We’re very good at managing conventional risk that can be isolated but don’t know how to deal with risks in complex, interconnected systems such as society and the environment, that can lead to the danger of a runaway collapse or an abrupt transition to a new normal.
That is the view of the World Economic Forum (WEF) in its Global Risks Report 2018.
The good news is that we aren’t likely to be annihilated – it looks like weapons of mass destruction are under control.
The two areas that stand out are extreme weather as a result of climate change and the changing cybersecurity landscape.
The Paris Agreement was a major step towards global consensus on taking action on climate change, with nearly all countries making national plans to address global warming, that starts in 2020.
Which brings to mind a quote by Mark Feldman and Michael Spratt…
Five frogs are sitting on a log. Four decide to jump off. How many are left? Answer: 5. Why? Because there’s a difference between deciding and doing
Tackling environmental issues is one of the most difficult challenges we face. There are many views that range from support to opposition, while all the time biodiversity shrinks and pollution increases.
We’re seeing the impact of this in more and more extreme weather, from hurricanes to droughts – and the question is whether society will respond in the right way in time.
Which leads us to geopolitics and an increasing trend towards nationalism and self-interest.
Populist politics coupled with protectionism increases mistrust between nation states, and the increasing rhetoric results in overt and covert action being taken between countries.
Cybersecurity is one such area, where attackers motivated by money play in the same space as government agencies looking to test and penetrate other countries.
The UK set up the National Cyber Security Centre in response which includes a policy of Active Cyber Defence (ACD) that takes down bad websites, maintains lists of good sites and “do things to demotivate our adversaries in ways that only GCHQ can do”
We’re all going to have to get much better at protecting ourselves online, because we’re going to get hit at some point.
The WEF thinks that the risk of an energy price shock is low.
That makes sense, given that we are awash in gas and plummeting renewables prices. There is still a big job to upgrade the infrastructure to deal with an electrified heating and transport system, but there is plenty of commodity out there.
Which hasn’t stopped prices bouncing up over the last two years, however, and the continuing geopolitical uncertainty may support them for longer.
So what should we do?
The basics – scan the horizon, assess the risks and make crisis plans.
For example, what would we do if our servers went down today or our employees couldn’t enter the country?
We need to be prepared for a range of outcomes.