Home > Free Essays > Economics > Political Economy Processes > The World Economic Forum – Risk Outlook 2013
Cite this

The World Economic Forum – Risk Outlook 2013 Analytical Essay


Introduction

More than ever, the world is susceptible to various risks that may hinder excellence of the global populations.

With regard to the World Economic Forum report, eighth edition version for 2013, “the world is more at risk as the evident persistent economic weakness saps our ability to tackle environmental challenges” (World Economic Forum 2013 a, Para. 1).

This conclusion was based on assessment results involving 1000 professionals across many organisations, university circles, and the administration who conducted market research on 50 most significant worldwide issues that are likely to manifest themselves in a decade to come.

Through the X-factor chapter, the report suggests that some risks have unknown consequences.

This issue raises the question of the capacity of the fast-moving global organisations that are often confronted with myriads of risks to develop resilience to risks if at all they have to remain relevant in the period as forecasted by the report- 10 years.

For instance, in case of the tourism, industry risks such as water crisis due to global warming are likely to affect the flora and fauna of the world, which form rich heritages for tourism destination sites across the globe.

This paper conducts an analysis of the World Economic Forum report with particular concerns on the tourism sector.

Although the report presents findings of a survey based on polls conducted by technocrats as opposed to persons on the streets, the argument made is that the predictions made in the report are likely to impact the global populations in the future at valid thresholds.

The argument is founded on the consideration of the research findings on the likely impacts of some conditions that have already been experienced across the globe such as global a warming, which has led to issues that influence the global populations negatively such as water crisis and foods crisis.

Report Analysis

The World Economic Forum report presents 50 worldwide risks with respect to effects, probabilities, and interconnections from the basis of a survey of 1000 experts in valid fields.

All the 50 risks were categorised into five groups namely “economic, environmental, geopolitical, societal, and technological” (World Economic Forum 2013 b, p.14). The top-most two risks that global organisation and government are likely to experience are harsh capital discrepancies and indefensible government arrears.

Form the paradigms of the latest natural disasters such as hurricane Sandry and the China’s experience with the worst flooding, the report argues that, greenhouse gas emissions form the third major global risk such that organisations have to put in place mechanisms of developing risk resilience.

From the paradigm of the tourism industry, the positioning of global warming in the third position of the noble risks that are likely to affect the world’s economies negatively is significant.

Apart from dependence of tourism on climatic changes, sustainability of the world economies, which the report argues as presenting a major risk in the coming next ten years is also dependent on tourism.

Perry (2007) supports this line of argument by maintaining, “changes on global climate are beyond the control of the tourism industry, and may have far reaching consequences for many current tourists destinations as well as for places contemplating involvement in tourism” (p.34).

Research shows that a close relationship exists between the choice of tourism destination and nature of climate (Cegnar 2009, p.2). For instance, it is impossible for nations that are frequently influenced by sudden weather and climatic changes to attract a large number of tourists in their tourisms destinations.

The World Economic Forum report emphasises that climatic changes associated with global warming due to risks posed by greenhouse gas emissions would impact the environment and a hence the economy.

Existing scholarly research proves that global warming also influences human health negatively (McMichael, Haines, Sloof, & Kovata 2006).

World Economic Forum report also sends a message that, in overall, the greenhouse gas emissions that cause the problems of global warming would collectively affect all nations on the global scale. For the tourism sector, this issue may perhaps not be the case.

The above assertion is perhaps inaccurate by considering the argument that “projected climate change resulting from greenhouse gas global warming is likely to provide new opportunities for the tourism industry in some areas” (Cegnar 2009, p.4).

While it is agreeable that natural catastrophes such as hurricanes result in submersion of some tourism recreational facilities in some parts of the world, such submersion results in an increase in the demand of in some other recreational facilities elsewhere across the globe.

This argument suggests that, although a single nation may suffer from climatic changes associated with greenhouse emissions, on a global scale, the demand and supply curves for tourism are likely to remain unaltered. For examples, the U.S. is a high beneficiary for tourism from the perspective of global warming.

Morin supports this assertion by reckoning, “the United States is predicted to be one of the tourism winners, with international tourism to the U.S. increasing an estimated 13.7 percent over what it would have been if the atmosphere wasn’t warming up” (2006, Para. 10).

However, the implication of global warming risks on the natural flora and fauna that form the basis for tourist attraction remains significant.

It is important to note that using the conclusion of the findings of the World Economic Forum report to make this conclusion suffers challenges of reliability and validity of the conclusions made. In fact, the survey is not based on data collected on the ground.

Rather, it is based on the perception of the technocrats who were convened in the conference held in London.

Major organisations and even the governmental departments are exposed to risks of cyber attacks (Kshetri 2005). Cognition of this argument makes the digital wild fire one of the major risks that organisations across the globe anticipate facing within a period of ten years as discussed by World Economic Forum.

With regard to World Economic Forum (2013 b), hurricane Sandry struck New York, with false rumours quickly spreading across the social media that the floors of the New York stock exchange had been brought down (p.25).

The World Economic Forum report appreciate that the rumour was immediately corrected by some twitters before traditional forms of media such as CNN confirmed that indeed it was as rumour.

However, it is evident that new forms of media pose major threats in the future due to factors such as inaccurateness and misinterpretation of information especially in situations of emergency.

This argument means that, although technology has caused societies to revolution, it introduces some risks, which require new ways of handling them.

The emergence of new forms of media following the rapid evolution of communication technology implies that nations have to look for mechanisms of ensuring that information is censored before it can cause havoc within a nation.

However, since the “social media allows information to spread around the world at breakneck speed in an open system where norms and rules are starting to emerge but have not been defined” (p.27) according to World Economic Forum (2013 b), organisations are likely to continue encountering risks that are associated with inaccurateness of information spreading through the social media.

In the context of the unregulated growth of the amount of information that is exchanged across social media networks, it is arguable that, in situations where political ideologies in favour of certain candidates are desired to be spread in the fastest pace, social media is perhaps one of the most preferred means.

Although nations are aiming to become more democratic by permitting free flow of information and respect for freedom of speech and expression, if such freedom is not regulated, the democratic achievements realised by nations so far are likely to suffer risks of deterioration where irresponsible statements are shared across the social media (Rother 2012).

Based on the World Economic Forum, arguably, perceptions of the risks posed by technological advents of social media were inappropriate since they were based on only 1000 participants, yet conclusions are made for global synthesis.

However, as World Economic Forum (2013 reckons, “in virtual equivalent, damage can be done by a rapid spread of misinformation even when corrections follow quickly” (p.6).

While it is important to celebrate the achievements of human development through enhancing efficiency in communication processes, questions remain unanswered about the significance of the social media in ensuring free flow of accurate information across the world.

The significance of such a query rests on the theoretical argument that accurate and precise information is necessary for making good decisions (Detwarasiti 2005).

Indeed, it is questionable whether people who generate and those who consume social media information are willing to develop ethos and codes of conduct that are guided by principles of responsibility and accountability to likely harms caused by inaccurate and false reporting.

In this context, the author agrees with the World Health Organisation (2012) report that uncensored social media is a major risk that organisations are facing and will continue to face within the next 10 years. Many forms of communication continue to emerge.

This revelation means that it is immensely difficult to analyse precisely how social media will shape the society within a time span of the next ten years in the effort to determine mechanisms of mitigating the risks that might be accompanied by the evolution of new forms of communication in the near future.

The prevalence of diabetes is arguably on the rise globally as evidenced by the graphs below showing the prevalence of diabetes in the US from 1980 to 2005 on age basis across all races (figure 1).

It is also evident that the prevalence of diabetes is also related to race as shown in the graph of prevalence of diabetes based on race or ethnicity in 2002 (figure 2).

Diabetes prevalence per age group

Figure 1 Diabetes prevalence per age group (Source: Data 360 2010)

Age adjusted total prevalence of diabetes in people aged 20 years or older, by race: ethnicity-united states, 2002

Figure 2 Age adjusted total prevalence of diabetes in people aged 20 years or older, by race/ ethnicity-united states, 2002 (Source: National Health Interview Survey 2005)

A possible counter argument against health risks that the world is susceptible is “globally, we are getting better at monitoring signs of health-related crisis and alerting each other “(World Economic Forum 2013b, p.28).

This argument implies that the world today experiences fewer deaths that are associated with pandemics than in the past centuries.

While this argument remains true, the trend of biological mutation rendering the technologically developed mechanisms of countering the ailments, which have terrorised the world populations in the past centuries ineffective, is worrying.

Indeed, with regard to the World Economic Forum (2013b), people live “in the bacterial world where they will never be able to stay ahead of the mutation curve” (p.29).

Consequently, the author agrees with the report that the major risk that may make the future global populations less healthy and more prone to fatal bacterial infections is the degree to which global palpation’s medicinal technology will be behind the bacterial mutation curve.

Global Economic forum (2013) also considers economic risks as one of the major global risks. The threshold and the extent to which these risks will influence the future are dependent on the global risk resilience measure adopted by different nations.

However, this strategy is subject to the capacity of organisations to minimise the cases of fraud and other economic risks in organisations. Frauds cause distortions of the economy, often truncating into economic crunches (Jeng & Metrick et al. 2003).

Literature of economic performance of global organisations across all industries including the tourism industry contends that embezzlement of funds presents major challenges to the success of organisations (Levi, Burrows, Flemming & Hopkins 2007).

In fact, in the U.S, major organisations fell due to fraud, something that was also a contributing factor to the severity of the 2008-20009 economic recessions in Europe and the U.S.

Consistent with World Economic Forum (2013 b) report , considering the situations in which governments of different nations have to respond by giving aid due to human-caused issues, risks continue to exert a lot of pressure to global economic resources.

For instance, technological explorations such as installations of nuclear plants truncate into risks that exert pressure on the economic resources of nations. A good case example is Fukushima in Japan in which the leakage of a nuclear power plant posed incredible risks to the economic resources of Japan.

In this perspective, World Economic Forum (2013) observation, “continued stress on the global economic systems is positioned to absorb the attention of leaders for the foreseeable future” (p.11) becomes significant.

In fact, the overall systems of the world are exposed to immense pressures while not being aware of the likely risks that would arise as a result. Perhaps one of the economic resilience measures put in place by a vast majority of the nations is to test whether gigantic policies can help to change the curve of economic risks.

Unfortunately, this outcome is not adequate since risks of potential financial crisis interplay with the increasing incidences of natural catastrophes. What is required is a multi-dimensional approach to respond to both environmental and economic risks that are likely to influence the global organisation with the next 10 years.

Although some of the geopolitical risks discussed in the World Economic Forum (2013|) are subject to scholarly introspection on their chances of their occurrence, it is arguable that the issues discussed by the report, which was compiled in 2012, have started to evidence themselves in 2013.

World Future Society (2013) supports this assertion by confirming, “whether staring over the fiscal cliff, battling the euro zone crisis, trying to profit from a rising China, or taking cover from the Middle East; around the world, politics has come to dominate market outcomes” (Para.4).

From this perspective, it sounds imperative to argue that, in the current world, Geo-economy is interrelated with issues of geopolitics on matters such as war and peace coupled with prosperity of nations. Indeed, statecraft encompasses one of the major drivers of the global foreign economic policies.

State interests in economic foreign policies are becoming an issue that every nation does not take for granted the effort to ensure that nations remain risk resilient.

This argument implies that politics is driving every facet of the global societies. The risk in this case is that state entrepreneurship would constitute major confrontations to the operations of the free bazaars.

The above assertion is perhaps true by considering that, over the last four years, there has been a tremendous spread of perception of political risks across the globe (World Future Society 2013).

Following the financial crisis, evaluation of what took place in Washington or what never took place constitutes an enormous impact on the manner in which global markets shape up.

This case is evidenced by the reactions adopted by the European and other political institutions in response to the crisis- the euro zone crisis.

Political stability of nations encompasses major risks that many nations would anticipate facing head on in coming years. Incidences of foreign attacks create tensions thus threatening the survival of many industries within a nation including the tourism industry.

For instance, with regard World Future Society, “Israel faces the erosion of moderation and increasing tension between Shia and Sunni extremists who compete for influence” (2013, Para. 10).

While this issue constitutes internal geopolitical risks that face Israel, there are also external geopolitical risks such as the long-term war between Israeli and Palestine.

On the other hand, North Korea is also under intense pressure to stop pursuing its nuclear power programs from nations such as the US, Israel, and other NATO counties. Should confrontations between these nations and Korea emerge, politically instigated risks are unavoidable.

Conclusion

World Economic Forum conducted a survey in 2012 to determine the impacts and likelihoods of various risks categories to occur within 10 years to come.

The author agreed with this assessment and further reiterated in the paper that issues such as global warming have attracted the concerns of many scholars about their capacity to cause devastating sufferings to global societies should any risk resilience and resolution strategies are not adopted urgently.

From the World Economic Forum report, the economic risks scored second.

The paper argued that the financial crisis remains the major risk that people anticipate to solve especially in the context of geopolitical risks in which states have endeavoured to put in foreign monetary policies to influence free market dynamics in a manner that would ensure nations are risk-resilient.

It was also noted that global societies are also susceptible to risks that are associated to the emerging preferences of chronic diseases coupled with the emergence of new forms of bacteria having undergone mutations to develop resistance to the current antibiotics.

In this respect, the position of the paper is that, within the next 10 years, the world anticipates encountering risks from social, political, and economic fronts.

Bibliography

Cegnar, T., ‘Effects of Global Warming on Tourism, Climatic Change’, Human Systems and Policy, vol. 1, no. 2, 2009, pp. 1-6.

Data 360, Prevalence of Diabetes, 2010. Web.

Detwarasiti, A., ‘Team Decision Analysis and Influence’, Journal of Communication Technology, vol. 7, no. 3, 2005, pp. 234-245.

Jeng, A. et. al., ‘Estimating the Returns to Insider Trading: A Performance Evaluation Perspective’, The Review of Economics and Statistics, vol. 85, no. 2, 2003, pp. 453-471.

Kshetri, N., ‘Pattern of global cyber war and crime: a conceptual framework’, Journal of International Management, vol. 11, no.4, 2005, pp. 1-38.

Levi, M., J. Burrows, M. Flemming, & M. Hopkins, ‘Nature, extent and economic impact of fraud in the UK’, Journal of Financial Intermediation, vol. 15, no. 4, 2007, pp. 215 – 234.

McMichael, J., A. Haines, R. Sloof, & S. Kovata, Heat, Cold and Air pollution, Climatic Change and Human Health: An assessment prepared by a task group on behalf of the WHO, WMO and UNEP, WHO, Geneva, 2006.

Morin, R., , 2006. Web.

National Health Interview Survey, National Diabetes Statistics, 2005. Web.

Perry, A., Recreation and Tourism: Applied Climatology, Routledge, London, 2007.

Rother, K., ‘What should be included in social media and networking?’, Journal of Human Resource Management, vol. 1, no.1, 2012, pp. 67-71.

World Economic Forum, Global Risks, 2013. Web.

World Economic Forum, 2013, 2013. Web.

World Future Society, The Top Geopolitical Risks of 2013. Web.

World Health Organisation, Chronic Diseases, World Health Organisation, Geneva, 2012.

This analytical essay on The World Economic Forum – Risk Outlook 2013 was written and submitted by your fellow student. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly.
Removal Request
If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda.
Request the removal

Need a custom Analytical Essay sample written from scratch by
professional specifically for you?

Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar

301 certified writers online

GET WRITING HELP
Cite This paper

Select a referencing style:

Reference

IvyPanda. (2019, December 28). The World Economic Forum – Risk Outlook 2013. Retrieved from https://ivypanda.com/essays/the-world-economic-forum-risk-outlook-2013/

Work Cited

"The World Economic Forum – Risk Outlook 2013." IvyPanda, 28 Dec. 2019, ivypanda.com/essays/the-world-economic-forum-risk-outlook-2013/.

1. IvyPanda. "The World Economic Forum – Risk Outlook 2013." December 28, 2019. https://ivypanda.com/essays/the-world-economic-forum-risk-outlook-2013/.


Bibliography


IvyPanda. "The World Economic Forum – Risk Outlook 2013." December 28, 2019. https://ivypanda.com/essays/the-world-economic-forum-risk-outlook-2013/.

References

IvyPanda. 2019. "The World Economic Forum – Risk Outlook 2013." December 28, 2019. https://ivypanda.com/essays/the-world-economic-forum-risk-outlook-2013/.

References

IvyPanda. (2019) 'The World Economic Forum – Risk Outlook 2013'. 28 December.

More related papers