The World Economic Forum's three big risk-scenarios

              The Managing Director in charge of global risks at the World Economic Forum has focused attention on three big areas of risk: (http://www.nytimes.com/2012/01/11/opinion/the-failure-of-governance-in-a-hyperconnected-world.html)
              People everywhere perceive their living standards to be falling and express decreasing levels of confidence that their governments know what to do about it. Meanwhile both the Internet and urbanisation make disparities in wealth more transparent. Social contracts are breaking down in advanced economies, as shrinking workforces have to support growing populations of elderly while their own entitlements are being cut. And in emerging economies, sluggish global growth risks disappointing the expectations that a rising tide will lift all boats. And in the poorer countries, bulging youth populations lack the skills to succeed or the right to migrate. A combustible combination, as is suggested by social unrest in a number of parts of the world.
              The second risk is this: experts in many domains, from climate change to finance, to emerging technologies, worry that governance is lagging behind accelerating complexity. The policies, norms, regulations or institutions through which we manage the complex systems on which global prosperity depends are not responding to the dangers that we foresee. We need safeguards that are nimble and flexible and that give incentives to stakeholders to anticipate the threats.
              The third risk relates to the Internet. Almost a third of the global population is online and connectivity has transformed the ways in which we conduct business and personal relationships; and continues to grow. The dark side of connectivity considers the potential of terrorism, crime and war in the virtual world to become as deadly and disruptive as their equivalents in the physical world – where so much of the infrastructure of life is now managed by computers that we do not see or understand.
              None of these problems are insurmountable, the author suggests, but difficulties will arise if we try to apply traditional solutions to novel problems. At the bottom of the economic crisis it was suggested that in politics, in economics, in technology, and in society, radically new thinking was essential, but there have been very few signs of it.  

  

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One thought on “The World Economic Forum's three big risk-scenarios

  1. Government must lead in developing economies, but in the older established realm, government, like churches, is struggling to gain relevance. Legislation that could enable advancement is dead on arrival without favored channels of reward to affected industries and political power groups. The tranparency afforded by the internet, out dated intellectual property laws and burgeoning numbers of computer savvy young people in all parts of the world will outstrip the ability of status quo oriented bureaucracies to control or match them.

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