THE GLOBAL RISKS REPORT 2020 - INSIGHT REPORT 15TH EDITION IN PARTNERSHIP WITH MARSH & MCLENNAN AND ZURICH INSURANCE GROUP
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The Global Risks
Report 2020
Insight Report 15th Edition
In partnership with Marsh & McLennan and Zurich Insurance GroupExecutive Summary
The world cannot wait for the fog of increasing the risk of economic stagnation.
geopolitical and geo-economic uncertainty Low trade barriers, fiscal prudence and
to lift. Opting to ride out the current period strong global investment—once seen as
in the hope that the global system will fundamentals for economic growth—are
“snap back” runs the risk of missing crucial fraying as leaders advance nationalist
windows to address pressing challenges. policies. The margins for monetary and
On key issues such as the economy, the fiscal stimuli are also narrower than
environment, technology and public health, before the 2008–2009 financial crisis,
stakeholders must find ways to act quickly creating uncertainty about how well
and with purpose within an unsettled global countercyclical policies will work. A
landscape. This is the context in which the challenging economic climate may
World Economic Forum publishes the 15th persist this year: according to the Global
edition of the Global Risks Report. Risks Perception Survey, members of the
multistakeholder community see “economic
confrontations” and “domestic political
An unsettled world polarization” as the top risks in 2020.
Powerful economic, demographic and Amid this darkening economic outlook,
technological forces are shaping a new citizens’ discontent has hardened with
balance of power. The result is an unsettled systems that have failed to promote
geopolitical landscape—one in which advancement. Disapproval of how
states are increasingly viewing opportunities governments are addressing profound
and challenges through unilateral lenses. economic and social issues has sparked
What were once givens regarding alliance protests throughout the world, potentially
structures and multilateral systems no weakening the ability of governments to
longer hold as states question the value take decisive action should a downturn
of long-standing frameworks, adopt occur. Without economic and social
more nationalist postures in pursuit stability, countries could lack the financial
of individual agendas and weigh the resources, fiscal margin, political capital
potential geopolitical consequences of or social support needed to confront key
economic decoupling. global risks.
Beyond the risk of conflict, if stakeholders
concentrate on immediate geostrategic Climate threats and
advantage and fail to reimagine or adapt accelerated biodiversity loss
mechanisms for coordination during this
unsettled period, opportunities for action Climate change is striking harder and
on key priorities may slip away. more rapidly than many expected. The
last five years are on track to be the
warmest on record, natural disasters are
Risks to economic stability becoming more intense and more frequent,
and social cohesion and last year witnessed unprecedented
extreme weather throughout the world.
Recent editions of the Global Risks Report Alarmingly, global temperatures are on
warned of downward pressure on the track to increase by at least 3°C towards
global economy from macroeconomic the end of the century—twice what climate
fragilities and financial inequality. These experts have warned is the limit to avoid
pressures continued to intensify in 2019, the most severe economic, social and
6 Executive Summaryenvironmental consequences. The near- technology governance framework and
term impacts of climate change add up to cyber insecurity all pose significant risk.
a planetary emergency that will include loss Geopolitical and geo-economic uncertainty—
of life, social and geopolitical tensions and including the possibility of fragmented
negative economic impacts. cyberspace—also threaten to prevent the
full potential of next generation technologies
For the first time in the history of the Global from being realized. Respondents to our
Risks Perception Survey, environmental survey rated “information infrastructure
concerns dominate the top long-term breakdown” as the sixth most impactful risk
risks by likelihood among members of the in the years until 2030.
World Economic Forum’s multistakeholder
community; three of the top five risks by
impact are also environmental (see Figure I, Health systems under
The Evolving Risks Landscape 2007–2020). new pressures
“Failure of climate change mitigation and
adaption” is the number one risk by impact Health systems around the world are at
and number two by likelihood over the next risk of becoming unfit for purpose. New
10 years, according to our survey. Members vulnerabilities resulting from changing
of the Global Shapers Community—the societal, environmental, demographic and
Forum’s younger constituents—show technological patterns threaten to undo the
even more concern, ranking environmental dramatic gains in wellness and prosperity
issues as the top risks in both the short that health systems have supported over the
and long terms. last century. Non-communicable diseases—
such as cardiovascular diseases and mental
The Forum’s multistakeholder network illness—have replaced infectious diseases as
rate “biodiversity loss” as the second most the leading cause of death, while increases
impactful and third most likely risk for the in longevity and the economic and societal
next decade. The current rate of extinction costs of managing chronic diseases have
is tens to hundreds of times higher than the put healthcare systems in many countries
average over the past 10 million years—and under stress. Progress against pandemics is
it is accelerating. Biodiversity loss has critical also being undermined by vaccine hesitancy
implications for humanity, from the collapse and drug resistance, making it increasingly
of food and health systems to the disruption difficult to land the final blow against some
of entire supply chains. of humanity’s biggest killers. As existing
health risks resurge and new ones emerge,
humanity’s past successes in overcoming
Consequences of health challenges are no guarantee of
digital fragmentation future results.
More than 50% of the world’s population is
now online, approximately one million people
go online for their first time each day, and There is still scope for stakeholders to
two-thirds of the global population own a address these risks, but the window
mobile device. While digital technology is of opportunity is closing. Coordinated,
bringing tremendous economic and multistakeholder action is needed quickly
societal benefits to much of the global to mitigate against the worst outcomes
population, issues such as unequal and build resiliency across communities
access to the internet, the lack of a global and businesses.
The Global Risks Report 2020 7Figure I: The Evolving Risks Landscape, 2007–2020
Top 5 Global Risks in Terms of Likelihood
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Infrastructure Blow up in Asset price Asset price Storms and Income disparity Income disparity Income Interstate Involuntary Extreme Extreme Extreme Extreme
breakdown asset prices collapse collapse cyclones disparity conflict migration weather weather weather weather
1st
Chronic Middle East China economic China economic Flooding Fiscal Fiscal Extreme Extreme Extreme Involuntary Natural Climate action Climate action
diseases instability slowdown slowdown imbalances imbalances weather weather weather migration disasters failure failure
2nd
Oil price shock Failed and Chronic Chronic Corruption Greenhouse gas Greenhouse Unemployment Failure of Climate action Natural Cyberattacks Natural Natural
3rd failing states diseases disease emissions gas emissions national failure disasters disasters disasters
governance
China hard Oil price shock Global Fiscal crises Biodiversity loss Cyberattacks Water crises Climate action State collapse Interstate Terrorist Data fraud Data fraud Biodiversity loss
4th landing governance failure or crisis conflict attacks or theft or theft
gaps
Blow up in Chronic Deglobalization Global Climate change Water crises Population Cyberattacks Unemployment Natural Data fraud Climate action Cyberattacks Human-made
asset prices diseases (emerging) governance ageing catastrophes or theft failure environmental
5th gaps disasters
Top 5 Global Risks in Terms of Impact
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Blow up in Blow up in Asset price Asset price Fiscal crises Financial failure Financial failure Fiscal crises Water crises Climate action Weapons of Weapons of Weapons of Climate action
asset prices asset prices collapse collapse failure mass mass mass failure
1st destruction destruction destruction
Deglobalization Deglobalization Deglobalization Deglobalization Climate change Water crises Water crises Climate action Infectious Weapons of Extreme Extreme Climate action Weapons of
(developed) (developed) (developed) failure diseases mass weather weather failure mass
2nd destruction destruction
Interstate China hard Oil and gas Oil price spikes Geopolitical Food crises Fiscal Water crises Weapons of Water crises Water crises Natural Extreme Biodiversity loss
3rd and civil wars landing price spike conflict imbalances mass disasters weather
destruction
Pandemics Oil price shock Chronic Chronic Asset price Fiscal Weapons of Unemployment Interstate Involuntary Natural Climate action Water crises Extreme
diseases disease collapse imbalances mass conflict migration disasters failure weather
4th destruction
Oil price shock Pandemics Fiscal crises Fiscal crises Energy Energy Climate action Infrastructure Climate action Energy price Climate action Water crises Natural Water crises
price volatility price volatility failure breakdown failure shock failure disasters
5th
Economic Environmental Geopolitical Societal Technological
Source: World Economic Forum 2007-2020, Global Risks Reports.
Note: Global risks may not be strictly comparable across years, as definitions and the set of global risks have evolved with new issues emerging on the 10-year horizon. For example, cyberattacks, income disparity and unemployment entered the set of global risks in 2012.
Some global risks have been reclassified: water crises and income disparity were recategorized as societal risks in the 2015 and 2014 Global Risks Reports, respectively.The Global Risks Landscape 2020
Figure II: The Global Risks Landscape 2020
4.0 Climate
Climate aaction
ction
failure
failure
Weapons
W eapons ooff m
mass
ass
destruction
destruction
Biodiversity lloss
Biodiversity oss
Extreme weather
Extreme weather
Water c
Water crises
rises
Information
Information Natural disasters
Natural disasters
iinfrastructure
nfrastructure Cyberattacks
Cyberattacks
breakdown
b reakdown
Infectious d
Infectious diseases
iseases Human-made
H uman-made
environmental disasters
environmental d isaster
Interstate
Interstate Global
G governance
lobal g overnance
conflict
confl
fliict failure
failure
Food c
Food crises
rises
3.5
Financial
Financial ffailure
a i l u re
3.47
average Fiscal
Fiscal crises
crises Involuntary migration
Involuntary m igration
2.5 Data fraud
Data orr ttheft
fraud o heft
Unemployment
U n e mp l o yme n t Asset bubbles
Asset bubble
Social
Social instability
instability
Critical
Critical infrastructure
infrastructure National
N ational
ffailure
a i l u re governance
governance
failure
failure
State ccollapse
State ollapse
Terrorist
Terrorist attacks
attacks Adverse
Adverse technological
technological
advances
advances
Energy
Energy price
price shock
sh o ck
Unmanageable inflation
Unmanageable infl
flaation
3.0
Failure of
urban planning
Impact
Deflation
Illicit
Illicit ttrade
ra d e
2.5 3.0 3.5 4.0
3.31 plotted
average area
Likelihood 5.0
Top 10 risks in terms of Top 10 risks in terms of
1.0 5.0
Likelihood Impact
1 Extreme weather 1 Climate action failure
Categories
2 Climate action failure 2 Weapons of mass destruction
Economic
3 Natural disasters 3 Biodiversity loss
4 Biodiversity loss 4 Extreme weather Environmental
5 Human-made environmental disasters 5 Water crises
6 Data fraud or theft 6 Information infrastructure breakdown Geopolitical
7 Cyberattacks 7 Natural disasters
8 Water crises 8 Cyberattacks
Societal
9 Global governance failure 9 Human-made environmental disasters
Technological
10 Asset bubbles 10 Infectious diseases
Source: World Economic Forum Global Risks Note: Survey respondents were asked to assess the likelihood of the individual global risk on a scale of
Note: Survey respondents were asked to assess the likelihood of the individual global risk on a scale of 1 to 5, 1
Source: World
Perception Survey Economic
2019–2020.Forum Global Risks 1representing
to 5, 1 representing a risk that is very unlikely to happen and 5 a risk that is very likely to occur. They
a risk that is very unlikely to happen and 5 a risk that is very likely to occur. They also assess the impact
Perception Survey 2019–2020. also assessed
on each theonimpact
global risk a scale of each
of 1 global
to 5 (1: riskimpact,
minimal on a scale ofimpact,
2: minor 1 to 5,3:1moderate
representing
impact,a 4:
minimal impactand
severe impact and 5 a
catastrophic
5: catastrophicimpact.
impact). ToSeeensure
Appendixlegibility, thedetails.
B for more names To of the legibility,
ensure global risks are abbreviated;
the names seeare
of the global risks Appendix A for
abbreviated;
the full nameseeand Appendix A for the full name and description.
description.The Global Shapers Risks Landscape 2020
Figure III: The Global Shapers Risk Landscape 2020
Economic Environmental
Climate Biodiversity
action failure loss
Extreme
Human-made
weather
environmental
disasters Natural disasters
4.0 4.0
Critical
4.
Unemployment
Financial infra-
failure structure
failure Fiscal crises
Unmanageable
inflation Asset bubbles
3.5 Energy price shock 3.5
Deflation
Illicit trade
3.0 3.0
Impact
2.5 3.0 3.5 4.0 2.5 3.0 3.5 4.0
Likelihood
Geopolitical Societal
Water crises
Weapons of
mass destruction
Food 3.
crises
Infectious
diseases
4.0 Interstate 4.0
conflict
Terrorist State
attacks collapse Global governance failure Involuntary
migration
National Failure of
governance urban planning
failure
3.5 3.5
Social instability
3.0 3.0
Impact
2.5 3.0 3.5 4.0 2.5 3.0 3.5 4.0
Likelihood
Technological Respondents 3.
Cyberattacks
Multistakeholder Shapers
4.0 Information
infrastructure
breakdown
Data fraud or theft
The Global
The Global Shapers
Shapers Community
Communityisisthe
theWorld
World
Economic Forum’s network
Economic Forum’s networkof
ofyoung
youngpeople
people
3.5 driving dialogue, action
driving dialogue, actionand
andchange.
change.
Adverse
technological
advances Source: World Economic Forum Global Risks Perception Survey 2019–2020.
Note: We applied the same completion thresholds to survey responses from the
Global Shapers as to the multi-stakeholder sample (see Appendix B: Global Risks
3.0 Note: We applied the same completion thresholds to survey responses from the
Impact
Perception Survey and Methodology).
Global Shapers as to the multistakeholder sample (see Appendix B: Global Risks
Perception Survey
We received 236 and Methodology).
responses for Part 1 “The World in 2020” and 190 for Part 2
“Assessment of Global Risks”. The data for Part 3 “Global Risk Interconnections”
was received
We not used. 236 responses for Part 1 “The World in 2020” and 190 for Part 2
2.5 3.0 3.5 4.0 “Assessment of Global Risks”. The data for Part 3 “Global Risk Interconnections”
Likelihood were not used.Figure IV: The Global Risks Interconnections Map 2020
The Global Risks Interconnections Map 2020
Natural d
Natural disasters
isasters
.0
E
Extreme
xtreme w
weather
eather Human-made
H uman-made
environmental disaster
environmental
disasters
Infectious diseases
Infectious diseases
Food c
Food crises
rises B
Biodiversity
iodiversity lloss
oss
F
Failure
ailure o
off
u
urban
rban planning
planning
G lobal
Global
ggovernance
overnance Weapons
Weapons of
d
of mass
mass
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estruction
ffailure
ailure
Water c
Water crises
rises Climate
C limate action
action
failure
failure
Critical
Critical infrastructure
infrastructure
.5 failure
failure
Average
IInterstate
nterstate
3.47 Involuntary
Involuntary migration
migration c
conflict
onfl
fliict
IInformation
nformation National
National
iinfrastructure
nfrastructure governance
governance
breakdown
breakdown failure
failure Illicit
Illicit trade
trade
Cyberattacks
Cyberattacks
Social
Social instability
instability
Terrorist attacks
Terrorist attacks
State
State collapse
collapse
D
Data
ata fraud
fraud A
Adverse
dverse ttechnological
echnological
o
orr theft
theft a
advances
dvances Energy price
Energy price shock
shock
Unemployment
Unemployment
Fiscal crises
Fiscal crises
F
Financial
inancial failure
failure
.0 U
Unmanageable
nmanageable iinflation
nfl
flaation
Asset
Assetbubbles
bubble Deflation
Defl
flaation
2.5 3.0 3.5 4.0
Average
Likelihood 3.32
Economic Geopolitical Technological
Risks Risks Risks
Number and strength
Environmental Societal of connections
Risks Risks (“weighted degree”)
Source: World Economic Forum Global Risks Note: Survey respondents were asked to select up to six pairs of global risks they believe to be most
Note: Survey respondents were asked to select up to six pairs of global risks they believe to be most interconnected.
PerceptionWorld
Source: SurveyEconomic
2019–2020.Forum Global Risks See interconnected. Seedetails.
Appendix B for more Appendix B oflegibility,
To ensure the fullthe
report
namesforofmore details.
the global risks To
are ensure legibility,
abbreviated; the the names
see Appendix A for of
Perception Survey 2019–2020. fullglobal
names risks are abbreviated; see Appendix A for the full name and description.
and descriptions.The World Economic Forum, committed to improving the state of the world, is the International Organization for Public-Private Cooperation. The Forum engages the foremost political, business and other leaders of society to shape global, regionaland industry agendas. World Economic Forum 91–93 route de la Capite CH-1223 Cologny/Geneva Switzerland Tel.: +41 (0) 22 869 1212 Fax: +41 (0) 22 786 2744 contact@weforum.org www.weforum.org
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