”It is very difficult to help others when you are sinking deeply” – What does the world risk map look like considering global forecasts?
The following five-part blog series deals with the world’s risk maps. In his second post in the blog series, in the blogs introduces readers to global risk forecasts.
Global concern about the environment has grown, especially over the past couple of decades, and climate change is one of the most important topics on the risk maps of different actors. In some places, political efforts have been made to deny the threat of global warming, while environmental groups have raised their voices and stakes, calling for rapid change from around the world.
In addition to climate change, the geopolitical situation and digitalization are painting question marks over the global future.
At PwC, we compiled four globally significant risk forecasts. They serve as good sources when you want to provide an overview of global risk assessment trends in your organization.
World Economic Forum
In January this year, all eyes were on the annual World Economic Forum, considered the most important player in mapping global risk perceptions. The WEF gathers views at the level of continents, countries, and the whole world.
Globally, the WEF listed the following ten points as the biggest risks for the following year:
- Rising cost of living
- Natural disasters and unexpected weather phenomena
- Geopolitical conflicts, the number of which is increasing.
- Climate change, the effects of which are increasingly visible.
- Division of the world and divisions within states
- Isolated large-scale environmental disasters
- Failures in the fight against environmental change
- Widespread cyber threats and rapidly growing cybercrime
- Depletion of natural resources
- Emigration around the world and resulting refugee flows.
A more extensive summary can be found here: https://www.weforum.org/agenda/2023/01/these-are-the-biggest-risks-facing-the-world-global-risks-2023/
The economic shock was the most significant change compared to previous years, and the rapidly spreading economic crisis became the world’s biggest concern. ”It’s very difficult to help others when you’re sinking deep.” Even on an airplane, the oxygen mask must first be placed on one’s own face before helping others to place the oxygen mask. Indeed, the ten IPO risks were almost entirely related to economic and global geopolitics.
One particular concern is the concentration of digitalization in a monopolistic direction. The whole report is marked by global security and, especially alongside the unrest, by the increase in terrorism.
Eurasia Group’s safety-focused risk map
Eurasia Group’s assessment of the focus of risks relies heavily on security policy and threats, which divide the world into two different camps.
Link to review: https://www.eurasiagroup.net/issues/top-risks-2023
The group estimates the biggest risk in 2023 is a Russian invasion of Ukraine. The review examines war both as a direct threat of escalating kinetic war and as an indirect phenomenon of war in Europe and around the world. Great power politics is very much under scrutiny. Maxium Xi, China’s political climate change in domestic politics emerges as the second biggest risk in the world after the war. In the bronze position, Eurasia Group highlights weapons of mass destruction and the growing threat of their use.
These risks may ultimately lie on the outer periphery of the activities of companies and organizations. Their effects are direct and very strong, and preparing for them is more exceptional. On the other hand, the larger and more global the organization, the more attention needs to be paid to these.
Eurasia Group’s risk map for the future of the world is very appealing and interesting. If the outlook is compared to the weighting of WEF’s risks, these risks may, if realized, have a very dramatic impact on global situations.
Visual Capitalism partly summarizes studies surveyed by others.
Visual Capitalist is comprehensively presented, but their risk assessment is based on the same sources and studies as, for example, the WEF.
However, Visual Capitalist’s risk map is useful because it focuses significantly on financial threats, which are quite closely intertwined. In the world, domino effects are very typical, and often the inter dependencies of related things are understood only afterward.
Visual Capitalist estimates can be useful when considering the relationship between risks and dependencies. Many crisis concepts have started in the long term, but only become destabilizing for the whole world later. The war in Ukraine has been going on for more than a decade, and its effects have slowly escalated. When assessing the war and its link to possible energy dependence on Russia, the energy crisis cannot come as a surprise! How the energy crisis directly reflects on the cost of living, trade policy, and general well-being is listed as the biggest future threat in Visual Capitalist’s assessments.
The review prioritizes risks in the following order (the interdependencies of which are described above):
- Energy crisis
- Rising cost of living to crisis levels
- Rising inflation
- A food crisis in which global food production faces large-scale production problems
- Cyberattacks on critical infrastructure
- Global supply chain disruption
- A climate crisis that fails globally to meet targets
- Transformation of economic policy into military influence
- Global debt crisis spiraling out of control
- Curtailment of human rights
Link to review: https://www.visualcapitalist.com/global-risks-2023/
European Cyber Risk Assessment
ENISA (European Union Agency for Cybersecurity) takes a focused look at cybersecurity-related threats. The risks are examined over a longer period than in other surveys.
Future cybersecurity risks listed by ENISA:
- Software supply chain dependencies and vulnerabilities
- Increasingly sophisticated misinformation campaigns
- An increase in authoritative telecommunications monitoring and the breakdown of private protection.
- Human-centric risks in CPS
- Growing cyberattacks on smart devices.
- Lack of management of space and ability to assess its impact on various activities.
- Growing hybrid threats
- Digital and cyber skills gap
- Cross-border ”one-point” systemic and supplier risks (concentration of dependency on a few or only one supplier or system)
”Global data economy concentration, monopolization”
- Misuse of increasingly rapidly developing AI
Cyber security and digitalization are constantly facing new challenges, although none of the information security risks that emerged since the early 1990s have completely disappeared either. Computer viruses are transforming into more sophisticated malware, and their effects and spread are greater than before.
The assessment also highlights the opportunities created by artificial intelligence – for better or for worse. For example, it is already possible to create almost flawless videos by creating a fictional person on video to say and present things as an image and sound. A fictional character can look and sound almost the same as a real person, in the physical world.
The risks highlighted by ENISA are important and growing issues now and will continue to do so in 2030.