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Albert Vilario Alonso Follow

Consultant in Corporate Social Responsibility, Sustainability, Reputation and Corporate Communicatio
Sep ? A min read

Global risks and opportunities

2017.

Photo by Dikaseva on Unsplash

NOTE: This article was first published in Spanish and can be four here.

As it happened last year at this time, we have two new editions of classic
reports on risks and opportunities.

I refer specifically to The Global Risks Report 2017 12th Edition of

the World Economic Forum (WEF) and Global Opportunity Report
2017 published to coincide with the Forum of Davos.

Global risks: climate change and violence in

various variants.
According to the World Economic Forum report, the evolution of risks
over the last 10 years has been as follows:

Source: The Global Risks Report 2017 12th Edition.

We see in terms of risk ranking according to their probability of

occurrence (upper table), the probability of extreme climatological events
has risen to the first position, followed by large-scale involuntary
immigrations and major natural disasters. The likelihood of large-scale
terrorist attacks and massive incidents involving fraud and information
theft appear for the first time in 10 years, in the fourth and fifth place.

Regarding the ranking according to the severity of impact (lower tables),

we have that weapons of mass destruction have gone up a step to the first
place, followed by extreme weather events, water crises, major natural
disasters, And failure to adapt and mitigate climate change.

Therefore, climate change and the consequences derived from it continue

to cover the most pressing risks for our planet and our society.

There are a number of trends that determine development and are closely
related to the risks discussed. The first five trends in order of
importance are:

Increasing disparity of income and wealth.

Climate change.

Increasing polarization of societies.

Increasing dependence on computers.

Aging population.

The following graph shows the interrelationships between these

trends and the risksmentioned above (and also others with less impact
probability of occurrence).

Source: The Global Risks Report 2017 12th Edition.

It is also worth highlighting the existence of other important trends, but

with a lower number and strength of connections with the risks, such as
increasing urbanization or the rise of the middle class in emerging
economies.

We can not consider the risks as if they were a sort of independent entities
with no relation between them. The fact that a risk materializes or not does
condition that others also do so with a probability of occurrence and an
impact on the rest. That is, the risks are related and after asking the
respondents to identify between three and six pairs of global risks that they
believed were more interconnected, the following graph was made.

Source: The Global Risks Report 2017 12th Edition.

We observed a total of 30 different risks and their interconnections. Those

that have a greater number and strength of connections are represented by
a larger diamond and correspond to:

Unemployment and underemployment.

Deep social instability.

Involuntary migration on a large scale.

Collapse or crisis of the States.

Failure to mitigate and adapt to climate change.

Water crises.

Failure of national governments.

Deep social instability.

Conflicts between States with regional consequences.

The report offers a lot of relevant information but, in addition to the

aforementioned, I find interesting the treatment given to the disruptive
impact of emerging new technologies.

Almost without realizing it, a number of technologies have emerged around

us that until recently seemed unthinkable or science fiction, and which
bound to change (or are already changing) our life in many ways. These
changes obviously also have a bearing on the risks we can face, and the
report takes that into account.

Respondents had to decide how new technologies contribute to these

global risks and the result can be seen in the following graph, where
artificial intelligence and robotics are placed in the first position to
contribute to magnify economic, geopolitical and technological risks.

Source: The Global Risks Report 2017 12th Edition.

The possibility that new technologies exacerbate global risks (coupled with
its novelty, its ethical implications, the legal gaps in some of them, along
with other reasons) generates a concern about how they are going to be
implemented and how they will be implemented and controlled.

The report takes that concern into account and when it asks respondents
which of those technologies they think should have better governance, the
result is that artificial intelligence and robotics alongside biotechnology
stand out clearly from the rest, as we see next.

Source: The Global Risks Report 2017 12th Edition.

Global Opportunities: Technology will be a

key factor in tomorrows markets.
For its part, the Global Opportunity Report 2017 coincides more this
time with the global risks of the WEF compared to what happened last year.

We will now review the overall risks of the report and the opportunities
arising from them.

Regional instability.

More people than ever have been displaced due to conflicts around the
world along with millions more affected indirectly. The seriousness of these
crises makes it clear that all actors, including entrepreneurs, will have to
play a role in the restoration of conflict zones.

The opportunities that derive from the above are:

Knowledge for Peace: Educating and revalorizing a workforce can be

a catalyst for stabilizing the regions. The ubiquity of the internet offers
great opportunities to reach out to potential students outside the
classical classroom.

Conflict-free natural resources: Securing conflict-free natural

resources through a transparent supply chain enables companies to
meet the demand for open and accountable value chain practices.

Immediate shelter: Refugee camps need the functionality of a normal

city instantly. Putting the power of innovation in the hands of those most
in need can create an instant refuge.

Soil impoverishment.

40% of the land used for agriculture worldwide is degraded or seriously

degraded. Our soil is losing its ability to perform its essential service for
humans to survive. Overexploitation has reduced the soils ability to retain
water and nutrients, produce food and absorb CO2.

The opportunities that derive from the above are:

Living in the Air: Finding ways to grow food without land represents a
huge opportunity. Living in the air, using techniques such as vertical
agriculture, can allow agriculture to do more with less.

Keeping our soils alive: By adding bacteria and fungus supplements,

depleted soils have the potential to regenerate back into land.

Moisture Technology: New technologies are allowing soils to act like

sponges, retaining water and making crop yields less dependent on
precipitation and predictable temperatures.

Increasing inequalities.

Inequality within countries is increasing, resulting in devastating economic

and social impacts. The fight against inequalities related to gender, race,
ethnicity and social class will be of paramount importance in the coming
years.

The opportunities that derive from the above are:

Smart Codes to Stop Inequality: Blockchain technology uses smart

codes to stop inequality, allowing people around the world to take
control over their digital identities, access bank accounts, insurance, and
many other financial services.

Gender Equality: Innovative time and labor-saving technologies can

free up time spent on domestic work, and progressive advertising can
help challenge gender norms that lead to unequal workloads of domestic
work for women.

Peoples Internet: Peoples mobile technologies and the internet are

opening up the accessibility of health care, particularly for low-income
remote communities, benefiting both the needy and the business
interests.

Cities affected by climate change.

Urbanization and climate change threaten to be a dangerous mix. More and

more people are moving towards urban areas, adding new tensions an
already vulnerable infrastructure. At the same time, climate change
threatens to disrupt the basic components of urban life.

The opportunities that derive from the above are:

Energy business: The energy business is promoting micro grids that

are more resilient against climate-induced disruption than large-scale
networks, and that connect individual energy producers and consumers.

Smart Water Tech: Intelligent water technology, which uses smart

sensors and cloud data management to improve water infrastructure,
will be critical to providing access to clean and safe water for urban
citizens around the world.

Housing Improvement: Improving housing through the creation of

resilient, robust and climate-resistant housing will help slum
communities better manage climate problems and improve livelihoods.

Computer threats.

In an increasingly connected and digitized world, it is increasingly

important to address the threat of cyber crime. While the digitization of our
core infrastructure is providing huge prospects, such as the Internet of
Things, it also poses a threat to day-to-day operations.

The opportunities that derive from the above are:

Intelligent cyber security: Intelligent cyber security offers a promising

opportunity as it employs adaptive algorithms that can detect and respond
to threats in real time, stopping security holes before serious damage can be
done.

Behavioral Biometrics: Behavioral biometrics uses measurable

behavioral traits to verify identity, providing a new layer of security for
companies and individuals and opening a new market for security products.

Computer security games: Motivating people with games and inviting

ethical hackers to test system security measures aims to make a bit more
attractive and offer better protection from digital intrusions.

The Sustainable Development Goals:

potential for business.
Lastly, and as has been discussed at length from the time they were
presented, the Sustainable Development Goals (SDG) are viewed with
good eyes by the respondents of this study, recognizing their potential for
the development of their businesses.

The SDG that more interest for business are:

SDG 8: Decent work and economic growth.

SDG 3: Health and well-being.

SDG 9: Industry, and infrastructure.

SDG 15: Life of terrestrial ecosystems.

SDG 7: Affordable and non-polluting energy.

Below we can see in the graph the rest of ODS and the percentages of
respondents that opt for each one of them.

Below we can see in the graph the rest of SDG and the percentages of
respondents that opt for each one of them.

Source: Global Opportunity Report 2017.

Climate Change Risk Sustainability Risk Management Opportunity

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Albert Vilario Alonso Follow

Consultant in Corporate Social Responsibility, Sustainability, Reputation and
Corporate Communication,and integration of people with disabilities.

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