Summary of WEF’s 2019 Global Risks report
The World Economic Forum (WEF) just released their annual Global Risks report. (You can download it here Few things that stood out:
- The world is indeed sleepwalking into multiple crisis. If you look at the snapshot below, you will realize that all these risks have incredible implications and impact on multiple adjacencies. For example, failure to address climate change results into large-scale involuntary migration, which in turn raises unemployment and/or underemployment, which in turn creates fiscal crises, which in turn leads to failure of financial mechanism or institution.
- As many have pointed out numerous times, our world is becoming more and more interconnected. This interconnection also leads to a lot more interdependencies and impact in a larger number of adjacencies being effected than ever before. Take a closer look at the chart below and you will see how each element impacts every other element. And keep in mind that this particular report only examines the biggest risks and threats and not all risks.
- Specifically, the report looks at five areas of concern:
- Economic vulnerabilities: Mainly, concern of deteriorating international economic environment and erosion of multilateral trading rules and agreements. Worth noting is the concern of political polarization and increasing inequality that leads to erosion of a country’s social fabric, which, in turn, leads to decreasing economic performance. An alarming 85% of the respondents are expecting major power political confrontations (think Cold War type).
- Geopolitical tensions:
- Domestic key tensions: States and individuals, states and minorities, states and markets, and the role of technology
- Global key tensions: Multilateral rules and institutions, sovereignty and non-interference, migration and asylum, protection of the global commons. Multilateralism is under threat with many leaders advocating for a nation-first policy and less globalism, policy that ignores the everyday fact: we live in a hyper-interconnected world and there is not way of going back.
- Societal and political strains: The impact of systems under stress is felt in terms of mass anger; increased depression and anxiety disorders; increased violence, poverty, and loneliness; and lack of empathy from private and public institutions. Technology (like social media) can both help and further hurt people by amplifying the message (good or bad). Such stress, if not addressed at its root causes, will have significant economic, societal, and political impact.
- Environmental fragilities:
- Increasing number and footprint of outbreaks (like Ebola, MERS, SARS, Zika, yellow fever, influenza) are amplified by surging levels of travel, trade, and connectivity. They are also aided by high-density living, increasing deforestations, and mass migrations of populations (either from rural to urban areas or from developing to developed countries). One other worrisome area is the use of newest technology (like CRISPR-9 DNA manipulation, biological 3D printing) as biological weapons. Most of these new technologies are not currently regulated, which makes tracking their results hard to do.
- Rapid urban population growths (people looking for jobs in the cities when rural areas couldn’t provide them) coupled with mass migration due to climate change (drought, raising coastal waters, etc.) will lead to more people being crammed into shrinking urban space.
- Infrastructure will be affected by climate change impacts (like rising sea levels and floods accompanying extreme weather events): roads, railways, ports, internet, sanitation, drinking water, energy, tourism, agriculture.
- Technological instabilities: An interesting section looks at future shocks (not quite black swans, but having high global impact):
- Weather wars: Using weather manipulation tools to influence geopolitical outcomes.
- Open secrets: For example, the use of quantum computing making current digital cryptography obsolete. Which leads to a disturbing potential behavior: I’ll steal your data now and wait for quantum computing to decipher it.
- City limits: The increasing divergence between rural and urban worlds, leading not only to emotional issues (bitterness, rivalry), but also economic instability and need for government subsidies, for example.
- Food supply disruption: Being used as a tool in geoeconomic wars.
- Digital panopticon: The increasing (alarming, really) use of surveillance technology from both nation states and private companies, can be viewed as a positive (highly customized offering) or as a negative (knowing your every move without any recourse against it). Especially, dangerous as a) authoritarian nation states like China imposing it on its people and b) lack of regulation in the rest of the world for private systems collecting massive amounts of data.
- Ever-increasing risk of water running out: In a related article, the WEF predicts that future wars might be over water given the shrinking source of clean, potable water due to long-term draughts caused by climate change and increasing urban populations.
- Fight for low-orbit space: As more and more countries are launching their own satellites, low orbit space will be become crowded and potentially being used for military purposes.
- Emotional disruption: this, to me, is the scariest one. It uses AI to determine the emotional state of a person. In a positive environment, you can use it to treat depression and other issues. But, most likely, it will be first used as tool to influence perception, to recruit and radicalize vulnerable people, to micro-target ads without the user’s consent, to intimidate adversaries, to weaponize social media. It can also be used in court to prove one’s guilt by inferring a certain behavior based on facial expressions recorded by AI. Think Minority Report using AI instead of the Pregcogs.
- Erosion of human rights: Used in the name of “the greater good”, nation states can use technology like the AI above to limit people’s rights. The divergence in fundamental values between opposing ideologies only legitimizes an authoritarian government the use of technology and new rules, which limit or completely eliminate human rights.
- Monetary populism: Increased protectionism could put in danger the independence of central banks.
World Economic Forum – 2019 Global Risks Report