The five biggest risks to doing business globally do not include Brexit, populism, or terrorism, according to the World Economic Forum’s benchmark “Global Risks” report for 2017.
WEF said the following five themes that pose the greatest risks are:
1. Unemployment or underemployment.
2. Energy price shock.
3. Fiscal crises.
4. Failure of national governance.
5. Profound social instability.
“This year’s findings are testament to five key challenges that the world now faces. The first two are in the economic category, in line with the fact that rising income and wealth disparity is rated by GRPS respondents as the most important trend in determining global developments over the next 10 years,” said WEF in the report.
“This points to the need for reviving economic growth, but the growing mood of anti-establishment populism suggests we may have passed the stage where this alone would remedy fractures in society: reforming market capitalism must also be added to the agenda.”
Technological advancements is the catalyst for the biggest global risk
WEF said in the report that the biggest risks — unemployment or underemployment — are largely borne out of huge technological change.
“Although anti-establishment politics tends to blame globalization for deteriorating domestic job prospects, evidence suggests that managing technological change is a more important challenge for labour markets,” said the report.
“While innovation has historically created new kinds of jobs as well as destroying old kinds, this process may be slowing. It is no coincidence that challenges to social cohesion and policy-makers’ legitimacy are coinciding with a highly disruptive phase of technological change.”
This follows neatly on from what WEF warned about exactly one year ago. In a report, entitled “The Future of Jobs,” it said that skills and jobs displacement will affect every industry and geographical region.
WEF estimated that 7.1 million jobs could be lost through redundancy, automation, or disintermediation, while the creation of 2.1 million new jobs, mainly in more specialised areas such as computing, maths, architecture, and engineering, could partially offset some of the losses.