The Global Risks Report 2018 - Marsh & McLennan …

1 The Global Risks Report 201813th EditionInsight ReportStrategic Partner of the ReportWorld Economic Forum91-93 route de la CapiteCH-1223 Cologny/GenevaSwitzerlandTel.: +41 (0) 22 869 1212 Fax: +41 (0) 22 786 Global Risks Report 2018 , 13th Edition, is published by the World Economic information in this Report , or on which this Report is based, has been obtained from sources that the authors believe to be reliable and accurate. However, it has not been independently verified and no representation or warranty, express or implied, is made as to the accuracy or completeness of any information obtained from third parties.

2 In addition, the statements in this Report may provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical fact or a current fact. These statements involve known and unknown Risks , uncertainties and other factors which are not exhaustive. The companies contributing to this Report operate in a continually changing environment and new Risks emerge continually. Readers are cautioned not to place undue reliance on these statements. The companies contributing to this Report undertake no obligation to publicly revise or update any statements, whether as a result of new information, future events or otherwise and they shall in no event be liable for any loss or damage arising in connection with the use of the information in this Economic ForumGenevaWorld Economic Forum 2018 All rights rights reserved.

3 No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, or otherwise without the prior permission of the World Economic S B N: 978 -1- 9 4 4 8 3 5 -15 - 6 REF: 09012018 The Report and an interactive data platform are available at Risks LandscapeImpactTop 10 Risks in terms of Likelihood CategoriesTop 10 Risks in terms of ImpactWeapons of mass destructionExtreme weather eventsNatural disastersFailure of climate-change mitigation and adaptationWater crisesCyberattacksFood crisesBiodiversity loss and ecosystem collapseLarge-scale involuntary migrationSpread of infectious diseases Extreme weather eventsNatural disastersCyberattacksData fraud or theftFailure of climate-change mitigation and

4 AdaptationLarge-scale involuntary migrationMan-made environmental disastersTerrorist attacksIllicit tradeAsset bubbles in a major economy bubbles in a majoreconomyDeflationFailure of financialmechanism or institutionFailure of criticalinfrastructureFiscal crisesUnemployment orunderemploymentIllicit tradeEnergy price shockUnmanageable inflationExtreme weather eventsFailure of climate-changemitigation and adaptationBiodiversity loss andecosystem collapseNatural disastersMan-made environmentaldisastersFailure of nationalgovernanceFailure of regional orglobal governanceInterstate conflictTerrorist attacksState collapse or crisisWeapons of mass destructionFailure of urban planningFood crisesLarge-scaleinvoluntary migrationProfound socialinstabilitySpread of infectiousdiseasesWater crisesCritical informationinfrastructure breakdownCyberattacksData fraud or theftAdverse consequences oftechnological advancesEconomicGeopoliticalEnvironmenta lSocietalTechnologicalFigure I: The Global Risks Landscape 2018 Source: World Economic Forum Global Risks Perception Survey 2017.

5 Survey respondents were asked to assess the likelihood of the individual Global risk on a scale of 1 to 5, 1 representing a risk that is very unlikely to happen and 5 a risk that is very likely to occur. They also assess the impact on each Global risk on a scale of 1 to 5 (1: minimal impact, 2: minor impact, 3: moderate impact, 4: severe impact and 5: catastrophic impact). See Appendix B for more details. To ensure legibility, the names of the Global Risks are abbreviated; see Appendix A for the full name and Interconnection MapAgeing populationAgeing populationChanging landscape ofinternational governanceChanging landscape ofinternational governanceChanging climateChanging climateDegrading environmentDegrading environmentGrowing middle class inemerging economiesGrowing middle class inemerging economiesIncreasing nationalsentimentIncreasing nationalsentimentsocietiesIncreasing polarizationof societiesRising chronic diseasesRising chronic diseasesRising cyber dependencyRising cyber dependencyRising

6 Geographic mobilityRising income and wealthdisparityRising income and wealthdisparityShifting powerShifting powerRising urbanizationRising urbanizationUnmanageable inflationData fraud or theftAsset bubbles in a major economyDeflationFailure of financialmechanism or institutionFailure of criticalinfrastructureFiscal crisesUnemployment orunderemploymentIllicit tradeEnergy price shockExtreme weather eventsFailure of climate-changemitigation and adaptationBiodiversity loss andecosystem collapseNatural disastersMan-made environmentaldisastersFailure of nationalgovernanceFailure of regional orglobal governanceInterstate conflictTerrorist attacksState collapse or crisisWeapons of mass destructionFailure of urban planningFood crisesLarge-scaleinvoluntary migrationProfound socialinstabilitySpread of infectiousdiseasesWater crisesAdverse consequences oftechnological advancesCritical informationinfrastructure breakdownCyberattacksRising geographic mobilityIncreasing

7 PolarizationEconomicRisksGeopoliticalRis ksEnvironmentalRisksSocietalRisksTechnol ogicalRisksNumber and strengthof connections( weighted degree )RisksTrendsNumber and strengthof connections( weighted degree )Figure II: The Risks -Trends Interconnections Map 2018 Source: World Economic Forum Global Risks Perception Survey 2017 : Survey respondents were asked to select the three trends that are the most important in shaping Global development in the next 10 years. For each of the three trends identified, respondents were asked to select the Risks that are most strongly driven by those trends.

8 See Appendix B for more details. To ensure legibility, the names of the Global Risks are abbreviated; see Appendix A for the full name and Interconnection Mapinvoluntary migrationAsset bubbles in a major economyDeflationFailure of financialmechanism or institutionFailure of criticalinfrastructureFiscal crisesUnemployment orunderemploymentAdverse consequences oftechnological advancesIllicit tradeEnergy price shockUnmanageable inflationExtreme weather eventsFailure of climate-changemitigation and adaptationBiodiversity loss andecosystem collapseNatural disastersMan-madeenvironmentaldisastersF ailure of nationalgovernanceFailure of

9 Regional orglobal governanceInterstate conflictTerrorist attacksState collapse or crisisWeapons of mass destructionFailure of urban planningFood crisesLarge-scaleProfound socialinstabilitySpread of infectiousdiseasesWater crisesCritical informationinfrastructure breakdownCyberattacksData fraud or theftEconomicRisksGeopoliticalRisksEnvir onmentalRisksSocietalRisksTechnologicalR isksNumber and strengthof connections( weighted degree )Figure III: The Global Risks Interconnections Map 2018 Source: World Economic Forum Global Risks Perception Survey 2017 2018 .

10 Note: Survey respondents were asked to identify between three and six pairs of Global Risks they believe to be most interconnected. See Appendix B for more details. To ensure legibility, the names of the Global Risks are abbreviated; see Appendix A for the full name and of critical information infrastructureBreakdown of critical information infrastructure2008200920102011201220131s tAsset price collapseAsset price collapseAsset price collapseFiscal crisesMajor systemicfinancial failure Major systemicfinancial failure 2ndRetrenchment from globalization(developed)Retrenchment from globalization (developed)Retrenchment from globalization (developed)Climate change Water supply crisesWater supply crises3rdSlowing Chinese economy (<6%)