Full report
Published: 11 January 2023

Global Risks Report 2023

Conclusion: is preparedness possible?

While ongoing shocks unfold, the world stands at a crossroads. As we enter a low-growth, low-investment and low-cooperation era, the actions that we take today will dictate our future risk landscape. We must ensure that addressing current crises does not detract from the longer-term view.

Recent and current events such as COVID-19 and the cost-of-living crisis are steadily eroding economic, educational and health-related gains in a widening proportion of the population, with a growing divergence between advanced and developing countries. This in turn is interacting with a multiplicity of environmental and geopolitical risks – climate change, ecosystem collapse, multi- domain conflicts – to further threaten the security and stability of societies around the world.

In this context, defensive, fragmented and crisis-oriented approaches are short-sighted and often perpetuate vicious cycles. Lack of preparedness for longer-term risks will destabilize the global risks landscape further, bringing ever tougher trade-offs for policy-makers and business leaders scrambling to address simultaneous crises. A rigorous approach to foresight and preparedness is called for, as we aim to bolster our resilience to longer-term risks and chart a path forward to a more prosperous world.

Each risk requires concerted, specific and customized efforts but several cross-cutting principles can support preparedness across themes. In this concluding section, we outline four principles for preparedness in this new era of concurrent shocks: 1) strengthening risk identification and foresight, 2) recalibrating the present value of “future” risks, 3) investing in multi-domain risk preparedness, and 4) strengthening preparedness and response cooperation.

Improving risk identification and foresight

A wide range of disciplines aim to gather intelligence about the future, ranging from economics, business management, investment funds and insurance, to urban planning, climatology, virology and civil protection – but the track record around the use of foresight to enhance risk mitigation efforts remains mixed. The underestimation of – and therefore lack of preparedness for – emerging macro risks (like “grey rhinos” and “black swans”) reflect challenges posed by high levels of uncertainty, low levels of information, conflicting data and cognitive biases. Yet systematic progress is possible. Enhanced risk identification and foresight can be a key enabler for strategic decision-making, agenda-setting and resilience measures, helping to prioritize areas that would benefit from data collection and monitoring, risk controls and resources, and redundancies.

The first task of foresight is to identify future developments, risks and opportunities. Both horizon scanning and scenario planning are useful tools that can examine and build on “weak signals” in qualitative and quantitative data sources to better anticipate emerging trends. Established methods can help crystallize expert disagreements,1 while a greater distinction between risk and uncertainty – imperfect knowledge, such that likelihood cannot be scientifically quantified or known – will help challenge core assumptions. Greater levels of uncertainty should shift the focus from the probable to the possible: the study of potential outcomes needs to be expanded to ensure that risk mitigation and preparedness addresses the full scope of possible impacts.2 This is then complemented by risk monitoring, which focuses on providing early warning for when specific risks are about to materialize to enable advanced preparedness measures.

Another step to enhance risk foresight is to explore dynamics of change, to map interconnections between risks, including dependencies between critical systems. More sophisticated methods of analyzing interconnected risks (beyond linear relationships) can support the evaluation and prioritization of risk resources. Risks that are most influenced by or exposed to other risks will be the most challenging to mitigate, while those that exert an outsized influence on the outcome of the network can be prioritized as key points of intervention. The need for a systemic view of and approach to global risks is reflected in the rising call for the appointment of National Risk and Resilience Officers, to mirror the increasingly important role of the Chief Risk Officer in the private sector. While the mandate of this role may vary in practice, it reflects the need for a cross-cutting and whole-of-society view around external risk foresight, mitigation and crisis management.3

Rethinking ‘future’ risks

Cognitive biases channel public attention towards recent, “catastrophic” events. Business and political imperatives tend to prioritize risks with a direct, immediate and localized impact, such as food, fuel or other commodities’ shortages or local environmental disasters. This is necessary to manage crises, especially when millions of lives and livelihoods are at risk. However, when such risks manifest, resources and attention are often diverted from addressing global risks, especially those that form the root causes of local catastrophes or those that may arise outside the time frames relevant to today’s leaders.

This can skew preparedness efforts in the public and private sector alike. For better planning and preparedness, institutions must de-anchor risk prioritization from shorter-term incentives. Despite regularly featuring in the top rankings, the most severe global risks – pertaining particularly to climate and nature – are those we are still the least prepared for. The majority of GRPS respondents assessed existing measures to prevent or prepare for the Failure to mitigate climate change, Failure of climate-change adaptation, and Biodiversity loss and ecosystem collapse as ineffective or highly ineffective (Figure 4.1). Similarly, most respondents considered preparedness to be inadequate for Misinformation and disinformation, Erosion of social cohesion and societal polarization, Involuntary migration and the Cost of living crisis.

The growing global awareness of these risks is clear, but further action will likely continue to be stymied, given perceived shorter-term and localized crises and trade-offs. Without minimizing the need for an effective response, the over-prioritization of current challenges can quickly descend into a doom-loop of continuous global shocks, whereby resources are absorbed by crisis management, rather than directed to preparedness for future risks. Complex challenges cannot be solely solved by short-term decision-making – and yet long-term thinking alone is insufficient in the face of currently unfolding crises.

To break the cycle, business leaders and policy-makers need to embrace complexity and adopt a dual vision that more effectively balances current crisis management with a longer-term lens. For example, in the wake of the COVID-19 pandemic, governments will not only need to target resources to stabilize distressed healthcare systems, but at the same time work to ensure that environments conducive to zoonotic disease spread are adequately monitored, gain-of-function research is regulated, and that synthesis requests to bio-laboratories are screened to prevent future outbreaks from natural spillovers, accidents and threat actors.4

Global Risks Report 2023, Figure 4.1 | Perceptions around preparedness and governance

Investing in multi-domain, cross-sector risk preparedness

In addition, actions taken to address current challenges should, at a minimum, avoid exacerbating future risks, such as the potential trade-off between food security, nature loss and climate change. Recent crises have seen an extraordinary level of fiscal intervention to protect individuals and companies from the financial impacts of crises – from the COVID-19 pandemic to energy prices. While necessary and perhaps unavoidable in the circumstances at hand, it remains to be seen how significantly these rapid, large-scale actions will result in debt sustainability concerns and how widely they distracted decision-makers from other risks highlighted in this report.

Conversely, many shorter-term actions can also act as wider stabilizers, embedding and accelerating longer-term, multi-domain resilience. Not all global risks pose a preparedness trade-off, and solutions that address both current needs and future risks can rebalance the cost-benefit ratio for necessary investment. For example, investment in health and education, key tenets of managing present needs in all societies as well as longer-term human capital and economic development, strengthens societal resilience to multiple shocks and risks including climate change.

Additionally, many global risks have the potential to impact economies and societies in an analogous way, with similar consequences. For example, cyberattacks, social unrest or extreme weather could each cause the outage of critical information infrastructure; or, on a more catastrophic scale, volcanic eruptions and war may disrupt food security.5 Strengthening resilience efforts in critical areas therefore pays off in all scenarios and improves preparedness for a multiplicity of risks, both known and unknown, and short and long term.

Following recent shocks – the pandemic, inflation, war, among others – national governments are increasingly focusing on addressing vulnerabilities in critical systems, including potential disruptions to food, water, shelter, basic communication services and public safety, and developing multi-domain responses. A bill has been introduced in the United States of America to form an interagency committee to assess all global catastrophic risks over the next 30 years and develop strategies to ensure continuity of operations and critical infrastructure if these risks arise.6 In addition, the UK Government is developing a tool to measure socioeconomic resilience to key civil contingencies risks, to provide a more nuanced, data-driven view on how risks impact across different communities and groups.7

As global risks become more intertwined, preparedness also needs to become more of a shared responsibility between sectors, with local and national governments, business and civil society each playing to their strengths, rather than traditional models of governments addressing market failures when they occur.8 For example, private-public partnerships can help close key gaps in innovation, financing, governance and implementation of preparedness measures for emerging and well-established risks, such as food and water insecurity, weakened education and healthcare systems, and insufficient regulation of dual-use technologies, or addressing the looming insurance gap relating to cyberwarfare.9 Innovative collaborations can also minimize overall exposure to potential impacts, as organizations across geographies and sectors are rarely exposed to the same risks at the same time. For example, data centres of different institutions in differing geographies are highly unlikely to be exposed to the same cyber or extreme weather risks, meaning effective mitigation could include regular backups of each other’s systems.10

Re-building and strengthening global risk preparedness cooperation

While national risk preparedness can enhance the ability of societies and economies to rebound from shocks, most global risks are ‘owned’ by no one and sit outside the direct control of any one public or private sector entity – meaning many global risks are most effectively tackled through coordinated, global action. Respondents to the GRPS shared their views on which stakeholders were best prepared to tackle the key risks covered in the survey (Figure 4.1). The majority consider national governments, multi-country efforts and international organizations to be the most relevant stakeholders for governing these global risks – recognizing that global risks are complex, and effective preparedness can require action at local, national, regional and global levels.

International cooperation has reached levels that may have been unimaginable even a century ago. However, the recent overload of crises has turned the focus of nations inwards and the emerging outlook for international cooperation is deteriorating. Actions taken to shore up national resilience can be self-perpetuating. For example, stockpiling and export controls can directly exacerbate global shortages and position trade, financial and technological dependencies as a strategic vulnerability, spurring further disintegration. Similarly, the pursuit of domestic and global security goals may have unintended consequences for the geopolitical landscape, leading to spiralling distrust, declining safeguards against mutually assured economic destruction, and currency and technological tools that are less influential. Even areas traditionally open to collaboration, such as international climate research, are under threat. For example, data regarding Russia’s boreal forests –the biggest land-based carbon store on the planet – is no longer available for international scientific research because of the war in Ukraine.11

International organizations will continue to play an essential role in global preparedness, even as they face significant headwinds that risk degrading the guardrails in place to address well-established issues. There have been numerous examples of the politicization and partial paralysis of key international mechanisms and organizations in recent crises. These pressures may impede the development of meaningful norms and agreements required to mitigate emerging global risks – from the proliferation of military technologies to governing the global commons. Re-invigorating multilateral processes and organizations is critical to the future of preparing for and managing global risks.

Additionally, specific cooperation at sectoral, bilateral and regional levels will become even more important in this environment. Robust data exchange and collaborative monitoring processes have already been established for some global risks (natural disasters, extreme weather events and terrorist attacks, among others). Further, open-source data and scenario development have helped increase the effectiveness of individual risk responses, such as the extensive work undertaken by the IPCC to develop a range of climate scenarios that has improved understanding, informed decarbonization strategies and allowed for collective alignment on science-based targets. However, efforts are more nascent or non-existent in other areas, such as the long-term trajectory and impact of transformative AI. Greater collaboration across industries and between countries – in terms of coordinated funding, research and data sharing – is critical to help identify weak signals of emerging threats at both a national and global level.

In a complex risks outlook, there must be a better balance between national preparedness and global cooperation. We need to act together, to shape a pathway out of cascading crises and build collective preparedness to the next global shock, whatever form it might take. Leaders must embrace complexity and act on a balanced vision to create a stronger, prosperous shared future.

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