January 2023 Global Risks Report 2023 Conclusion: is preparedness possible? 4 Conclusion: is preparedness possible? While ongoing shocks unfold, the world stands mixed. The underestimation of – and therefore lack at a crossroads. As we enter a low-growth, low- of preparedness for – emerging macro risks (like investment and low-cooperation era, the actions that “grey rhinos” and “black swans”) re昀氀ect challenges we take today will dictate our future risk landscape. posed by high levels of uncertainty, low levels of We must ensure that addressing current crises does information, con昀氀icting data and cognitive biases. not detract from the longer-term view. Yet systematic progress is possible. Enhanced risk identi昀椀cation and foresight can be a key enabler Recent and current events such as COVID-19 for strategic decision-making, agenda-setting and and the cost-of-living crisis are steadily eroding resilience measures, helping to prioritize areas that economic, educational and health-related gains would bene昀椀t from data collection and monitoring, in a widening proportion of the population, with risk controls and resources, and redundancies. a growing divergence between advanced and developing countries. This in turn is interacting with The 昀椀rst task of foresight is to identify future a multiplicity of environmental and geopolitical risks developments, risks and opportunities. Both horizon – climate change, ecosystem collapse, multi-domain scanning and scenario planning are useful tools con昀氀icts – to further threaten the security and that can examine and build on “weak signals” in stability of societies around the world. qualitative and quantitative data sources to better anticipate emerging trends. Established methods 1 In this context, defensive, fragmented and crisis- can help crystallize expert disagreements, while a oriented approaches are short-sighted and often greater distinction between risk and uncertainty – perpetuate vicious cycles. Lack of preparedness imperfect knowledge, such that likelihood cannot be for longer-term risks will destabilize the global risks scienti昀椀cally quanti昀椀ed or known – will help challenge landscape further, bringing ever tougher trade-offs core assumptions. Greater levels of uncertainty for policy-makers and business leaders scrambling should shift the focus from the probable to the to address simultaneous crises. A rigorous approach possible: the study of potential outcomes needs to foresight and preparedness is called for, as we to be expanded to ensure that risk mitigation and aim to bolster our resilience to longer-term risks and preparedness addresses the full scope of possible 2 chart a path forward to a more prosperous world. impacts. This is then complemented by risk monitoring, which focuses on providing early warning Each risk requires concerted, speci昀椀c and for when speci昀椀c risks are about to materialize to customized efforts but several cross-cutting enable advanced preparedness measures. principles can support preparedness across themes. In this concluding section, we outline four principles Another step to enhance risk foresight is to explore for preparedness in this new era of concurrent dynamics of change, to map interconnections shocks: 1) strengthening risk identi昀椀cation and between risks, including dependencies between foresight, 2) recalibrating the present value of “future” critical systems. More sophisticated methods risks, 3) investing in multi-domain risk preparedness, of analyzing interconnected risks (beyond linear and 4) strengthening preparedness and response relationships) can support the evaluation and cooperation. prioritization of risk resources. Risks that are most in昀氀uenced by or exposed to other risks will be the most challenging to mitigate, while those that exert Improving risk identi昀椀cation an outsized in昀氀uence on the outcome of the network and foresight can be prioritized as key points of intervention. The need for a systemic view of and approach to global risks is re昀氀ected in the rising call for the appointment A wide range of disciplines aim to gather intelligence of National Risk and Resilience Of昀椀cers, to mirror the about the future, ranging from economics, business increasingly important role of the Chief Risk Of昀椀cer management, investment funds and insurance, in the private sector. While the mandate of this role to urban planning, climatology, virology and civil may vary in practice, it re昀氀ects the need for a cross- protection – but the track record around the use of cutting and whole-of-society view around external 3 foresight to enhance risk mitigation efforts remains risk foresight, mitigation and crisis management. Global Risks Report 2023 69