Preface Since 2006 the World Economic Forum’s Global Risks report has provided a unique and timely analysis of the risks that are shaping the network security projects pdf environment. Global Risks 2011, Sixth Edition provides a high-level overview of 37 selected global risks as seen by members of the World Economic Forum’s Global Agenda Councils and supported by a survey of 580 leaders and decision-makers around the world.
This report aims to enhance understanding of how a comprehensive set of global risks are evolving, how their interaction impacts a variety of stakeholders, and what trade-offs are involved in managing them. Global Risks 2011, Sixth Edition is a useful tool for policy-makers, CEOs, senior executives and thought leaders around the world. It aims to equip institutions to understand and respond to global risks and to embrace change as a source of innovation. Most importantly, I hope that focusing on the critical connections between key global risks, stakeholders and decision-makers will inspire all to engage collectively in efforts to improve the global system’s overall resilience. The RRN will build on the understanding embodied in Global Risks 2011, Sixth Edition to provide a platform for our Partners and constituents to collaborate in multistakeholder efforts to shape a more secure, innovative and resilient future. I hope you find the report both informative and provocative.
The RRN is a unique platform for global decision-makers to better understand, manage and respond to complex and interdependent risks. It will bring a rigorous approach to understanding the complexity of risks that face corporate, government and civil society leaders, and will provide tools enabling them to better mitigate risks and capture associated opportunities. The RRN will build on these insights over the coming months by launching a series of initiatives and workstreams focused on a variety of global risks highlighted in this Report. We hope that you will find Global Risks 2011, Sixth Edition to be thought-provoking.
But, more importantly, we hope many of you will join the World Economic Forum’s initiative to collectively better understand and respond to the new world of risk. The financial crisis has reduced global economic resilience, while increasing geopolitical tension and heightened social concerns suggest that both governments and societies are less able than ever to cope with global challenges. In this context, Global Risks 2011, Sixth Edition reveals insights stemming from an unparalleled effort on the part of the World Economic Forum to analyse the global risk landscape in the coming decade. Two cross-cutting global risks Two risks are especially significant given their high degrees of impact and interconnectedness. Economic disparity2 and global governance3 failures both influence the evolution of many other global risks and inhibit our capacity to respond effectively to them.
In this way, the global risk context in 2011 is defined by a 21st century paradox: as the world grows together, it is also growing apart. Globalization has generated sustained economic growth for a generation. It has shrunk and reshaped the world, making it far more interconnected and interdependent. Although growth of the new champions is rebalancing economic power between countries, there is evidence that economic disparity within countries is growing.
Issues of economic disparity and equity at both the national and the international levels are becoming increasingly important. Politically, there are signs of resurgent nationalism and populism as well as social fragmentation. There is also a growing divergence of opinion between countries on how to promote sustainable, inclusive growth. To meet these challenges, improved global governance is essential. A cluster of economic risks including macroeconomic imbalances and currency volatility, fiscal crises and asset price collapse arise from the tension between the increasing wealth and influence of emerging economies and high levels of debt in advanced economies. Savings and trade imbalances within and between countries are increasingly unsustainable while unfunded liabilities create extreme long-term pressure on fiscal positions. This nexus examines a cluster of risks including state fragility, illicit trade, organized crime and corruption.
A networked world, governance failures and economic disparity create opportunities for such illegal activities to flourish. A rapidly rising global population and growing prosperity are putting unsustainable pressures on resources. Shortages could cause social and political instability, geopolitical conflict and irreparable environmental damage. Throughout this report, a series of risk response strategies are explored that can help stakeholders achieve both goals. The Global Risks Survey identified economic disparity as one of the most important risks in the coming decade.
The Forum’s Global Agenda Council survey also supports this finding, having ranked economic disparity as the second most important trend in terms of impact on the business community and as the most underestimated trend in terms of its impact. Economic disparity is tightly interconnected with corruption, demographic challenges, fragile states, global imbalances and asset-price collapse. They saw economic disparity as influenced by climate-change related risks and global governance failures. Economic disparity plays out between and within countries. Ease of communication has made inequalities between countries more visible. Despite robust growth in some emerging economies, many countries remain trapped in a cycle of poverty with tremendous implications ranging from lack of access to basic social infrastructure such as good education, healthcare and sanitation to political fragility of the state. Stakeholders also expressed concerns over evidence of rising economic disparity within countries, in advanced and emerging economies alike.
Economic analysis by the OECD and others suggests that real income growth of the top income quintiles of the populations in Finland, Sweden, the United Kingdom, Germany, Italy, and the USA was twice as large as that of the bottom quintiles between the mid-1980s to mid-2000s. Many factors may have contributed to this trend within countries, including the erosion of employment culture, the decline of organized labour, and failures of education systems to keep pace with the increasing demands of the workplace. Economic disparities are also seen as contributing to a broader process of global social fragmentation. Globalization has led to different groups within countries having divergent economic interests, undermining a sense of broader national solidarity.