In a round-up of the major risks facing the world over the coming decade, the World Economic Forum (WEF) has in its latest survey – conducted in partnership with Marsh & McLennan and Zurich Insurance Group – put the COVID-19 pandemic at the top of its list. In fact, the Global Risks Report has been sounding the alarm bells about the dangers of pandemics for 15 years – a risk that came to fruition in 2020.
According to the Global Risks Report 2021, developments stemming from the pandemic – including the millions of lives it has claimed and the pressure it has put on long-standing health, economic, and digital disparities – could put more roadblocks in the way of the global cooperation that will be required to address long-term challenges, like environmental degradation.
The report noted that when it comes to technology access and digital skills, the gap between the “haves” and the “have-nots” has grown wider, in turn challenging social cohesion, which will impact young people in particular, who may miss out altogether on critical opportunities in the next decade.
Additionally, financial, digital, and reputational pressures tied to COVID-19 could threaten to leave behind many organisations and their workforces in the markets of the future, noted the WEF report. Furthermore, an increasingly tense and fragile geopolitical environment will also hinder the global recovery, especially if mid-sized powers don’t have a seat at the table.
Alongside COVID-19, environmental risks also dominated the latest report, thanks to their impact on societies and likelihood of occurring, while societal fractures will make it harder to achieve the coordination needed to address continued degradation.
Notably, the WEF report has, for the first time, rated risks depending on when respondents perceive they will pose a critical threat to the world. The risks fall into the following categories:
- Clear and present dangers (0-2 years) include infectious diseases, employment crises, digital inequality, and youth disillusionment
- Risks in the medium-term (3-5 years) include knock-on economic and technological risks, IT infrastructure breakdown, price instability, and debt crises
- Existential threats (5-10 years) that include weapons of mass destruction, state collapse, biodiversity loss, and adverse technological advances
“Economic and societal fallout from COVID-19 will profoundly impact the way organisations interact with clients and colleagues long after any vaccine rollout. As businesses transform their workplaces, new vulnerabilities are emerging. Rapid digitalisation is exponentially increasing cyber exposures, supply chain disruption is radically altering business models, and a rise in serious health issues has accompanied employees’ shift to remote working,” said Carolina Klint, risk management leader for Continental Europe at Marsh. “Every business will need to strengthen and constantly review their risk mitigation strategies if they are to improve their resilience to future shocks.”