1. INTRODUCTION
In my previous posts on the World Economic Forum’s Global Risk Report 2016, I have concentrated on
- the methodology of the report (corresponding to the Plan Risk Management process of Project Management),
- the identification of risks (corresponding to the Identify Risks process of Project Management)
- the qualitative analysis of risks (corresponding to the Perform Qualitative Risk Analysis process of Project Management)j
After discussing the highest probability risks, those of highest potential impact, and those with the highest risk rating (combined score based on probability times impact) on a GLOBAL scale, the next topic I went to get to in the report is something which seems new for the Risk Report 2016, namely, going to a more granular analysis of the top three most likely risks on a REGIONAL basis.
2. 3 HIGHEST PROBABILITY RISKS FOR EACH REGION
The respondents were asked to assess each of the 29 risks (these risks are listed on the post dated 3/29/2016) based on the probability of occurrence on a scale from 1 to 7, with a “1” meaning that the risk is not likely to happen, and a “7” meaning that the risk is very like to occur.
Those 3 risks that rated as having the highest probability of occurrence for each particular region were as follows:
| Region | Risk #1 | Risk #2 | Risk #3 |
| North
America |
Cyber attacks (Tech) | Extreme weather events (Environmental) | Data theft or fraud (Tech) |
| Latin America | Failure of national governance (Geopolitical) | Unemployment or underemployment (Econ) | Fiscal crisis (Econ) |
| Europe | Large-scale involuntary migration (Soc) | Unemployment or underemployment (Econ) | Profound social instability (Societal) |
| Middle East and North Africa | Water crises (Soc) | Unemployment or underemployment (Econ) | Profound social instability (Societal)
Failure of national governance (Geopolitical) |
| Sub-Saharan Africa | Failure of national governance (Geopolitical) | Unemployment or underemployment (Econ) | Failure of critical infrastructure (Econ) |
| Central Asia (including Russia) | Energy price shock (Econ) | Interstate conflict (Geopolitical) | Failure of national governance (Geopolitical) |
| South Asia | Water crises (societal) | Unemployment or underemployment (Econ) | Extreme weather events (Environmental) |
| East Asia and the Pacific | Natural catastrophes (Environmental) | Extreme weather events (Environmental) | Failure of national governance (Geopolitical) |
Here are some things to notice about these risks.
The top risk is different based on the region: North America faces technological risk, East Asia faces environmental risk, both Latin America and Sub-Saharan Africa face geopolitical risk, Europe as well as the Middle East and South Asia face societal risks, whereas Central Asia is facing economic risk.
However, the second highest risk is economic in nature for most of the regions of the world, except in North America and East Asia which face environmental risks, and Central Asia which races economic risk.
The third highest risk for most regions of the world is either societal or geopolitical in nature.
The next post covers the ecology of risks in time, meaning those risks which have changed the most in terms of impact and/or likelihood in the past few Global Risk Reports.
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