
Failure of national governance 55
especially among youth, is also of
governance 91
high concern in the region, with youth Failure of critical
Energy price shock 82 unemployment as high as 33% in infrastructure 45
Jordan (2013 data) and above 20%
Unemployment or Fiscal crises 39
underemployment 64
in Oman, Saudi Arabia, and Algeria.30
Informal employment is a growing Note: 33 economies considered
Profound social trend,31 adding to the potential for the
instability 59 job market situation to fuel profound
social instability – a risk that makes With fiscal pressures increasing for oil
Fiscal crises 45 and gas exporters, the risk of energy
the top five in five countries amid a
Note: 22 economies considered regional humanitarian crisis that sees price shock is prominent in executives’
neighbouring countries coping with thinking. The aggregated benefits
refugees from Syria. One in four of of lower prices for the region’s oil
The region relies heavily on exports
the world’s refugees is now Syrian, importers are likely to be offset by falls
of commodities that have declined in
with 95% located in surrounding in the prices of other commodities that
price – such as oil, gas, copper and
countries;32 in Lebanon, over a fifth of they export.35 The macroeconomic
iron – explaining the prominence of the
the population is refugees. Another climate is a related concern, especially
risk of an energy price shock among
the region’s leading concerns. Low potential cause of social disruption is fiscal crises and inflationary pressures.
commodity prices reinforce existing water crises (among the top five risks
challenges such as high public debt in four countries), a particular concern Africa’s urban population is expected
and low economic growth, and for business because water is a key to triple by 2025,36 as reflected in the
increasing the associated risk of fiscal input in many industries,33 agricultural prominence of the risk of failure of
crises. products and energy production. urban planning and pointing to the
need for more investment in urban
Finally, concerns about unemployment Unsurprisingly, the risks of terrorist infrastructure. This helps to explain why
reflect how skills mismatch and rigid attacks and interstate conflict also failure of critical infrastructure is another
labour markets are affecting business weigh on the minds of executives, as high-ranking risk: lack of infrastructure
development in the region. – both physical and virtual – is

72 The Global Risks Report 2016

 Part 1
estimated to reduce company The below deep-dives into the wage jobs and in temporary and fixed-
productivity up to 40%.37 The cost of implications for business also explore term employment. At the same time,
filling the gap in Africa’s infrastructure asset bubbles, fourth on the global technological disruptions and the move
has been estimated at around US$93 list, and cyberattacks, among the top towards automation are accelerating
billion a year.38 three risks in 18 economies. While change in the nature of work. Currently
not exhaustive, these analyses of it is estimated that by the year 2020

Part 2
mechanisms through which these nearly half of all current occupations
Deep-Dives into Five global risks affect businesses at the could be affected by advances in
national level are intended to raise robotics and machine learning.39
Global Risks awareness of the need for action.
Given the unprecedented nature and
Between them, two economic risks Unemployment or pace of these displacements, large-
account for the global risks of most Underemployment scale reforms will be needed, both
concern for doing business in half by government and business. Short-
of the 140 economies covered: Unemployment or underemployment term, reactive measures based on
unemployment or underemployment, is perceived as the global risk of past successes will not be enough: for

Part 3
and energy price shock. Third on the highest concern for doing business example, efforts to place unemployed
list is failure of national governance, in 41 countries, and is among the top youth in apprenticeships in certain
which affects businesses in many five global risks in 92 countries (Figure job categories may not be a high-
ways, including the failure to stamp out 4.2). Unemployment affects business value investment if that job category
illicit trade (Table 4.9). in multiple ways, from holding back is likely to be obsolete in five years’
economic growth to threatening social time as a result of automation or other
Table 4.9: Number of Economies in stability. With a growing mismatch disruptions, while growth comes from
which a Risk Appears as the Risk of between the skills demanded by a wholly new occupations. Three main
Highest Concern for Doing Business fast-changing jobs market and those reforms are needed.

Part 4
Risk Number possessed by unemployed workers,
businesses are struggling to recruit First, the education systems must be
Unemployment or workers with the capabilities they need. redesigned to focus on learning to
underemployment 41 Expected job growth is concentrated in learn and collaboration. As knowledge-
Energy price shock 29 occupations for which today’s workers based work will increasingly be
are inadequately prepared. handled by technology, we need to
Failure of national educate future generations in skills
governance 14 Structural unemployment has where humans can still be expected to
Asset bubble 11 increased in all major economies since outperform machines – collaboration-
the 2007 crisis. Even where growth based attributes such as teamwork,
Fiscal crises 10 has picked up, labour productivity and interaction, relationships and cultural
Cyberattack 8 job creation often have not. Layoffs sensitivity. In a more automated future,
disproportionately affected middle- value will come from emotional and
Note: out of 140 economies globally skilled jobs, while most job creation in contextual intelligence.
the recovery has taken place in lower-

Figure 4.2: Unemployment or Underemployment, rank

Rank
1 1
2
3
4
5
6
7
8
9
10
11
12
13
17
18
19 19

Source: Executive Opinion Survey 2015, World Economic Forum.

Note: The darker colour, the higher the concern.
The Global Risks Report 2016 73
Part 1

Second, while businesses must work makers because reforms are unlikely to curtailing production despite price
with educators and governments pay off within the timeframe of political declines. Another factor is the extent to
to help education systems keep up tenures. which investment will fall in response
with the needs of the labour market, to low prices, leading to a potential rise
companies must also fundamentally Energy Price Shocks to the Global in unemployment rate of oil-exporting
re-think their role as consumers of Economy countries. Key oil and gas producers
Part 2

ready-made human capital, obtaining are estimated to have cut over US$200
pre-trained talent from schools, With lower oil prices making the billion in capital expenditure on new
universities and other companies. headlines recently, the risk of energy projects, deferring oil and gas projects
Some companies understand this and price shocks to the global economy with reserves equating to 20 billion
are investing more in the continuous ranks first in 29 out of the 140 barrels of oil equivalent.40
learning, re-skilling and up-skilling of economies represented in the 2015
their employees. Given the ongoing EOS and appears in the top five risks in If current low prices continue, the
rapid changes in the skill sets 93 of them (Figure 4.3). implications for oil-exporting countries
required for many occupations, talent may be severe. For instance, oil export
management is no longer the preserve “Price shocks” can refer to either losses in 2015 are expected to reach
Part 3

of the human resources function but sudden increases or decreases in the about US$300 billion in the Gulf
will be a critical part of any company’s price of energy – whether in the form of Cooperation Council (GCC),41 which will
growth and innovation strategy – electricity, oil, natural gas or liquid fuels have a heavy impact on governments’
especially with younger cohorts of derived from these sources. From 2010 budget balances. The International
workers increasingly valuing a sense of until June 2014 world oil prices were Monetary Fund expects more than 10
purpose and diversity of experiences in fairly stable, at around $110 a barrel million people to be looking for work
their working lives. for Brent crude; since then they have by 2020 in the region’s oil-exporting
ranged between around US$45 to countries, which will challenge fiscal
Third, governments must look beyond US$60, a plunge that surprised many. sustainability over the medium term.
the education system to redesign the Natural gas prices, often indexed to A combination of rising import prices
Part 4

broader enabling environment for oil, have followed a similar trajectory. hurting the populations of many
talent. Human capital development This has resulted in significant shifts oil-producing countries and a lack of
depends on a series of interventions of wealth from oil and gas producers job opportunities may lead to social
across a person’s lifetime, including to consumers, meaning lower input instability.42
hiring and firing practices, women’s costs for industry, lower inflation and
integration, retirement policies, visa more money available to spend in other Whether demand for oil picks up
regulations, social safety nets, and, sectors. depends on factors such as whether
in particular, regulatory support for growth recovers in China and other
entrepreneurship and small and The outlook for oil prices is uncertain. emerging economies, as well as the
medium-sized enterprises – one of On the supply side, one key factor is extent to which economies become
the most under-utilized means of whether or not the Organization of less fuel intensive as a consequence
unleashing creativity, enhancing growth the Petroleum Exporting Countries of new technology and energy-
and generating employment. Such (OPEC) – and in particular Saudi Arabia efficiency measures. It is possible
areas often go neglected by policy- – will continue with its strategy of not that if prices start to recover, they

Figure 4.3: Energy Price Shock to the Global Economy, rank

Rank
1 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16 27
18

Source: Executive Opinion Survey 2015, World Economic Forum.

Note: The darker colour, the higher the concern.
74 The Global Risks Report 2016
 Part 1
could unexpectedly spike: with the (Figure 4.4). This risk captures the can be serious enough to become
current low prices leading to reduced inability to efficiently govern a nation, unsustainable in the long run.
investment and job losses, there is which is caused by or results in factors
less slack in the system to deal with such as weak rule of law, corruption, One aspect of poor governance – illicit
unanticipated demand increases.43 illicit trade, organized crime, impunity, trade – can undermine corporate
and political deadlock. Weak national brands and supply chains, because

Part 2
Such a price spike could lead to slower government is not the result only of logistics and transport sectors often
global output and disrupt business poor governance; governance is a unwittingly contribute to the spread of
models. Even many developed multi-faceted phenomenon in which illicit goods. Illicit trade is estimated to
countries are vulnerable – for example, business, civil society and the general cost the world economy up to US$2
geopolitical tensions threaten energy public also play roles. trillion, although it is difficult to quantify
security in Europe, which gets around accurately.46 Counterfeiting and piracy
a quarter of its gas from Russia.44 Still, As discussed in the most recent alone are estimated to amount to
the risks of a price spike destabilizing edition of the World Economic US$1.77 trillion in 2015,47 nearly 10% of
society are greatest in less-developed Forum’s Global Competitiveness world merchandise trade.48
economies, which are highly Report, the consequences of failures

Part 3
dependent on imports and have little of governance seriously undermine The World Economic Forum’s
scope for alternatives to take up the many countries’ competitiveness, job Meta-Council on the Illicit Economy
slack. Indeed, the risks associated creation and economic development. has published, in its State of the
with an undiversified energy sector Weak or failing national governance Illicit Economy report, a range of
are not limited to oil – for example, creates space for organized criminals suggested ways in which technological
in 2008 water shortages caused by and terrorists to profit from illegal improvements can be leveraged as
an extremely harsh winter impacted trading in humans, weapons, solutions in this space:
energy production in Tajikistan, counterfeit goods, and so on. The
which relies heavily on hydro power. cross-sector and transnational nature – Big data. Sex traffickers have

Part 4
Ramifications in that instance included of these illegal activities means they been uncovered by a collaboration
interruptions in medical care for many pose a risk to all, creating economic, among financial institutions, the
people (power shortages and cold social, and environmental damage at Thomson Reuters Foundation, and
weather deprived more than 50% of regional and global levels. New York prosecutors.49
the country’s hospitals of their water – Satellite tracking. Illegal fishing is
supply).45 Businesses face additional risks being tackled by the Eyes on the
as well as costs from operating in Seas project – a digital platform
Failure of National Governance countries affected by poor governance. that helps governments to monitor
Both the risks and the costs arise the world’s oceans, backed by the
Failure of national governance is from the difficulties of working in Pew Charitable Trusts.50
perceived as the highest risk to an unpredictable environment and
– Crowdsourcing. In combination
doing business by executives in 14 complying with international standards
with big data and satellite tracking,
economies – half of them in Latin when fragile governments do not
Global Forest Watch is enabling
America, four in Sub-Saharan Africa, themselves adhere to international
the tracking of illegal forestry
two in Eastern Europe and one in Asia regulatory regimes. These costs
operations by using crowdsourcing

Figure 4.4: Failure of National Governance, rank

Rank
1 1
2
3
4
5
6
7
8
9
10
11
12
13-16
17-20
21-23
24-27 27

Source: Executive Opinion Survey 2015, World Economic Forum.

Note: The darker colour, the higher the concern.
The Global Risks Report 2016 75
Part 1

to combine images and provide to build relationships, initiatives and countries, monetary and fiscal policy
near-real time data on the world’s mechanisms to curb the rates of illicit after the financial crisis of 2007–2008
forests.51 trade. had some success in stimulating the
– DNA analysis. A genetic library economy to minimize the depth of the
of life on Earth is being used to Asset Bubble recession. However, as post-recession
detect food fraud,52 while forensic growth proved elusive, easy monetary
Part 2

laboratories are able to link stolen Executives in 11 economies, mostly policy was maintained or even stepped
ivory to specific animals.53 in Europe and Asia, rate asset up. Low interest rates sent investors
bubbles as their highest concern; it on a search for yield, creating an
– Encryption: Although organized
ranks among the top five risks in 40 environment that is highly conducive to
criminals use encryption to evade
countries, representing more than bubbles. The impact of another bubble
detection, it can also be used
half of the world GDP (Figure 4.5). bursting now in a major economy
to enable the secure sharing
Far from affecting only speculators, would be especially damaging
of information between law
the bursting of asset bubbles hits because the weakness of the recovery
enforcement organizations and the
businesses across the whole economy and high levels of government debt
private sector.
– particularly where leverage induces mean there would be little remaining
Part 3

contagion through the banking system. policy space for further stimulus.
Individual companies can take some As business confidence falls, so do
steps to protect their own operations, consumption, incomes and investment, Asset bubbles can never be identified
reputation or assets – but for which can lead to a prolonged with certainty while they are building
businesses to build resilience against recession. up, as there is always a narrative of
the risk of failure of national governance “this time is different”. Nonetheless,
ultimately requires finding ways to The trigger for the global financial when attempting to evaluate the risk
contribute towards improving the crisis, to take one example, was a of a bubble bursting, three types of
overall situation. That includes setting widespread default on US subprime potential bubbles can be distinguished:
an example for political leaders by mortgages and loss of value of related
Part 4

upholding international best practice, securities. The bursting of the dot- – Equity bubbles. These bubbles
frameworks and standards, and com bubble in 2000–2002 destroyed are often a side effect of low
looking for ways to collaborate with US$5 trillion of stock market wealth in interest rates, as investors look
governments and civil society on the the United States (equivalent to half of to stock markets for higher yields
development of more coherent policies annual GDP) in 30 months.54 Japan than they can get from fixed
and smart governance strategies. was mired in a low-growth deflationary income assets. Companies can
It is clear that the problem cannot environment for over two decades use their highly-valued stock to
be resolved with policies alone, but after this combined real estate and make cross-border acquisitions
requires the support of the business stock market bubbles burst in the early – but when the bubble bursts,
sector as well as awareness of the 1990s. they can in turn become takeover
general public. Discussions need to targets for companies in other
move beyond political commitment – Recent global economic developments countries.
the public sector, private sector and have increased both the likelihood and
civil society need to come together potential impact of bubbles. In many

Figure 4.5: Asset Bubble, rank

Rank
1 1
2
3
4
5
6
7
8
9
10
11
12
13-16
17-20
21-24
25-27 27

Source: Executive Opinion Survey 2015, World Economic Forum.

Note: The darker colour, the higher the concern.
76 The Global Risks Report 2016
 Part 1
– Real estate bubbles. Real estate The bursting of any of these three also opened the door to a growing
bubbles are not usually a major types of bubble can tip an economy wave of cyberattacks – including
concern for companies while they into recession. For consumer-facing economic espionage, cybercrime, and
are inflating, though they make businesses without regional or global even state-sponsored exploits – that
office and factory space more diversification, this is a concern that is are increasingly perpetrated against
expensive. However, because not easily mitigated. Besides shoring businesses (Figure 4.6). In 2014, The

Part 2
banks play a major role in real up the balance sheet – for example, by Center for Strategic and International
estate finance, the bursting of issuing long-dated debt – and putting Studies and McAfee estimated that
a real estate bubble can have adequate credit lines in place, most cybercrime alone cost the global
catastrophic impacts on business mitigation mechanisms would be economy US$ 445 billion.56 Businesses
finance, as seen recently in Ireland: more strategic and affect the business in all industries and of all sizes have
with banks struggling, credit can model, such as alliances to tap more been affected by the increased
dry up completely and companies diversified markets. complexity, novelty and persistence
find it hard to finance their of cyberattacks, with consequences
operations. From a policy perspective, some ranging from the reputational to
– Government bond bubbles. studies suggest that the development economic and legal. A sharp increase

Part 3
Government bonds might be of financial markets – with increased in high-profile cases in 2014 has
inflated by a quantitative easing integration, sophistication of trading continued into 2015, and shows no
of purchases by central banks techniques, and removal of frictions sign of slowing down.
and new liquidity requirements to arbitrage – may be increasing the
increasing demand among private prevalence of bubbles.55 A fundamental The EOS results indicate that
sector banks. As prices are rethink of regulation and contract cyberattack is perceived as the
pushed up, yields go down, which design in financial markets could be risk of highest concern in eight
drives investors into higher-yield necessary, to accept the inevitability of economies: Estonia, Germany, Japan,
corporate bonds, raising the risk bubbles and seek to limit their scope. Malaysia, the Netherlands, Singapore,

Part 4
of a bubble here, too. In the short Switzerland, and the United States.
term, this can be good news for Cyberattacks Public sector bodies in at least two of
corporate issuers – but the ending these countries have recently been
of quantitative easing programmes From personal finances to business disrupted by cyberattacks: the US
could rapidly make it harder for operations and national infrastructure, Office of Personnel Management and
businesses to raise capital. Some public and private services and the Japanese Pension Service. The
observers have raised concerns amenities are increasingly managed via 2015 Fortune 500 CEO survey found
about whether current market some form of computer network and that cyber security came second
structures can deal with the are consequently vulnerable to attack. when CEOs were asked about their
resulting large swings in demand The Internet of Things is a growing companies’ biggest challenges.57
for bonds, potentially triggering reality, introducing new efficiencies
severe volatility in the financial as well as new vulnerabilities and Attempts to detect and address attacks
system. interconnected consequences. Recent are made harder by their constantly
technological advances have been evolving nature, as perpetrators quickly
beneficial in many respects, but have find new ways of executing them.

Figure 4.6 Cyberattacks, rank

Rank
1 1
2
3
4
5
6
7
8
9
10
11
12
13-16
17-20
21-24
25-28 28

Source: Executive Opinion Survey 2015, World Economic Forum.

Note: The darker colour, the higher the concern.
The Global Risks Report 2016 77
Part 1

Businesses trying to match this speed It is also becoming clearer that

in their development of prevention and cybercrime cannot be fought
response methods are sometimes unilaterally. Although businesses can
constrained by a poor understanding follow standard industry practices
of the risk, a lack of technical talent, or adopt individually tailored ways to
and inadequate security capabilities. deal with cybercrimes, cooperation
Part 2

Although CEOs worry about rising throughout the value chain (because
cyber risks, the ownership of and attacks can be made through supplier
responsibility for the cyber risk is less systems) and with law enforcement
clear. Who in the corporation is the is also helpful, As is often the case,
actual owner of the risk? While there however, public-private partnership
are many “C” level owners (CISO, can be held back by lack of trust and
CFO, CEO, CRO, Risk Management), misaligned incentives. Businesses may
each of these owners has differing but fear exposing their data and practices
related interests and unfortunately often to competitors or to law enforcement
does not integrate risk or effectively agencies. And the private sector’s
Part 3

collaborate on its management. primary interest in rapid recovery and

Defining clear roles and responsibilities continuity of business operations
for cyber risk is crucial. may not align with the public sector’s
primary interest in apprehending
Outdated laws and regulations inhibit and prosecuting perpetrators. In
governments’ ability to capture addition, governments need to balance
criminals but also to expedite their investments in cyber offensive
the often lengthy procedure of weapons and efforts to enhance
elaborating and implementing legal capabilities for cybersecurity and
and regulatory frameworks to reflect defence.
Part 4

evolving realities. The sophisticated

threats of government-sponsored
economic espionage also exceed Conclusions
the defensive capabilities of many
commercial enterprises, which are Addressing global risks lies beyond
more and more frequently looking to the capacity of individual businesses.
other governments to intervene. The Businesses need to strengthen
G-20 recently took an unexpected, their resilience to ensure continued
but applauded, step and collectively operation and survival in the face
affirmed “that no country should of risks. At the same time, the clear
conduct or support ICT-enabled theft role for collaboration among public
of intellectual property, including trade and private sector actors becomes
secrets or other confidential business evident, for example, to develop better
information, with the intent of providing cybercrime prevention methods, to
competitive advantages to companies establish cybersecurity norms for
or commercial sectors.”58 both governments and industry, and
to align international approaches to
Businesses are increasingly accepting enforcement and establish industry
the fact that they cannot hope to norms. Above all, it is in the key interest
prevent all cyberattacks. The difficulty of businesses to find new ways to
in preventing attacks is not outmatched partner with governments to address
by the difficulty in identifying and global risks. Many risks, ranging from
effectively mitigating them. Given energy security to unemployment, can
the types of vulnerabilities utilized only be addressed through diverse
by attackers and their methods, stakeholders recognizing the need for
many attacks and intrusions are not joint action. Such collaboration requires
immediately discovered – some are the identification of key risks and
recognized only months and in some related interests and strong alignment
cases years later. The emphasis needs and robust agreement among business
to be on streamlining mechanisms for and other stakeholders on the need to
early detection, response and recovery, address them.
to mitigate and better manage the
consequences – limiting the damage,
and ensuring business continuity.

78 The Global Risks Report 2016

 Part 1
Endnotes 29
Middle East and North Africa includes Algeria, Bahrain, Egypt, the Islamic Republic
of Iran, Israel, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia,
1
The results presented thus far are drawn from the Global Risks Perception Survey; Tunisia and the United Arab Emirates.
the results presented here in Part 4 are derived from another survey, the Executive 30
World Development Indicators, World Bank, retrieved 21 October 2015 from
Opinion Survey (see Appendix C). http://data.worldbank.org/indicator/SL.UEM.TOTL.ZS/countries
2
UNCTAD 2014; UNCTAD 2015. 31
ILO 2015.

Part 2
3
UNCTAD 2015. 32
UNHCR (The UN Refugee Agency). Facts and Figures about Refugees, available
4
Athukorala and Menon 1997; Baldwin 2011. at http://www.unhcr.org.uk/about-us/key-facts-and-figures.html
33
5
Research from the Fukushima event has shown that although just 3% of total Kochhar et al. 2015.
companies were directly affected, this figure increased to 50–60% for second-order 34
Sub-Saharan Africa include Benin, Botswana, Burundi, Cameroon, Cape Verde,
companies and to 90% for third-order companies. See Saito 2012. Chad, Côte d’Ivoire, Ethiopia, Gabon, Gambia, Ghana, Guinea, Kenya, Lesotho,
6
UNCTAD 2015. Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia,
Nigeria, Rwanda, Senegal, Seychelles, Sierra Leone, South Africa, Swaziland,
7
Tables 4.1 to 4.8 present a selection of risks that are among the five risks of highest Tanzania, Uganda, Zambia and Zimbabwe. See IMF 2015d.
concern in each region (i.e. risk selected based on the highest number of countries in
35
the region in which the risk is among the top five and country-level data are available IMF 2015d.
at www.weforum.org/risks). 36
UN DESA 2015.

Part 3
8
Europe includes Albania, Austria, Belgium, Bosnia and Herzegovina, Bulgaria, 37
African Development Bank Group 2011.
Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, 38
Foster and Briceño-Garmendia 2010 was a part of the Africa Infrastructure
Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Macedonia,
Country Diagnostic (AICD) project by the World Bank and co-sponsored by ICA
Malta, the Republic of Moldova, Montenegro, the Netherlands, Norway, Poland,
partners.
Portugal, Romania, Serbia, the Slovak Republic, Slovenia, Spain, Sweden,
39
Switzerland, Turkey, Ukraine and the United Kingdom. Frey and Osborne 2013.
9 40
Unemployment rate for 2015 (IMF estimates): Austria: 5.8%, Finland: 9.5%, Adams 2015.
France: 10.2%, Greece: 26.8%, Italy: 12.2% and Spain: 26.1%. Retrieved on 22 41
IMF 2015c.
October 2015 from http://www.imf.org/external/pubs/ft/weo/2015/02/weodata/
42
weorept.aspx?pr.x=66&pr.y=5&sy=2013&ey=2020&scsm=1&ssd=1&sort=country&d IMF 2015a.
s=.&br=1&c=122%2C172%2C132%2C184%2C174%2C136&s=LUR&grp=0&a= 43
Randall 2014.
10
2013 data are from the World Development Indicators, Unemployment, youth

Part 4
44
The Economist 2014.
total (% of total labour force ages 15–24) (modelled ILO estimate). Retrieved on 22
45
October 2015 and available at http://data.worldbank.org/indicator/SL.UEM.1524.ZS WHO 2008.
46
11
The unemployment rate for 2015 (IMF estimates): Bosnia and Herzegovina: 27% UNODC 2011.
and Serbia: 20.6%. Retrieved on 06 November 2015 from http://www.imf.org/ 47
See the ICC-BASCAP study commissioned by Frontier Economics (Foster
external/pubs/ft/weo/2015/02/weodata/weorept.aspx?pr.x=34&pr.y=3&sy=2013&ey Economics 2011).
=2020&scsm=1&ssd=1&sort=country&ds=.&br=1&c=943%2C963%2C960%2C94 48
WTO 2015.
2&s=LUR&grp=0&a=
49
12 Anderson 2014.
IMF 2015f.
50
13 The Economist 2015.
World Bank: Internet users (per 100 people). “Internet users” are individuals who
51
have used the internet (from any location) in the last 12 months. Internet can be used Sizer, Cheung, and Anderson 2014.
via a computer, mobile phone, personal digital assistant, games machine, digital 52
Neimark 2015.
TV etc. Retrieved on 11 November 2015 from http://data.worldbank.org/indicator/
53
IT.NET.USER.P2?order=wbapi_data_value_2014+wbapi_data_value+wbapi_data_ BBC News 2015.
value-last&sort=desc. 54
Gaither and Chmielewski 2006.
14
World Economic Forum 2015. 55
Jones 2015.
15
Homeland Security Committee 2015. 56
McAfee, Inc. 2014.
16
IMF 2015f. 57
Fortune Editors 2015.
17
Central Asia includes Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, the 58
Cabinet of Prime Minister Trudeau, Canada, 2015.
Russian Federation and Tajikistan. See IMF 2015e.
18
IMF 2015e.
19
Roaf et al. 2014.
20
East Asia and the Pacific includes Australia, Cambodia, China, Chinese Taipei,
Hong Kong SAR, Indonesia, Japan, the Republic of Korea, Lao People’s Democratic
Republic, Malaysia, Mongolia, Myanmar, New Zealand, the Philippines, Singapore,
Thailand, and Vietnam.
21
IMF 2015b.
22
Guha-Sapir, Hoyois, and Below 2014; UNISDR 2015.
23
South Asia includes Bangladesh, Bhutan, India, Nepal, Pakistan and Sri Lanka.
24
“Vulnerable employment” is defined by the ILO as “the share of own-account work
and contributing family employment, categories of work typically subject to high
levels of precariousness”; see ILO 2015.
25
ILO 2015.
26
See Transparency International’s Corruption Perception Index, 2014 results.
Available at http://www.transparency.org/cpi2014/results
27
Latin America and the Caribbean includes Argentina, Bolivia, Brazil, Chile,
Colombia, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Guatemala,
Guyana, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru,
Trinidad and Tobago, Uruguay and Venezuela.
28
IMF 2015g.

The Global Risks Report 2016 79

Part 1

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Part 2
Part 3
Part 4

The Global Risks Report 2016 81

Conclusions
The 11th edition of The Global Risks
Report has explored how global risks
are becoming increasingly imminent
and materializing in new and
sometimes unexpected ways. From
climate change to the imperative for
improved water governance, from
large-scale involuntary migration to
reviving growth in the Fourth Industrial
Revolution, global risks are affecting the
lives of citizens and the functioning of
institutions and economies. We now
need to move beyond mitigation to
adaptation and building resilience.
Understanding the drivers of the global
security landscape, boosting
governance and strengthening policy
agility is ever more important. Building
a better understanding of how the new
security landscape and technological
change will impact countries,
economies and peoples’ lives is,
therefore, essential for building
sustainable, resilient growth strategies
and stable societies.

Global risks remain beyond the domain

of just one actor, highlighting the need
for collaborative and multistakeholder
action – the key message that The
Global Risks Report series has
highlighted over the past decade.
Recognizing joint interests and aligning
stakeholders on key priorities across
the different areas of global risks is the
first step to make action through
collaboration happen. We hope that
this Report will contribute to
recognizing the need for action, create
an imperative towards greater
resilience, and motivate change and
concrete action towards a better future
for everyone.

82 The Global Risks Report 2016

The Global Risks Report 2016 83
Appendices

84 The Global Risks Report 2016

Appendix A: Description of Global Risks and Trends 2016

Global Risks
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.

Global Risk Description

Unsustainably overpriced assets such as commodities,

Asset bubble in a major economy
housing, shares, etc. in a major economy or region.
Prolonged ultra-low inflation or deflation in a major
Deflation in a major economy
economy or region.

Collapse of a financial institution and/or malfunctioning of a

Failure of a major financial mechanism or institution
financial system impacts the global economy.

Failure to adequately invest in, upgrade and secure

infrastructure networks (e.g. energy, transportation and
Failure/shortfall of critical infrastructure
communications) leads to pressure or a breakdown with
system-wide implications.
Excessive debt burdens generate sovereign debt crises
Fiscal crises in key economies
and/or liquidity crises.
Economic Risks

A sustained high level of unemployment or underutilization

of the productive capacity of the employed population
High structural unemployment or underemployment
prevents the economy from attaining high levels of
employment.
Large-scale activities outside the legal framework such
as illicit financial flow, tax evasion, human trafficking,
Illicit trade (e.g. illicit financial flow, tax evasion,
counterfeiting and organized crime undermine social
human trafficking, organized crime, etc.)
interactions, regional or international collaboration and
global growth.
Energy price increases or decreases significantly and
Severe energy price shock (increase or decrease) places further economic pressures on highly energy-
dependent industries and consumers.
Unmanageable increase in the general price level of goods
Unmanageable inflation
and services in key economies.
Major property, infrastructure and environmental damage
Extreme weather events (e.g. floods, storms, etc.)
as well as human loss caused by extreme weather events.
Governments and businesses fail to enforce or enact
effective measures to mitigate climate change, protect
Failure of climate-change mitigation and adaptation
populations and help businesses impacted by climate
change to adapt.
Environmental Risks

Irreversible consequences for the environment, resulting

Major biodiversity loss and ecosystem collapse (land
in severely depleted resources for humankind as well as
or ocean)
industries.
Major property, infrastructure and environmental damage
Major natural catastrophes (e.g. earthquake, as well as human loss caused by geophysical disasters
tsunami, volcanic eruption, geomagnetic storms) such as earthquakes, volcanic activity, landslides, tsunamis
or geomagnetic storms.
Failure to prevent major man-made catastrophes, causing
Man-made environmental catastrophes (e.g. oil spill,
harm to lives, human health, infrastructure, property,
radioactive contamination, etc.)
economic activity and the environment.

The Global Risks Report 2016 85

 Global Risk Description

Failure of national governance (e.g. failure of rule of Inability to govern a nation of geopolitical importance due
law, corruption, political deadlock, etc.) to weak rule of law, corruption or political deadlock.
A bilateral or multilateral dispute between states escalates
Interstate conflict with regional consequences into economic (e.g. trade/currency wars, resource
nationalization), military, cyber, societal or other conflict.
Geopolitical Risks

Individuals or non-state groups with political or religious

Large-scale terrorist attacks goals successfully inflict large-scale human or material
damage.
State collapse of geopolitical importance due to internal
State collapse or crisis (e.g. civil conflict, military
violence, regional or global instability, military coup, civil
coup, failed states, etc.)
conflict, failed states, etc.
Nuclear, chemical, biological and radiological technologies
Weapons of mass destruction and materials are deployed creating international crises
and potential for significant destruction.
Poorly planned cities, urban sprawl and associated
Failure of urban planning infrastructure create social, environmental and health
challenges.
Access to appropriate quantities and quality of food and
Food crises nutrition becomes inadequate, unaffordable or unreliable
on a major scale.
Large-scale involuntary migration induced by conflict,
Large-scale involuntary migration
disasters, environmental or economic reasons.
Societal Risks

Major social movements or protests (e.g. street riots, social

Profound social instability unrest, etc.) disrupt political or social stability, negatively
impacting populations and economic activity.
Bacteria, viruses, parasites or fungi cause uncontrolled
spread of infectious diseases (for instance due to
Rapid and massive spread of infectious diseases
resistance to antibiotics, antivirals and other treatments)
leading to widespread fatalities and economic disruption.
A significant decline in the available quality and quantity of
Water crises fresh water resulting in harmful effects on human health
and/or economic activity.
Intended or unintended adverse consequences of
technological advances such as artificial intelligence,
Adverse consequences of technological advances
geo-engineering and synthetic biology causing human,
environmental and economic damage.
Technological Risks

Cyber dependency increases vulnerability to outage of

Breakdown of critical information infrastructure and
critical information infrastructure (e.g. internet, satellites,
networks
etc.) and networks causing widespread disruption.
Large-scale cyberattacks or malware causing large
Large-scale cyberattacks economic damages, geopolitical tensions or widespread
loss of trust in the Internet.
Wrongful exploitation of private or official data that takes
Massive incident of data fraud/theft
place on an unprecedented scale.

86 The Global Risks Report 2016

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.

Trend Description

Ageing populations in developed and developing countries driven by declining fertility

Ageing population
and decrease of middle and old age mortality.

Changing landscape of Changing landscape of global or regional institutions (e.g. UN, IMF, NATO, etc.),
international governance agreements or networks.

Change of climate which is attributed directly or indirectly to human activity that alters
Climate change
the composition of the global atmosphere, in addition to natural climate variability.

Environmental Deterioration in the quality of air, soil and water from ambient concentrations of
degradation pollutants and other activities and processes.

Growing middle class in Growing share of population reaching middle-class income levels in emerging
emerging economies economies.

Increasing national Increasing national sentiment among populations and political leaders affecting
sentiment countries’ national and international political positions.

Increasing polarization of Inability to reach agreement on key issues within countries because of diverging or
societies extreme values, political or religious views.

Increasing rates of non-communicable diseases, also known as chronic diseases,

Rise of chronic diseases leading to long-term costs of treatment and threatening recent societal gains in life
expectancy and quality.

Rise of cyber Rise of cyber dependency due to increasing digital interconnection of people, things and
dependency organizations.

Rising geographic Increasing mobility of people and things due to quicker and better-performing means of
mobility transport and lowered regulatory barriers.

Rising income and wealth

Increasing socio-economic gap between rich and poor in major countries or regions.
disparity

Shifting power from state to non-state actors and individuals, from global to regional
Shifts in power
levels, and from developed to emerging market and developing economies.

Urbanization Rising number of people living in urban areas resulting in physical growth of cities.

The Global Risks Report 2016 87

Appendix B: Global Risks Perception Survey and
Methodology 2015

Definitions and widespread misuse of Raw responses were cleaned in order

technologies (e.g. 3D printing, artificial to improve overall data quality and
The Global Risks Report 2016 is based intelligence, geo-engineering, synthetic completeness. All questionnaires with a
on the same methodology adopted in biology, etc.) was reformulated into the completion rate below 50% were
the previous year and results are risk “Adverse consequence of dropped, reducing the number of
therefore largely comparable. The technological advances”. The definition available responses from 933 to 742.
Report adopts the following definitions of each risk also went through a review The respondents did not provide any
of global risk and trend: process. information about their gender or the
sector in 3 and 49 cases, respectively,
Global risk: an uncertain event or The following section describes the but it was possible to infer this
condition that, if it occurs, can cause survey and methodology in greater information from the rest of the records
significant negative impact for several detail. provided for the gender and for 39
countries or industries within the next cases for the sector. Similarly, 92
10 years. The Global Risks respondents did not indicate the region
in which they are based and 77 were
Trend: a long-term pattern that is
Perceptions Survey manually assigned to a region on the
currently taking place and that could basis of their country of residence.
contribute to amplifying global risks The Global Risks Perception Survey
and/or altering the relationship between (GRPS), discussed in Part 1, is the main Figure B.1 presents the profile of the
them. instrument used to assess global risks 742 survey respondents remaining in
in this Report. The survey was the sample. To capture the voice of
The list of risks and trends assessed in conducted between mid-September youth, the survey also targeted the
the Global Risks Perception Surveys and the end of October 2015 among World Economic Forum’s community of
has changed slightly. The risk “Illicit the World Economic Forum’s Global Shapers.1 Respondents under
trade” was extracted from the risk multistakeholder communities of 30 accounted for slightly more than
“Failure of national governance” to leaders from business, government, one-fourth of total respondents.
create another risk in the economic academia and non-governmental and
category. Moreover, the risk “Massive international organizations.

Figure B.1: Survey Sample Composition

Number of participants Expertise Organization

742
Geopolitics
type
14.6%
Academia
15.6%
Government
Society Business NGO 11.1% 1.23%
23.8% 44.7% 16.2%
Economics
34.5%
Gender
International organizations
Technology 8.6%
17.9%
Environment
9.2% Other
3.8%
Male Female
68.9% 31.1%

Central Asia
including Russia
Europe
Age distribution Region 32.2%
2.3%

North America East Asia

17.7%
and the Pacific
12.5%
Middle East
and North Africa
6.5%

Latin America Oceania

26.3% 21.4% 18.6% 19.1%
19.1% 8.2% 6.3% and the Caribbean 1.2%
12.8% South Asia
<30 30–39 40–49 50–59 60–69 >70 Sub-Saharan Africa 5.9%
8.8%

Source: Global Risks Perception Survey 2015.

Note: Reported shares are based on number of valid responses: Gender: 742 responses; Expertise: 726; Organization type: 732; Age distribution: 742; Region: 727.

88 The Global Risks Report 2016

Analysis Similarly, for the Risks-Trends above); the biggest trend is the one
Interconnections Map 2016 considered to be the most important in
The Global Risks Landscape 2016 respondents had to identify up to three shaping global development.
(Figure 1) trends that they consider important in
shaping the global agenda in the next The placement of the nodes in the
Respondents were asked to assess the 10 years and the three risks that are Global Risks-Trends Interconnections
likelihood and global impact of each of driven by each of those trends. For Map was computed using ForceAtlas2,
the 29 risks. For each risk, they were completeness, the two questions read a force-directed network layout
asked, “How likely is this risk to occur “From the list of trends below, which are algorithm implemented in Gephi
globally within the next 10 years?” and the three most important trends that will software, which minimizes edge lengths
“What is the estimated impact globally if shape global development in the next and edge crossings by running a
this risk were to materialize? (Impact is 10 years”; and “For each of the three physical particle simulation.2
to be interpreted in a broad sense trends identified in [the previous
beyond just economic consequences)”. question], select up to three risks from Global Risks of Highest
N1i Concern in
The possible answers ranged from 1 the list below that are most strongly 2016 (Figure 1.2) 1
likelihoodi � � likelihoodi,n
(“very unlikely” and “low” impact, driven by these trends”. The information Ni
n=1
respectively) to 7 (“very likely” and “high” thereby obtained was used to construct Although the Report generally looks at
impact, respectively). the Risks-Trend Interconnections Map global risks on a time horizon of 10
2016. years, respondents were asked to
Respondents were given the possibility identify the risks of highest concern
N2i
to choose a “Don’t know” option if they In both cases, a tally was made of the within two different 1 timeframes: 18
months andimpact
10i =years.
� impact
To identify the top
felt unable to provide an informed number of times each pair was cited. Ni i,n
n=1
answer. Respondents could also leave This value was then divided N1i
by the five global risks of highest concern
the question completely blank. For each count of the most frequently
1 cited pair. described in Part 1, respondents
likelihoodi � � likelihoodi,n answered the following question: “In this
risk, partial responses, i.e. those As a final step, the Nsquare
i root of this
n=1
assessing only the likelihood or only the ratio was taken to dampen N1i the long-tail survey, we are looking at risks within the
impact, were dropped. A simple effect (i.e. a few very 1 strong links, and next 10 years. For this question
∑Nn=1 pairij,n
only,
likelihoodi � N � likelihoodi,n
average for both likelihood and impact many weak ones) and i
n=1to make the
pleaseinterconnection
select the five ij =� global risks that
pairmax
for each of the 29 global risks was differences more apparent across the you believe to be of most concern within
N2i
calculated on this basis. Formally, for weakest connections. 1 Out of the 406 the next 18 months and 10 years,
any given risk i, its likelihood and impact, impact
possible pairs ofi =risks,
Ni
� 167 impactori,n41% were respectively”. N1i
N1i 1
denoted respectively 1 likelihoodi and not cited. Similarly, out n=1
Ni 2 of the possible likelihoodi � � likelihoodi,n
N
impactlikelihood
, are: i � Ni � likelihoodi,n For any given risk i ifrom
n=1 the list of 29
N
i
377 trend-risk combinations,
1 33 or 9% pairmax = max ( � pairij,n )
n=1 impacti = � impacti,n risks, we obtained
ij the n=1
share of total
N1i were not cited. Formally,
Ni the intensity of
1 n=1
likelihoodi � � likelihoodi,n the interconnection between risks i and j respondents (N = 742) that have
Ni (or between trend i and ∑ risk
N j), denoted declared to be concerned about that
n=1 n=1 pairij,n
interconnection
interconnection ij =� pair to:
,ij corresponds risk: N2i
N2i max
1 N
1 impacti = �1 impacti,n
impacti = � impacti,n ∑N
n=1 pairij,n
% concernNi i = ��ci,n �
Ni interconnectionij =� N
n=1
n=1
n=1
N2i
pairmax
where Ni is 1
the number
impact of respondents
i = N � impacti,n
with ci,n ∈ {0,1} and equal to 1 if
N
for risk i, and likelihood
i
n=1 i,n and impacti,n pairmax = max ( � pairij,n ) respondent N selected risk i as a risk of
are respectively the likelihood and ij n=1 concern. The risks with∑Nthe Nr five highest
pair
impact assigned by respondent ∑N pairij,nn to risk sharesinterconnection
were selected 1asn=1
ij =�
ij,n
the risks of
interconnectionij =� n=1 where N is the number of
N
respondents. % likelihoodir = pair
��l i,n �
max
i and measured on a scale from
pair max 1 to 7. pairmax = max ( � pairij,n ) most concern. Nr
ij n=1
n=1
Ni is the number of respondents for risk i
∑Nn=1 pairij,n and Variable pairij,n is 1 whenNrespondent n
who assessed both ijthe
interconnection =� likelihood 1 The Most Likely Global Risks 2016: A
pairmax selected the pair of irisks
% concern = ��c i andi,n �j as part
impact of that risk. N Regional Perspective (Figure 3)
of his/her selection. Otherwise,
n=1 it is 0.
Nj N
N The value of the interconnection
1
N
max1( � pair
pairmax =respondents ij,n ) asked
The Global Risks
pairmax = maxInterconnections
( � pairij,n ) %the
concern � In the survey,
% Cij =ij ��c n=1i,n �
were
determines i = N ��c
thickness of i,neach Nr risks
Map 2016 (Figure ij 2) and
n=1 The Risks- to identify up to three n=1 that were the
connecting line in the graph, with the
n=1
Trends Interconnections Map 2016 most likely to occur in the region in
N
most frequently cited pairNrhaving the
(Figure pair
4) max = max ( � pairij,n ) 1 which they are based.3
ij n=1 thickest line.
% likelihoodir = ��li,n �
Nr N
N n=1 1
To draw the Global Risks 1 Nr For any given risk i ifrom
% concern = ��cthei,nlist
� of 29
% concern = ��c i,n �1, survey
In the Global Risks Landscape 1 and N
Interconnections MapNin Part
i risks, we obtained the n=1 share of
n=1 Risks-Trends ir = N ��li,n � Maps,
Interconnections
% likelihood
respondents were asked to answer the r respondents from region r (Nr) who think
N
1your view, which the size of each risk is scaled n=1 according
following question: “In
% concerni = ��ci,n � that risk i is the most likely to occur in
Nconnected to the “weighted degree” N j of that node in
are the most strongly 1 their region:
n=1 the system. Moreover,
% Cij = ��c in the
i,n � Risks-
risks? Please select at least three pairs Nr Nr
Nr Trends Interconnections n=1 Map, the size 1
and up to six pairs from 1 the 29 risks Nj % likelihoodir = ��li,n �
��li,n � of the trend represents the perception of Nr
below (one risk canir =beNrconnected
% likelihood to % C =
1
��c � n=1
n=1 its importance inij shaping
Nr global
i,n
any one of the other 28 risks)”.
Nr n=1
1 development (answer to the first part of with li,n ∈ {0,1} and equal to 1 if
% likelihoodir = ��li,n � the question on trend as explained respondent N selected risk i.
Nr
n=1
Nj
Nj 1 Global Risks Report 2016
The 89
1 % Cij = ��ci,n �
% Cij = ��ci,n � Nr
Nr n=1
n=1
Appendix C: The Executive and Opinion Survey 2015: Views of
the Business Community on the Global Risks of
Highest Concern for Doing Business

Every year since 1979 the World Interested readers can visit the portal at
Economic Forum has conducted the http://wef.ch/risks2016 to access the
Executive Opinion Survey (EOS). This results for individual economies and
survey captures invaluable information regions.
on a broad range of socio-economic
issues. In the 2015 edition, over 13,000
N1i
executives in 140 economies were
1
surveyed. 4
likelihoodi � � likelihoodi,n
Ni
n=1

The 2015 edition of the EOS, conducted

between February and June 2015,
included a question on the risks of
2
highest concern forNi the second time.
1
More specifically,
impacti = respondents
� impacti,n were
Ni
asked to select the five global risks that
n=1

they believe to be of most concern for

doing business in their country within
the next 10 years.
∑N
n=1 pairij,n
interconnection
The list of 28 globalij =�
riskspair
presented in
max
the EOS is derived from the list of global
risks of The Global Risks Report 2015
and is almost similar to the global risks
of The Global Risks Report 2016 (see
N
Appendix B for the differences
pairmax = max ( � pairij,n )
in global
risks between the ij twon=1editions). The
size and nature of the EOS and the
GRPS respondents differed
significantly: they comprised a
N
multistakeholder group 1 of experts in the
% concerni = ��ci,n �
case of the GRPS and N business
n=1
executives in the case of the EOS. The
EOS results provide a complementary
perspective – that of businesses on the
impact of global risks on Nr their
businesses. 1
% likelihood = ��l �
ir i,n
Nr
n=1
Formally, for each country j the share of
respondents selecting each global risk i
is:
Nj
1
% Cij = ��ci,n �
Nr
n=1

where Nj is the sample size of the

country j and ni,j is the number of
respondents who selected the risk i in
their five global risks of highest concern
for doing business in country j. Ci,j is the
share of respondents who selected risk
i in country j.

90 The Global Risks Report 2016

Endnotes
1
The Global Shapers Community is a network of hubs developed and led by young
people who are exceptional in their potential, achievement and drive to make a
contribution to their communities; see http://www.weforum.org/community/global-
shapers
2
3 See Jacomy et al. 2012.
3
Respondents indicated the region in which they were based from the following list:
Europe, Central Asia including Russia, East Asia and Pacific, South Asia, Sub-Saharan
Africa, Middle-East and North Africa, Latin America and the Caribbean, North America,
and Oceania.
4
For more information about the Survey, see Browne et al. 2014.

References
Browne, C., A. Di Battista, T. Geiger, and T. Gutknecht. 2014. “The Executive Opinion
Survey: The Voice of the Business Community”. The Global Competitiveness Report
2015–2016. Geneva: World Economic Forum. 75–85.

Jacomy, M., S. Heymann, T. Venturini, and M. Bastian. 2012. “ForceAtlas2: A

Continuous Graph Layout Algorithm for Handy Network Visualization”.

The Global Risks Report 2016 91

Acknowledgements
The Global Risks Report 2016
synthesizes the insights, ideas and
contributions of many individuals
through workshops, group calls and
research. The World Economic Forum
is grateful to all who took part in the
challenge to think about global risks.
Without their dedication, guidance and
support, it would not have been
possible to develop this Report.

The World Economic Forum would like

to thank our Strategic Partners Marsh
& McLennan Companies and Zurich
Insurance Group for their guidance,
input and support. We also thank our
academic advisers, the National
University of Singapore, the Oxford
Martin School at the University of
Oxford and the Wharton Risk
Management and Decision Processes
Center at the University of
Pennsylvania.

The project was led at the World

Economic Forum by Margareta
Drzeniek Hanouz and The Global Risks
Report 2016 team including Gaëlle
Marti (Project Manager), Caroline
Galvan (Content Lead), Ciara Browne
(Partnerships), Attilio Di Battista, and
Stéphanie Verin.

The Global Risks Report 2016

governance is represented by the
Steering Board, the Advisory Board
and the Activation Board, all of which
have provided invaluable input and
guidance.

The Steering Board includes:

John Drzik, President, Global Risk and
Specialties, Marsh, United States
Richard Samans, Head of the Centre
for the Global Agenda, Member of the
Managing Board, World Economic
Forum, Switzerland
Cecilia Reyes, Chief Risk Officer, Zurich
Insurance Group, Switzerland

The Advisory Board is composed of:

Rolf Alter, Organisation for Economic
Co-operation and Development
(OECD)
Mario Blejer, Banco Hipotecario SA
Winnie Byanyima, Oxfam International
Marie-Valentine Florin, International
Risk Governance Council (IRGC)
Steven Kou, National University of
Singapore
Julian Laird, Oxford Martin School
92 The Global Risks Report 2016
Pascal Lamy, Jacques Delors Institute Chris Lang Box 3.2.2: Environment team, World
Ursula von der Leyen, Federal Minister Oscar Lee Economic Forum
of Defence of Germany Holly Meidl Box 3.3.1: Olivier Oullier, World
Maleeha Lodhi Ambassador and Maurizio Quintavalle Economic Forum
Permanent Representative of Pakistan Daniel Radov Box 3.3.2: Jeremy Farrar, The
to the United Nations Chris Smy Wellcome Trust and Stéphanie Cristin,
Erwann Michel-Kerjan, Wharton Risk Alex Wittenberg World Economic Forum
Management and Decision Processes Box 3.3.3: Priya Basu, The World Bank
Center, University of Pennsylvania Zurich Insurance Group (in addition
Nicolas Mueller, Federal Chancellery of to those listed above) Part 2: Security: The Security
Switzerland Daniel Eherer Outlook 2030
Moisés Naím, Carnegie Endowment for John Scott A special thank you goes to the
International Peace participants of the Security Outlook
Jonathan Ostry, International Monetary 2030 initiative workshops including the
The Global Risks Report 2016
Fund Members of the Global Shapers
Academic Advisers (in addition to
Manuel Pulgar-Vidal Otalora, Minister of Community for their unique
those listed above)
Environment of Peru contributions. Please see the full list of
Nouriel Roubini, New York University participants at the end of this section.
National University of Singapore
Anders Sandberg, University of Oxford
Tan Chorh Chuan Part 4: Deep-Dives
Richard Smith-Bingham, Marsh &
Ho Teck Hua Unemployment or Underemployment:
McLennan Companies
Michelle Tuveson, Centre for Risk Saadia Zahidi, World Economic Forum
Studies, University of Cambridge Oxford Martin School, University of Energy Price Shocks to the Global
Judge Business School Oxford Economy: Espen Mehlum, World
Steve Wilson, Zurich Insurance Group Ian Goldin Economic Forum
Sandra Wu Wen-Hsiu, Japan Asia Failure of National Governance: Karen
Group Limited Wharton Risk Management and Wong, World Economic Forum
Decision Processes Center, Asset Bubble: Michael Drexler, World
University of Pennsylvania Economic Forum
The Activation Board includes:
Howard Kunreuther Cyberattacks: Ushang Damachi, World
Laura Castellano, Zurich Insurance
Group, Switzerland Economic Forum
Jason Groves, Marsh & McLennan The project team would like to thank
Companies, United Kingdom the following for their contribution to the A special thank you also goes to the
Report: following for their contribution and
Gregory Renand, Zurich Insurance
Group, Switzerland support to The Global Risks Report
Pavel Osipyants, Zurich Insurance Boxes 2016:
Group, Switzerland Box 1.2: Bernice Lee, World Economic Charles Baubion, Organisation for
Stephen Szaraz, Marsh & McLennan Forum Economic Co-operation and
Companies, United States Box 1.3: Sara Pantuliano and Caitlin Development (OECD); Juan Carlos
Wake, Overseas Development Institute Castilla-Rubio, Planetary Skin Institute
Box 1.4: Thierry Geiger, World and Space Time Ventures; Celine
The Global Risks Report 2016
Economic Forum Charveriat, Oxfam International;
Strategic Partners
Box 1.5: GAC on Risk and Resilience Stephen Cross, AON Plc; Geza
Box 2.1: International Security team, Andreas von Geyr, Federal Ministry of
Partner Content Leads Defence of Germany; Stephane
World Economic Forum
Richard Smith-Bingham, Director, Jacobzone, Organisation for Economic
Global Risk Center, Marsh & McLennan Box 2.2: International Security team,
World Economic Forum Co-operation and Development
Companies, United Kingdom (OECD); Trudi Lang; Kirstjen Nielsen,
Steve Wilson, Chief Risk Officer, Box 2.3: Peter Maurer, International
Committee of the Red Cross (ICRC) Center for Cyber and Homeland
General Insurance, Zurich Insurance Security; Paul Nicholas, Microsoft
Group, Switzerland Box 2.4: International Security team,
Corporation; and Laura Wellesley,
World Economic Forum
Chatham House.
Marsh & McLennan Companies (in Box 2.5: International Security team,
addition to those listed above) World Economic Forum
At the World Economic Forum
Ralph Bone Box 3.1.1: Society and Innovation team,
World Economic Forum Founder and Executive Chairman
Johnny Chan Klaus Schwab
Box 3.1.2 Guillaume Lafortune,
Jay Doherty
Organisation for Economic Co-
Evan Freely operation and Development (OECD) Executive Committee
Bruce Hamory Box 3.2.1: Environment team and Lorin David Aikman; Marco Albani; Arnaud
Patrick Howell-Day Fries, World Economic Forum Bernaert; Jennifer Blanke; Roberto

The Global Risks Report 2016 93

Bocca; Sebastian Buckup; Denise the production of this Report would not The project team would like to thank
Burnet; Nicholas Davis; Jean-Loup have been feasible. the individuals who contributed to the
Denereaz; Margareta Drzeniek Hanouz; report by participating in workshops:
Miroslav Dusek; Espen Barth Eide; The project team would like to thank
Diana El-Azar; Paolo Gallo; Julien the Members of the Global Agenda The participants in the workshop on
Gattoni; Malte Godbersen; Mike Council on Risk & Resilience and the The Global Risks Report 2016 were
Hanley; Lee Howell; Jeremy Jurgens; Meta-Council on the Illicit Economy for (in addition to those listed above):
Elsie Kanza; Anja Kaspersen; Martina their contribution. Abdulla Al Basti, The Executive Office,
Larkin; Helena Leurent; Emma Loades; Government of Dubai; Saeed Al Nazari,
Fon Mathuros Chantanayingyong; Global Agenda Council on Risk & The Executive Office, Government of
Adrian Monck; Olivier Oullier; Gilbert Resilience: Dubai; Carl Benedikt Frey, Oxford
Probst; Pedro Rodrigues de Almeida; Lauren Alexander Augustine, National Martin Programme on Technology and
Mel Rogers; Philipp Rösler; Richard Academy of Sciences; Stanley M. Employment, University of Oxford;
Samans; Olivier Schwab; Murat Bergman, Henry Schein; Michael Bastian Bergmann, ETH Risk Center;
Sönmez; Mark Spelman; Terri Toyota; Berkowitz, Rockefeller Foundation; Yves Daccord, International Committee
Akira Tsuchiya; Jean-Luc Vez; Dominic Edwin Macharia, Dalberg Global of the Red Cross (ICRC); Tina Fordham,
Waughray; Alex Wong; Justin Wood; Development Advisers; Victor Meyer, Citi; Cameron Hepburn, The Institute
Saadia Zahidi; and Alois Zwinggi. Deutsche Bank; Paul Nicholas, for New Economic Thinking, University
Microsoft Corporation, Kirstjen Nielsen, of Oxford; Evgueni Ivantsov, European
The Global Risks Report 2016 Public Center for Cyber and Homeland Risk Management Council; Moncef
Engagement Team Security; Satoru Nishikawa, Japan Klouche, The Executive Office,
Oliver Cann and Laura Clementi. Water Agency (JWA); Yuichi Ono, Government of Dubai; Alexander
Tohoku University; Sara Pantuliano, Leveringhaus, Oxford Institute for
Production Team Overseas Development Institute; Joe Ethics, Law and Armed Conflict,
David Bustamante; Marta Chierego; Ruiz, The UPS Foundation; Armen University of Oxford; Robyn Norton,
Kamal Kimaoui, World Economic Sarkissian, Eurasia House The George Institute for Global Health,
Forum; and Peter Grundy, Designer, International;; Dan Smith, International University of Oxford; Herbert
Hope Steele, Freelance Editor; Moritz Alert; Elizabeth Hausler Strand, Build Oberhänsli, Nestlé; Kazem Rahimi, The
Stefaner, Freelance Information Change; Jaan Tallinn, Centre for the George Institute for Global Health,
Visualizer; and Andrew Wright, Study of Existential Risk; Michael University of Oxford; Claudette
Freelance Writer. Useem, Wharton School; Nick Thompson, Cabinet Office; Barry
Wildgoose, Zurich Insurance Group; Vaughan, Department of Taoiseach;
The project team expresses its and Alexander Wolfson, Citi. and Alexander Weis, Royal College of
gratitude to the colleagues from the Defence Studies.
World Economic Forum who provided Meta-Council on the Illicit Economy
feedback throughout the development Adam Blackwell, William J. Perry The individuals who took part in the
of The Global Risks Report 2016 (in Center for Hemispheric Defense and private session at the Summit on the
addition to those listed above): Security Studies, National Defense Global Agenda 2015:
University, USA; Wolfgang Goetz, Sanjay Bhatnagar, WaterHealth
Marisol Argueta de Barillas; Adeyemi European Monitoring Centre for Drugs International (GAC Water); Juan Carlos
Babington-Ashaye; Giancarlo Bruno; and Drug Addiction (EMCDDA); Castilla-Rubio, Planetary Skin Institute
Caterina Clifone; Gemma Corrigan; Steven Simske,Hewlett-Packard and Space Time Ventures (GAC
Alexander Crueger; Diane Davoine; Company; Rolf Alter, Organisation for Forests); Céline Cousteau,
Dessislava Dimitrova; Sean Doherty; Economic Co-operation and CauseCentric Productions Inc. (GAC
Lisa Dreier; John Dutton; David Development (OECD); Hans J. Schwab, Oceans); J. Carl Ganter, Circle of Blue
Gleicher; Stefan Hall; Tatiana Tech Trace SA; Dimitri Vlassis, United (GAC Water); Sturla Henriksen,
Kalashnikova; Andrej Kirn; Isabelle Nations Office on Drugs and Crime Norwegian Shipowners’ Association
Lecouls Carbonnier; Emma Loades; (UNODC); Christina Bain, Babson (GAC Artic); Renat Heuberger, South
Muireann Mageras; Alan Marcus; Viraj College; Anton Du Plessis, Institute for Pole Carbon (GAC Climate Change);
Mehta; Stephan Mergenthaler; Fulvia Security Studies (ISS); Steven Broad, Naina Lal Kidwai, HSBC Asia Pacific
Montresor; Marie Sophie Müller; Alex TRAFFIC International; Raymond (GAC Water); Michael Lodge, General,
Mung; Sarita Nayyar; Derek O’Halloran; Baker, Global Financial Integrity; International Seabed Authority (GAC
Bernhard Petermeier; Florian Reber; Jean-Paul Laborde, United Nations; Oceans); Nick Mabey, Third Generation
Sophia Sandström; Jim Snabe; Paul Jay Cziraky, North Degrees; Linah K. Environmentalism (GAC Governance
Smyke; Lisa Ventura; Jean-Luc Vez; Mohohlo, Bank of Botswana; for Sustainability); Adil Najam, Pardee
Regula Waltenspuel; Bruce Weinelt; Gaozhang Zhu, World Customs School of Global Studies, Boston
Shannon Wells; and Alex Williams. Organization (WCO); Laura Lane, UPS; University (GAC Climate Change); Oyun
and Alan D. Cohn,Georgetown Sanjasuuren, Member of Parliament of
University Law Center. Mongolia (GAC Water); Greg Stone,
The project team is grateful to the 742
Conservation International (GAC
respondents to the Global Risks
Oceans); John Tanzer, WWF
Perception Survey 2015 without whom
International (GAC Oceans); Mead

94 The Global Risks Report 2016

Treadwell, LLC (GAC Artic); Gary White, American States; David Boehmer, Emirates; Amanda Ellis, New Zealand
Water.org (GAC Water); and Jan- Heidrick & Struggles; Jesper Boll, Ambassador to UN; Dominic Emery,
Gunnar Winther, Norwegian Polar Gulftainer Company Limited United BP Plc; Arnaud Erbin, GDF SUEZ;
Institute (GAC Artic). Arab Emirates; Ian Bond, Centre for Jonathan Eyal, Royal United Services
European Reform; Juan Boulos, Institute; Ulrik Federspiel, Haldor
List of participants to The Security Consolidated Contractors Company; Topsoe A/S; Marco Fiorese, The
Outlook 2030 Security Initiative Steven Boutelle , CISCO; Ernest Bower, Monaco-Asia Society; Peter Florenz,
workshops: Center for Strategic and International Henkel AG & Co. KGaA; Jim Freeth,
Hafsat Abiola-Costello, Government of Studies; Karl Bream, Alcatel-Lucent; JPMorgan Chase & Co United Arab
the State of Ogun; Yoshihiko Aihara, Binta Brown, Fermata Entertainment; Emirates; Hor Wuen Fung, Weatherford
Mitsubishi Heavy Industries; Gemma Juan Carlos Pinzón Bueno, Ministry of International; Li Fuzhen, Little Bird
Aiolfi, Basel Institute on Governance; National Defence of Colombia; Nilda Hotline for Migrant Workers; J. Carl
Fahad Al Binali, Police Force of Bahrain; Bullain, International Center for Not-for- Ganter, Circle of Blue; James Gifford,
TalalAl Gaddah, MAG Property Profit Law; Mely Caballero-Anthony, Harvard University; Elissa Golberg,
Development United Arab Emirates; Nanyang Technological University; Foreign Affairs, Trade and Development
Moafaq Ahmad Al Gaadah, MAG Corina Calugaru, Ministry of Foreign Canada; Pinchas Goldschmidt,
Group of Companies United Arab Affairs and European Integration of Conference of European Rabbis;
Emirates; Luay Al Kattheb, Iraq Energy Moldova; Jack Campbell, Marsch and TamurGoudarzi-Pour, Lufthansa
Institute United Kingdom; Abdulrazzaq Mclennan; Jose Manuel Carrera, PMI German Airlines United Arab Emirates;
Al-Buaijan, Kuwait Investment Authority Comercio Internacional SA ; Jain Kjell Grandhagen, Norwegian
(KIA); Alanoud Al-Sabah, Kuwait Chaitan, IATA; Kamala Chandrakirana, Intelligence Service; Sam Gregory,
National Security Bureau; Antanas Indonesia untuk Kemanusiaan; Ilias WITNESS; Jesse Grossman,
Aleknavičius, Ministry of Defence of Chantzos, Symantec Corporation; Community Bucket; Jean-Marie
Lithuania; Patrick Allman-Ward, Dana Mushtaq Chhapra, Citizens Guehenno, International Crisis Group;
Gas PJSC United Arab Emirates; Foundation; John Chipman, The Ahmed Hamzawy, BT Group Plc
Andreas Alnes, Statkraft AS; Suad International Institute for Security United Arab Emirates; David Harland,
Alshakrani, Bahrain Mumtalakat Studies; Jackie Cilliers, IIS South Africa; Centre for Humanitarian Dialogue;
Holding Company BSC (c); Husodo Noel Clehane, BDO International Ltd; Andrew Harper, United Nations High
Angkosubroto, PT Gunung Sewu Alan D. Cohn, US Department of Commissioner for Refugees; Rick
Kencana; Rashyid Redza Anwarudin, Homeland Security; Jean Francois Hathaway, Habitat for Humanity
Sime Darby Berhad; Doug Arent, Condamine, UPS United Arab International; Gary Haugen,
National Renewable Energy Emirates; James Cottrell, Deloitte LLP; International Justice Mission; Richard
Laboratory; Jon Arons, FTI Consulting; Stephen D’Esposito III, RESOLVE; Haythornthwaite, Mastercard; Renat
Nigel Aston, Amadeus IT Group SA; Ida Martyn Davies, Frontier Advisory Pty Heuberger, South Pole Carbon; John
Auken, Parliament of Denmark Ltd; Ilona Szabo de Carvalho, Igarapé Hewko, Rotary International;
(Folketinget); Dionysia-Theodora Institute; Rafael Fernandez de Castro, TerryHeymann, World Gold Council;
Avgerinopoulou, Circle of the Instituto Tecnologico Autonomo de Seema Hirani, DuPont Products SA
Mediterranean Parliamentarians on Mexico; Cedric de Coning, Norweigan United Arab Emirates; Bill Hughes,
Sustainable Development; Ronit Avni, Institute of International Affairs; Nishan TIBCO Software Inc.; Jonathan Ibbott,
Just Vision; Bahruz Bahramov, State Oil Degnarain, Mauritius Government; Susi XL Catlin; Ahmad Iravani, Center for the
Fund of the Republic of Azerbaijan Dennison, European Council on Study of Islam and the Middle East;
(SOFAZ); Evelyn Balais-Serrano, Asian Foreign Relations; Ghislain Desjardins, WolfgangIschinger, Munich Security
Forum for Human Rights and DuPont Products SA United Arab Conference ; Majid Jafar, Crescent
Development; Baldeo P. Banka, Ispat Emirates; Edmund DiSanto, American Petroleum United Arab Emirates; Sir
Indo PT; Anat Bar-Gera, Yoo Mee Tower Corporation; Dino Patti Djalal, Mohammad Jafar, The Kuwaiti Danish
Africa; Mehdi Barhkhodar, MKS PAMP Deputy Foreign Minister, Republic of Dairy Company KCSC, Kuwait; Chaitan
Group; Julien Barnes-Dacy, European Indonesia; Erika Dominguez, Sixsigma Jain, International Air Transport
Council on Foreign Relations; Networks México; Stephen C. Association (IATA); Kil Jeong-Woo,
AnaBarresi, Proyecto Indigo; Maricel Donehoo, McLarty Associates; Kathryn Member of Parliament, Republic of
Barros, Phillippine National Police; Dovey, Organisation for Economic Korea; Mahmoud Jibril, Leader of the
Katinka Barysch, Allianz SE; Biza Co-operation and Development National Forces Alliance; Haythem
Barzo, Institute of Regional and (OECD); Richard Dowdon, Royal Jlassi, Armed Forces of Tunisia; Lars
International Studies (IRIS); Raymond J. African Society; Florin Druga, Jannick Johansen, The Social Capital
Baxter, Kaiser Permanente; Rod Romanian Intelligence Service; Anton Fund; Bruce Jones, The Brookings
Beckstrom, Rod Beckstrom Group; du Plessis, IIS South Africa; Anthony Institute; Yoko Kamikawa, Ministry of
Sebastian Bellagamba, The Internet Dworkin, European Council on Foreign Justice of Japan; Ajay Kanoria, Kanoria
Society (ISOC); Erik Berglöf, London Relations; Toby Edwards, Agility; Peter Group; Robert D. Kaplan, Stratfor;
School of Economics and Political Eggleston, Chevron Asia Pacific Dennis Karpes, Naga Foundation; J.
Science; Andrey Beskodarov, PAO Exploration & Production; Amel Randall Kerr, Caterpillar Inc.; Sanjeev
LUKOIL; Carl Bildt, Former Prime Benchikh El Hocine, The Dow Khagram, Occidental College; Parag
Minister of Sweden; Rajiv Biswas, IHS; Chemical Company Algeria; Wael El Khanna, New America Foundation,
Adam Blackwell, Organization of Kabbany, BT Group Plc United Arab Singapore; Sirilaksana Khoman,

The Global Risks Report 2016 95

National Anti-Corruption Commission Institute; Karim Nabulsi, Deloitte Susan L. Segal, Council of the
of Indonesia; Nomo Khumalo, Henry Jordan; Yoshinobu Nagamine, Americas; Chris Seiple, Institute for
Schein Inc.; Ms Shoko Kimjima, Lixil International Committee of the Red Global Engagement; Sergei Sereda,
Corporation ; Marion Kipiani, Cross (ICRC); Chandran Nair, Global OJSC PhosAgro; Nasreen Seria,
Norweigian Helsinki Committee; John Institute for Tomorrow; Raman Bloomberg News; Ramesh
Knight, Statoil ; Kadiatou Konate, Narayanan, Air Asia; Nasser Nasser, Shivakumaran, Gulftainer Company
Minitry of Foreign Affairs, African Middle East Scientific Institute for Limited United Arab Emirates; Landry
Integration and International Security; David Nbarro, UN Special Signe, Stanford University; Tove
Cooperation of Mali; Khalid Koser, Envoy on Ebola; Hellen Ndwiga, Kenya Sjøblom, Statoil ASA; Silje Skogstad,
Global Community Engagement and Police Service; Jonas Neihardt, Hilton Deutsche Post DHL Group; Dan Smith,
Resilience Fund; Michael Krobok, Worldwide; Robin Niblett, Chatham Stockholm International Peace
Department of Security Policy, Federal House; Kirstjen Nielsen, Center for Research Institute; Natalia Soebagjo,
Government of Germany; André Cyber and Homeland Security; Helen Transparency International; Dario
Kudelski, Kudelski Group; Umit Alderson Reat Noch, International Speranza, Eni SpA; Rajesh Kumar
Kumcuoglu, Kare Yatirim; Josh Committee of the Red Cross (ICRC); Srivastava, Jubilant Bhartia Group;
Kurlantzick, Council on Foreign Victor Ochen, African Youth Initiative Jürgen Stock, INTERPOL; Olga
Relations; ScottLammie, University of Network-Uganda; Kenichi Oki, Stoliarchuk, Schoenherr Ukraina LLC;
Pittsburgh Medical Center - Health Mitsubishi Heavy Industries Ltd; Jens-Christian Stougaard, Pension
Plan; JoshuaLandis, University of George Ombima, IFC Asset Danmark; Timur Sukirno, Hadiputranto,
Oklahoma USA; Maged Latif, HSBC Management Company LLC; Mina Hadinoto & Partners; Malek Sukkar,
United Kingdom; Nadiah Hanim Abdul Oraibi, Asharq Al-Awsat Newspaper; Averda Lebanon; Paul Surprenant,
Latif, Sime Darby Berhad; Todd William Overholt, Fung Global Institute; Mercer; Hiroyuki (Bob) Takai, Sumitomo
Lauchlan, Jones Lang LaSalle; Seung Christine Ownell, Owenell Global Corporation Global Research Co. Ltd;
Bok Lee, Air Force of the Republic of Consultancy; Anju Patwardhan, Pavlo Tanasyuk, BlockVerify; Yana
Korea; Mark Leonard, European Center Standard Chartered Bank; Eliot Pence, Buhrer Tavanier, Fine Acts; Simon S.
for Foreign Policy; Rob Leslie, Sedicii; McLarty Associates; Robert Pepper, Tay, Singapore Institute of International
Daniel Levy, European Council on Cisco; Peter Phillips, PT Marsh Affairs (SIIA); Jim Thomas, Zurich
Foreign Relations; Geoffrey Lipman, Indonesia (MMC); Katarzyna Pisarska, Insurance; Andrew Thomson, Acciona;
International Coalition of Tourism European Academy of Diplomacy; Wim Pingtjin Thum, University of Oxford;
Partners; Clare Lockhart, ISE; Nick Plaizier, A.T. Kearney (Pty) Ltd; Oscar Adolfo Naranjo Trujillo, Minister
Mabey, E3G, Third Generation ToddPlatt, Hillwood; Arthur Nigel Pont, of Post Conflict of Colombia;
Environmentalism; Otto Malmgren, Mercy Corps Lebanon; Vijay Magdalena Trzpil-Halota, Polish
Norwegian Ministry of Foreign Affairs ; Poonoosamy, Etihad Airways; Brillianti Ministry of Defence; Givi Tsagereishvili,
Felix Maradiaga, Pioneer Capital Putri, Ministry of Foreign Affairs of Georgian Ministry of Internal Affairs;
Partners; Valerie Marcel, Chatham Indonesia; Arjen Radder, Royal Philips Bert Turner, Digital Globe; Sergey
House; Robert Mardini, International United Arab Emirates; Hilal Rahim, Vakulenko, JSC Gazprom Neft; Anshu
Committee of the Red Cross; Hector Afghan Ministry of Foreign Affairs; Vats, Oliver Wyman (MMC) United Arab
Marquez, Manpower Group; Thom Aashmi Rajya Lakshmi Rana, Educomp Emirates; Ravi Kumar Vennelaganti,
Mason, Oak Ridge National Lab; Solutions Ltd; Karim Raslan, KRA Crescent Enterprises United Arab
Tatsuo Masuda, Nagoya University of Group; Douglas A. Rediker, Peterson Emirates; Stefano Vescovi, Federal
Commerce and Business Graduate Institute for International Economics; Department of Foreign Affairs of
School; Luis Maza, Kio Networks; Tito Nicola Reindorp, Crisis Action; Neil Switzerland; Mark Vlasic, Georgetown
Mboweni, South Africa Reserve Bank Reznolds, CH2M HILL United Arab University; Joerg Volkmann, German
(SARB); Rory Medcalf, Australian Emirates; Nilmini Rubin, US House of Armed Forces; Siobhan Walsh,
National University; Souad Mekhennet, Representatives Committee on Foreign Concern Worldwide US; WeiWei, Little
The Washington Post; Ricardo Affairs; Ruediger Ruediger, University of Bird Hotline for Migrant Workers; Alice
Meléndez-Ortiz, International Centre for Vienna; Dina Sabry, Egyptian Ministry G. Wells, US Ambassador to Jordan;
Trade and Sustainable Development; of Foreign Affairs; William H. Saito, Achim Wenmann, Geneva Peace-
Gerard Meuchner, Henry Schein Inc.; Cabinet Office of Japan; Ghassan building Platform; Andre Wilkens,
Melody Boone Meyer, Chevron Salame, Universite des Sciences Rainbow Minerals; Abiodun Williams,
Corporation; Takashi Mitachi, Boston Politiques, Paris Sorbonne; Razeen Hague Institute for Global Justice; Nick
Consulting Group; Viktoriia Mizerna, Sally, National University of Singapore; Witney, European Council on Foreign
Ministry of Internal Affairs of Ukraine; Sir John Sawers, Former Chief of the Relations; Lee Xiaodong, China Internet
Michael Moller, Head of the United UK Secret Intelligence Service; Juan Network Information Center (CNNIC);
Nations in Geneva; Robert Mood, Pedro Schaerer, Relegación Regional Wu Xinbo, Fudan University; Yasuyuki
United Nations Supervision Mission in del CICR para México, América Central Yamaji, Mizuho Bank Ltd; Helena LiYan,
Syria; Justin Moore, Axcient; Moosa Al y Cuba, International Committee of the Trina Solar Ltd; Takashi Yao, Marubeni
Moosa, The Dow Chemical Company Red Cross (ICRC); John Christian Corporation; Bo Ram Yi, Old Dominion
United Arab Emirates; Gemma Schandy, Schandy; Michael Schroeder, University; Mohamed Bihi Yonis,
Mortensen, Crisis Action; Amr Moussa, Royal Belgian Armed Forces; Robyn Ministry of Foreign Affairs and
Former Secretary-General of the Arab Scott, Brothers for All; Demba Seck, International Cooperation of
League; Robert Muggah, Igarapé Customs Administration of Senegal; Somaliland; Lamberto Zannier,

96 The Global Risks Report 2016

Organization for Security and
Cooperation in Europe (OSCE); Almira
Zejnilagic, FTI Consulting; Lassina
Zerbo, Preparatory Commission for the
Comprehensive Nuclear-Test-Ban
Treaty Organization; and Daniel
Zovatto, International Institute for
Democracy and Electoral Assistance.

Figure: Scenarios Methodology, Workshops’ Composition

19% Academia

17% Government

Business 41%

13% NGOs4

International 7% 3% Other 4
organizations

Note: In total, the 10 workshops gathered 281 experts

The Global Risks Report 2016 97

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