Chronic Wealth Gap Biggest Global Risk – WEF

Chronic income disparity between the world’s rich and poor has been voted the most likely risk to cause an impact on a global scale within the next decade.

The study by the World Economic Forum found that extreme weather events, unemployment and underemployment, climate change and cyber attacks were the next most likely risks “to cause systematic shock on a global scale”.

The Global Risks report assessed 31 risks that are global in nature with the potential to cause significant negative impact across entire countries and industries across a 10-year outlook. Over 700 global experts contributed to the study.

“Each risk considered in this report holds the potential for failure on a global scale; however, it is their interconnected nature that makes their negative implications so pronounced as together they can have an augmented effect,” said Jennifer Blanke, chief economist at the World Economic Forum.

“It is vitally important that stakeholders work together to address and adapt to the presence of global risks in our world today.”

The report also studied the most potentially impactful global risks with fiscal crises named as the risk with the most potential to have an impact over the next decade.

Two environmental risks – climate change and water crises – followed by unemployment and underemployment and critical information infrastructure breakdown rounded out the top five.

The study also considered the twin challenges facing the young populate in the current decade with reduced employment opportunities and the rising cost of education, and the impact on political and social stability as well as economic development.

“Many young people today face an uphill battle. As a result of the financial crisis and globalisation, the younger generation in the mature markets struggle with ever fewer job opportunities and the need to support an ageing population,” said David Cole, group chief risk officer at Swiss Re.

“While in the emerging markets there are more jobs to be had, the workforce does not yet possess the broad based skill-sets necessary to satisfy demand. It’s vital we sit down with young people now and begin planning solutions aimed at creating fit-for-purpose educational systems, functional job-markets, efficient skills exchanges and the sustainable future we all depend on.”