Increased Cyber Security Can Save Global Economy Trillions
Source: World Economic Forum
Failing to improve cyber security could cost the world economy and lead to more frequent cyberattacks, according to a new report released today by the World Economic Forum in collaboration with McKinsey & Company.
The Risk and Responsibility in a Hyperconnected World report addresses options that institutions can take to improve cyber resilience and mitigate the economic and strategic impact of such attacks. With the recent proliferation of cyberattacks, corporate executives need to devote increasing attention to protecting information assets and on-line operations.
The report notes that major technology trends, including massive analytics, cloud computing and big data, could create between US$ 9.6 trillion and $US 21.6 trillion in value for the global economy. However, if attacker sophistication outpaces defender capabilities – resulting in more destructive attacks – a wave of new regulations and corporate policies could slow innovation, with an aggregate impact of approximately US$ 3 trillion by 2020.
Seven Principles for Adapting to the New Digital World
Source: World Economic Forum
- New principles developed through World Economic Forum call for global collaboration to address the borderless nature of digital media
- Internet users report relatively low awareness of laws regulating the use of digital content
- Over 100 experts from media and technology industry, government, civil society and thought leaders, including innovators and artists, contributed to the principles
The chronic gap between the incomes of the richest and poorest citizens is seen as the risk that is most likely to cause serious damage globally in the coming decade, according to over 700 global experts that contributed to the World Economic Forum’s Global Risks 2014 report, released today.
Taking a 10-year outlook, the report assesses 31 risks that are global in nature and have the potential to cause significant negative impact across entire countries and industries if they take place. The risks are grouped under five classifications – economic, environmental, geopolitical, societal and technological – and measured in terms of their likelihood and potential impact.
Most likely global risks: After income disparity, experts see extreme weather events as the global risk next most likely to cause systemic shock on a global scale. This is followed by unemployment and underemployment, climate change and cyberattacks.
Most potentially impactful global risks: Fiscal crises feature as the global risk that experts believe has the potential to have the biggest impact on systems and countries over the course of the next 10 years. This economic risk is followed by two environmental risks – climate change and water crises – then unemployment and underemployment, and then critical information infrastructure breakdown, a technological risk.
Euro, Dollar, Yuan Uncertainties: Scenarios on the Future of the International Monetary System (PDF)
Source: World Economic Forum
The rapid integration of global trade and capital flows over the past decades has made the links that connect different parts of the world economy ever more central to global prosperity. Yet the practices and institutions that regulate these links – the international monetary system – as well as the main international currencies that underpin this system are increasingly challenged.
Against this backdrop, it is clear the current dollar-based international monetary system needs to evolve. But how it will evolve is highly uncertain. The widespread view is that the world is moving towards a multipolar currency system based on the euro, dollar and yuan. But each of these currency areas faces the need for significant internal adjustments that constrain their future international roles:
- The Eurozone is plagued by a weak governance structure, fragmented sovereign debt markets and an uncertain growth outlook.
- The United States must contend with a dim fiscal position, a persistently large trade deficit and a political system at risk of resorting to protectionism.
- If the yuan is to rise to international significance, China will have to ensure continued growth, resolve systemic weaknesses in its financial system and address limitations stemming from its system of capital controls.
These adjustment processes play out as complex two-level games. While at the global level synchronous and coordinated adjustments between individual players may be desirable, the challenges they face at the national and regional levels may direct them to take decisions that can lead to sub-optimal global outcomes.
This report explores the critical uncertainties underlying the future international roles of the euro, the dollar and the yuan and posits three plausible and divergent scenarios for the international monetary system in 2030, based on policy choices in each of the currency areas.
Talent, the ability to innovate and the strategic use of public policy will play a significant role in defining manufacturing sector competitiveness in developed and emerging economies going forward, finds The Future of Manufacturing, a report by the World Economic Forum. Written in collaboration with Deloitte Touche Tohmatsu Limited, the study finds that the global manufacturing ecosystem is undergoing a dramatic transformation, with many emerging economies developing significant manufacturing and innovation capabilities, enabling them to produce increasingly complex products, leading to the globalization of manufacturing supply chains. Fading labour rate arbitrage, exposure to currency volatility, sovereign debt pressures and emerging protectionist policies will be countervailing forces to further globalization of manufacturing value chains.
The report highlights the key trends that will define manufacturing competition over the next 20 years and which will require the attention and collaboration of policy-makers, civil society and business leaders. With an estimated 10 million jobs with manufacturing organizations worldwide that cannot be filled today due to a growing skills gap, the report identifies talent as one of the key differentiators that will define the future of the sector. The other top differentiators identified in the report include the strategic use of public policy and the ability to innovate. The infrastructure necessary to enable manufacturing to flourish and contribute to job growth will grow in importance and sophistication and be challenging for countries to develop and maintain. Growing materials resources competition and scarcity will fundamentally alter country and company resources strategies and competition, and serve as a catalyst to significant materials sciences breakthroughs.
Global Risks 2012 – The Risk Landscape
Source: World Economic Forum
Global Risks 2012 is based on input from 469 experts and industry leaders on the perceived impact and likelihood of 50 prevalent global risks. This seventh edition indicates increased concern with socio-economic risks, whereas environmental risks were the prevalent concern in last year’s report. Global Risks 2012 highlights three “risk cases” that show how some interconnected global risks are already manifesting: Seeds of Dystopia, Unsafe Safeguards and The Dark Side of Connectivity.
The Global Economic Burden of Non-communicable Diseases (PDF)
Source: World Economic Forum and Harvard School of Public Health
Non-communicable diseases have been established as a clear threat not only to human health, but also to development and economic growth. Claiming 63% of all deaths, these diseases are currently the world’s main killer. Eighty percent of these deaths now occur in low- and middle-income countries. Half of those who die of chronic non-communicable diseases are in the prime of their productive years, and thus, the disability imposed and the lives lost are also endangering industry competitiveness across borders.
Recognizing that building a solid economic argument is ever more crucial in times of financial crisis, this report brings to the global debate fundamental evidence which had previously been missing: an account of the overall costs of NCDs, including what specific impact NCDs might have on economic growth. The evidence gathered is compelling. Over the next 20 years, NCDs will cost more than US$ 30 trillion, representing 48% of global GDP in 2010, and pushing millions of people below the poverty line. Mental health conditions alone will account for the loss of an additional US$16.1 trillion over this time span, with dramatic impact on productivity and quality of life.
By contrast, mounting evidence highlights how millions of deaths can be averted and economic losses reduced by billions of dollars if added focus is put on prevention. A recent World Health Organization report underlines that population-based measures for reducing tobacco and harmful alcohol use, as well as unhealthy diet and physical inactivity, are estimated to cost US$ 2 billion per year for all low- and middle-income countries, which in fact translates to less than US$ 0.40 per person.
The rise in the prevalence and significance of NCDs is the result of complex interaction between health, economic growth and development, and it is strongly associated with universal trends such as ageing of the global population, rapid unplanned urbanization and the globalization of unhealthy lifestyles. In addition to the tremendous demands that these diseases place on social welfare and health systems, they also cause decreased productivity in the workplace, prolonged disability and diminished resources within families.
The results are unequivocal: a unified front is needed to turn the tide on NCDs. Governments, but also civil society and the private sector must commit to the highest level of engagement in combatting these diseases and their rising economic burden. Global business leaders are acutely aware of the problems posed by NCDs. A survey of business executives from around the world, conducted by the World Economic Forum since 2009, identified NCDs as one of the leading threats to global economic growth. Therefore, it is also important for the private sector to have a strategic vision on how to fulfill its role as a key agent for change and how to facilitate the adoption of healthier lifestyles not only by consumers, but also by employees. The need to create a global vision and a common understanding of the action required by all sectors and stakeholders in society has reached top priority on the global agenda this year, with the United Nations General Assembly convening a High-Level Meeting on the prevention and control of NCDs.
Global Entrepreneurship and Successful Growth Strategies of Early-Stage Companies (PDF)
Source: World Economic Forum
According to the Global Entrepreneurship and Successful Growth Strategies of Early-Stage Companies report, released by the World Economic Forum in collaboration with Stanford University and Endeavor Global, the top 1% of companies from among 380,000 companies reviewed across 10 countries contribute 44% of total revenue and 40% of total jobs while the top 5% contribute 72% of total revenue and 67% of total jobs.