The Global Risks Report 2021 - World Economic Forum

1 The Global Risks Report 2021. 16th Edition INSIGHT Report . In partnership with Marsh McLennan, SK Group and Zurich Insurance Group The Global Risks Report 2021. 16th Edition Strategic Partners Marsh McLennan SK Group Zurich Insurance Group Academic Advisers National University of Singapore Oxford Martin School, University of Oxford Wharton Risk Management and Decision Processes Center, University of Pennsylvania The Global Risks Report 2021, 16th Edition, is published by the World Economic Forum . The 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 Report .

3 World Economic Forum . Cover artwork: Patrik Svensson 2021 All rights reserved. All rights reserved. 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 Forum . ISBN: 978-2-940631-24-7. The Report and an interactive data platform are available at Contents Preface CHAPTER 1. Hindsight: Reflections By Klaus Schwab and Global Risks 2021: on Responses to Saadia Zahidi 5 Fractured Future 15 COVID-19 72. CHAPTER 2. Executive Postscript: Foresight Summary 7 Error 404: Barriers to on Frontier Risks 84. Digital Inclusivity 29. Global Risks CHAPTER 3 Appendices Perception Survey Pandemials: Youth Appendix A: Descriptions 2020 Results 10 in an Age of Lost of Global Risks 2021 86.

4 Opportunity 39 Appendix B: Global Risks Perception Survey and Methodology 90. CHAPTER 4. Middle Power Morass: Navigating Global Divides 52 Acknowledgements 94. CHAPTER 5. Imperfect Markets: A. Disorderly Industrial Shakeout 62. The Global Risks Report 2021 4. Preface Klaus Schwab, Founder and Executive Chairman Saadia Zahidi, Managing Director In 2006, the Global Risks Report sounded the alarm safety nets and Economic structures beyond capacity. on pandemics and other health-related Risks . That Whether the gaps can be narrowed will depend on the year, the Report warned that a lethal flu, its spread actions taken in the wake of COVID-19 to rebuild with a facilitated by Global travel patterns and uncontained view towards an inclusive and accessible future. Inaction by insufficient warning mechanisms, would present on Economic inequalities and societal divisiveness may an acute threat.

5 Impacts would include severe further stall action on climate change still an existential impairment of travel, tourism and other service threat to humanity. industries, as well as manufacturing and retail supply chains while Global trade, investor risk appetites Growing societal fragmentation manifested and consumption demand could see longer-term through persistent and emerging Risks to human harms. A year later, the Report presented a pandemic health, rising unemployment, widening digital scenario that illustrated, among other effects, the divides, and youth disillusionment can have severe amplifying role of infodemics in exacerbating consequences in an era of compounded Economic , the core risk. Subsequent editions have stressed environmental, geopolitical and technological Risks . the need for Global collaboration in the face of The gap between the haves and have-nots.

6 Antimicrobial resistance (8th edition, 2013), the Ebola will widen further if technology access and ability crisis (11th edition, 2016), biological threats (14th remain disparate. The World 's youth have faced edition, 2019), and overstretched health systems (15th exceptional pressures in the past decade and are edition, 2020), among other topics. particularly vulnerable to missing out altogether on the opportunities of the next. In 2020, the risk of a Global pandemic became reality. As governments, businesses and societies survey For business, the Economic , technological and the damage inflicted over the last year, strengthening reputational pressures of the present moment risk strategic foresight is now more important than a disorderly shakeout, threatening to create a large ever. With the World more attuned to risk, there is cohort of workers and companies that are left behind an opportunity to leverage attention and find more in the markets of the future.

7 Governments, too, effective ways to identify and communicate risk to must balance between managing the pandemic and decision-makers. Economic contraction, while at the same time creating new opportunities that are fundamental to social It is in this context that we publish the 16th edition of cohesion and the viability of their populations. Most the World Economic Forum 's Global Risks Report . critically, if environmental considerations the top Our analysis centres on the Risks and consequences long-term Risks once again are not confronted in the of widening inequalities and societal fragmentation. In short term, environmental degradation will intersect some cases, disparities in health outcomes, technology, with societal fragmentation to bring about dramatic or workforce opportunities are the direct result of the consequences.

8 If managed poorly, these disruptions dynamics the pandemic created. In others, already- will hamper the ability of policy-makers and other present societal divisions have widened, straining weak leaders to act on different areas of risk. The Global Risks Report 2021 5. The foundation of the Report continues to be our Complementing the Global Risks Practice, the World annual Global Risks Perception Survey, completed by Economic Forum hosts major platforms dedicated over 650 members of the World Economic Forum 's to action on building a new economy and society, diverse leadership communities. In addition, the long- mobilizing for the climate, managing and disseminating standing and deeply committed Global Risks Advisory Fourth Industrial Revolution technologies, shaping Board shapes the direction of this Report from its industry transformations, and enhancing Global earliest stages, and provides insight throughout the and regional cooperation.

9 These platforms, and the writing process. Over the last year, we have also leaders, networks and organizations they host, apply expanded our efforts around risk and resilience the findings of this Report in their efforts to tackle the for decision-makers and for the broader Global World 's greatest challenges managing Risks , building community. A new Global Future Council on Frontier resilience and leveraging new opportunities. Such an Risks capitalizes on its diverse and forward-looking integrated approach has never been more critical than membership to inject fresh thinking into efforts to at present, as the World moves beyond managing the understand and mitigate future Risks and to amplify pandemic to resetting our current systems and building weak signals of coming disruptions in the decades back better economies and societies with people and ahead.

10 Their ideas are featured in the postscript on the planet at the centre of our efforts. Frontier Risks . A new Chief Risk Officers community brings together leaders in this role in the private sector and major institutions to share methods and views to collectively enhance capability. We are ever grateful to our long-standing partners in the Report 's development, Marsh McLennan and Zurich Insurance Group. We welcomed a new partner this year, SK Group, to whom we owe a debt of gratitude for the valuable inputs provided. We are also grateful to our academic partners: the National University of Singapore, the Oxford Martin School at the University of Oxford, and the Wharton Risk Management and Decision Processes Center at the University of Pennsylvania. Insights from a wide set of experts from the public and private sectors can also be found in these pages.