Global Risks Report (GRR) unveils the six interrelated trends changing the face of Asia-Pacific
Rising economic inequality, mounting demographic pressures, persisting international security concerns, complex global economic transitions, environmental risks, and further technological advances are the six interrelated trends being acutely felt across Asia-Pacific, according to 2017’s Global Risks Report (GRR).
One of the flagship publications of the World Economic Forum (WEF), supported by Marsh & McLennan and Zurich, the GRR brings together the viewpoints of 12,400 executives from 136 countries and is used to inform discussion on emerging risk trends.
This year’s report stated that businesses need to anticipate the potential disruptions caused by rising economic inequality, including the likely strain on labour relations that would cause increases in strikes and protests.
“Businesses should focus on maintaining labour relations and implementing talent management programs,” said the report.
“Existing pension structures may need to be revamped to help prepare for the impact of technology on the future of jobs and an increasingly aging workforce.”
It continued that companies should safeguard against disruptions from rising protectionism, such as sudden changes in trade policies, taxes or tariff regulations.
“Environmental risks continue to increase in likelihood and impact, and pose a major threat to global supply chains. Simultaneously, the growing focus on environmental and climate concerns from both Asian governments and the private sector has also brought about new market trends that represent significant investment opportunities.”
The report stated that while technological advancements can greatly benefit businesses, executives should also be wary of the wide-ranging disruptive effects new technologies can bring.
“Businesses will have to mitigate a wide range of future market disruptions, including deployment risk, cyber security issues, unknown liabilities and the changing nature of work,” it stated.
Based on current trends, the report stated that it is expected that trade risks in an era of rising protectionism and the changing nature of work due to technological impacts, will be two of the most impactful risk trends for businesses going forward.
The 2017 GRR also identified five “gravity centres” that will impact global risks this year and beyond:
1. The first covers the impact of ongoing slow economic growth, compounded by high debt levels and unfavorable demographic changes, which has resulted in a world more exposed to financial crises with increasing inequality.
2. The second is the increasing polarisation of society and fracturing of communities as a result of frayed identity politics.
3. The third concerns the rapid advancement of technology – heralded as the Fourth
Industrial Revolution – which has not only brought about new opportunities but also major disruptions to almost every facet of life.
4. The fourth deals with the deteriorating commitment to global cooperation, signaled by the rise of populist and protectionist governments.
5. Finally, environment-related risks and ineffective management of the “global commons” continue to be a prime concern for leaders around the globe.