Overview of World Economic Forum’s Recent Worldwide Risk Assessment

The World Economic Forum recently released the eighth edition of its annual Global Risks report.  The 2013 edition of this report is based on the Forum’s “Global Risks Perception Survey,” conducted late last year. 

The report presents a complete analysis of the survey results, along with three case studies that delve into key “constellations” of risks identified by the survey – each “constellation” is a collection of related risks that combine to represent a broader risk issue impacting the globe.  The report also features another section that discusses emerging risks.  The World Economic Forum uses its Global Risks reports to spread awareness about perceived risks that have the potential to affect individuals and organizations all around the world.  

Description of the “Global Risks Perception Survey”

The World Economic Forum’s “Global Risks Perception Survey” asks each respondent to assess 50 risks along scales of likelihood (that the risk will occur) and impact (if the risk were to occur).  Each survey participant is also asked to answer questions about the ability of their home country to respond to the impact of the risks described in the survey.  Another section of the survey asks the respondent to consider the interaction between various risks.  The survey was sent to over 6,000 individuals around the world, and over 1,000 responses were received from participants in over 100 countries.  The survey respondents represent numerous professional backgrounds and areas of expertise.

Highlights of Global Risks 2013

The following points are just several observations from this rich report from the World Economic Forum:

• According to the results from the “Global Risks Perception Survey,” some of the most highly rated risks for both likelihood and impact include “Chronic fiscal imbalances,” “Water supply crises,” “Failure of climate change adaptation,” and “Major systemic financial failure.”
• The three case studies in the report focus on the following global risk issues:

1. The state of the financial/economic environment and the natural environment
2. The effects of the Internet on global society
3. The state of antibiotic research amidst growing concerns about antibiotic resistant bacteria

Each case provides an in-depth analysis of the risk issue and provides a future outlook on the issue.  Each case also offers questions for critical thinking about the risk “constellation” and suggestions on how the risks could be dealt with going forward.

• The World Economic Forum teamed up with the well-known science journal, Nature, to compose a section of the report focusing on emerging risks.  This section includes edgier risk topics, such as the societal impacts of increasing human lifespans, the future of geoengineering, and the possibility of human cognitive enhancement.
• This report also contains a “Special Report” section that displays the results of the survey questions geared towards evaluating the “resilience” of each survey respondent’s home country to risk events.  This section breaks down “resilience” into five components and also discusses types of risks, citing a Harvard Business Review article from Robert Kaplan and Annette Mikes on the subject.

Connections to Enterprise Risk Management

Even though Global Risks 2013 approaches risk on a grand, global scale, the risk information contained in the report is certainly applicable at the enterprise level.  The report illustrates that, whether it’s apparent or not, each individual and organization is somehow connected to the rest of the world and the risks impacting the global community.  Thus, enterprise leaders could use the risk information presented in this report by the World Economic Forum as a valuable benchmarking tool for risk identification in the enterprise’s own ERM efforts.  The Global Risks report also demonstrates various methods for organizing and visually representing risk assessment data.  This could be helpful to an organization in maximizing use of the data output of its own enterprise risk management process.

Original Article Source: “Global Risks 2013,” World Economic Forum, 2013