Failure of climate change mitigation and adaptation was seen as the most impactful risk, while large-scale involuntary migration is the risk that could have greatest impact in 2016.
The World Economic Forum's Global Risks Report 2016 outlines the global risks that will affect business and people in the coming 10 years.
The respondents of the survey were asked to consider 29 different types of risks, which were categorised as either societal, technological, economic, environmental or geopolitical, over a 10-year time horizon. They were asked to rate each according to the perceived likelihood of it occurring and impact if it does.
Most impactful risks
The top five most impactful risks were:
- the failure of climate change mitigation and adaptation;
- weapons of mass destruction;
- water crises;
- large-scale involuntary migration; and
- severe energy price shock (increase or decrease).
Most likely risks
However, the 750 experts who responded to the survey said that the most likely risk this year is large-scale involuntary migration. Three environmental risks were perceived as the following most likely risks to occur in 2016: extreme weather events, the failure of climate change mitigation and adaptation, and major natural catastrophes. The risk of interstate conflict with regional consequences was in fifth place – down from first place in 2015.
Cost of cybercrime put at US$445 billion in 2016
The report estimates that cybercrime will cost the global economy US$445 billion in 2016, while climate warming will increase the global average temperature by 1° Celsius above the pre-industrial era and 60 million people will be forcibly displaced.
Respondents to the survey come from business, academia, civil society and the public sector and span different areas of expertise, geographies and age groups.
Some of the serious economic risks mentioned in the survey include the possibility of fiscal crises in key economies and high structural unemployment and underemployment. The survey found that these would be exacerbated by cyberattacks and profound social instability.
Profound impact of Fourth Industrial Revolution
The World Economic Forum's report recognises the potentially profound impact of the Fourth Industrial Revolution on the economy and society and emphasises the need for safeguarding future benefits.
Unemployment and energy price shocks are top business risks
Respondents from the private sector identified two top risks to doing business in the coming decade – unemployment & underemployment and energy price shocks – followed by the failure of national governance, fiscal crises, asset bubbles and cyberattacks.
Supply chain disruption hampers 75% of businesses but few understand risks
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Letters of credit alive and well as global trade risks increase
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World Economic Forum: ten global risks of highest concern in 2014
How will: 1-financial crises, 2-unemployment, 3-water crises, & digital disintegration impact you?
EIU survey finds corporate treasurers focused on weak economy and FX risk
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No reward without risk: finance is top risk for corporates
Three-quarters of companies only evaluating their risk profile annually, limiting their ability to react to changes to their risk landscape.