WEF 2024 Top Risks: 2-year Horizon

By Michael Santulli and Sean Wu‍

In our second blog on the Global Risks Report 2024, we delve into the short-term horizon, spotlighting risks set to intensify over the next two years. The short-term challenges of today are interlinked with potential long-term issues, presenting an opportunity for proactive measures. This blog breaks down the main points, highlights the top risks expected by 2026, and offers insights from the Global Risks Perception Survey 2023-2024 (GRPS2023-2024). We will also discuss strategies for risk reduction and the importance of Enterprise Risk Management (ERM) in tackling these challenges. For a long-term horizon, please refer to our blog on the 10-year outlook of the global risks.

What to Expect in the Short Term

The GRPS 2023-2024 survey shows different views on what the next two years might bring. Here’s what people are saying:

• 54% of respondents think we will face instability and moderate challenges soon. They expect disruptions that could affect our daily lives and economic stability.
• 27% believe things will be even more turbulent. They worry about significant problems that could impact various sectors, including the economy and politics.
• Only 3% believe we’re heading straight into a severe disaster. This small group thinks we are on the brink of a major crisis.
• Just 16% think things will stay stable. They believe the current conditions will continue without major changes.

Many people are concerned about the future. They expect more instability and believe these concerns will grow. Looking ten years ahead, nearly two-thirds of respondents anticipate ongoing challenges and risks we may face over the next decade.

Top Risks for 2024

According to the survey, here are the top five global risks for 2024:

1. Extreme Weather – 66% of people are worried about severe weather events like storms and floods. These can cause immediate damage and affect our natural resources.
2. AI-Generated Misinformation – 53% are concerned about false information created by artificial intelligence. This misinformation can mislead people and influence their opinions.
3. Societal and Political Divisions – 46% worry about growing divides in society and politics. Increasing polarization can lead to unrest and weaken democratic systems.
4. Cost-of-Living Crisis – 42% are troubled by rising living costs. High prices can strain family budgets and lead to financial problems.
5. Cyberattacks – 39% see cyberattacks as a major threat. These attacks can disrupt services, steal data, and cause harm.

Top 10 Global Risks for the Next Two Years (2026)

Looking ahead to 2026, here are the ten biggest risks:

1. Misinformation and Disinformation – False information will continue to damage trust in media and institutions.
2. Extreme Weather Events – Severe weather will likely increase, causing more damage and affecting our natural resources.
3. Societal Polarization – Growing divides between social and political groups can lead to conflict and unrest.
4. Cyber Insecurity – The risk of cyberattacks will remain high as technology advances.
5. Interstate Conflicts – Tensions between countries could lead to conflicts, affecting global stability.
6. Lack of Economic Opportunity – Limited job prospects and financial hardships can lead to social unrest.
7. Inflation – Rising prices can hurt purchasing power and lead to economic problems.
8. Involuntary Migration – Forced migration due to conflicts or economic hardship will continue to be a major issue.
9. Economic Downturn – Economic slowdowns could impact growth and create financial challenges.
10. Pollution – Ongoing environmental pollution will pose risks to health and ecosystems.

Key Challenges for 2026

By 2026, several major challenges will shape the global landscape:

• Misinformation and Disinformation: False information will continue to be a big problem, especially in elections. This can destabilize societies and undermine trust in institutions.
• Geopolitical Hotspots: Areas like Ukraine, Israel, and Taiwan are at high risk for conflict. Tensions in these regions could have wide-ranging effects on global stability.
• Economic Issues: Inflation and economic downturns will be significant concerns. Inflation can reduce buying power, while economic slowdowns can lead to job losses and financial strain.
• Societal Division: Increasing polarization can lead to bias and conflict, making it harder to address collective challenges. Promoting dialogue and understanding will be important for reducing these divides.
• Cybersecurity: With the rise of digital threats, protecting data and systems from cyberattacks is essential. Strong cybersecurity measures and international     cooperation are needed to tackle these challenges.

How to Handle these Risks

To effectively manage these risks, consider the following strategies:

• Economic Planning: Businesses and governments should prepare for economic risks by managing inflation and planning for potential downturns. Supporting     small businesses and heavily indebted countries will be important for maintaining economic stability.
• Addressing Societal Division: To reduce societal polarization, encourage dialogue and understanding between different groups. Improving education and     supporting mental health initiatives can also help bridge divides.
• Enhancing Cybersecurity: Strengthening cybersecurity involves investing in new technologies and fostering international cooperation. Protecting data and     systems from cyber threats is crucial for ensuring safety and stability.
• Risk Reduction: Effective risk reduction strategies are essential for managing and minimizing the impact of challenges. Enterprise Risk Management (ERM) plays a vital role in this process. ERM helps organizations identify, assess, and manage risks in a structured way, allowing them to respond effectively to potential issues.

Looking Ahead: Working Together

In summary, the next two years will bring a mix of risks, including misinformation, geopolitical tensions, economic issues, societal division, and cyber threats. Addressing these challenges requires global cooperation and a focus on interconnected risks. By working together and using effective risk reduction strategies, including robust Enterprise Risk Management, nations and organizations can build resilience, promote stability, and ensure well-being for people around the world. For tailored Enterprise Risk Management services that address risks in your organization, contact us today. Our experts are ready to help!