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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)
• the identification of regional risk trends
• the risks that have changed the most since the last Global Risk Report
• The Paris Agreement as a risk response to the failure of climate-change mitigation and adaptation
• The risk responses to  Large-Scale Involuntary Immigration
• Economic risks
• Creating a culture of risk resilience

In looking over the first part of the Global Risk Report 2016, I wanted to make sure there were any areas that I hadn’t covered, and I did uncover one such area.   You see, I had covered geopolitical and social risks related to Large-Scale Involuntary Immigration and the risk responses to them which involved supporting immigration programs that help refugees assimilate into their new host countries.   I had covered environmental risks with the focus on the Paris Agreement as a way to mitigate against climate change.   Also, I had discussed the economic risks inherent in the slowdown of the global economy, and China’s economy in particular.

However, I had not yet addressed technological risks, which I will do in this post.

What are the major technological risks that the world faces at the present moment?

1. Cyber-related risks—cyberattacks are among the most likely and most potentially impactful risks for the next two to three years, and they are highest risk of concern for the region of North America.   Companies need to make an appropriate level of investment to enhance risk management against such cyberattacks, particularly in the two areas of mobile internet and machine-to-machine connections.
2. Exchange of data between countries and stakeholders—given the inherently international nature of data transfer between multinational companies, a corresponding international legal framework must be established to ensure privacy, transparency, encryption control, and intellectual property regimes.
3. Changes to the work environment—by 2022, 40% of US workers will have a probability of their jobs being automated.   To replace manual labor jobs that are most likely the first to be so automated, skills in STEM (science, technology, engineering and mathematics) are expected to increase in importance in the medium term, and skills in problem-solving, creativity, and social intelligence are expected to increase in importance in the long term.    Why?  Because jobs involving these skills will be difficult to automate, and thus will not become obsolete.
4. Widening wealth, income and social inequalities—4 out of the 7 billion people on this planet do not have access to the Internet, and will thus not benefit from technological innovation.    Because of the trend mentioned in paragraph 3, there will be diminishing returns to labor and this could exacerbate current trends towards wealth disparity.    This lowers aggregate demand and will depress the global economy for decades to come, and if continued, will contribute to the greater risks associated with social instability.

Any effort that can be made to bridge the technological gap will have to be accomplished, at least in part, through educational institutions, although public-private partnerships between business and government can also contribute to this effort.   Society will support technological innovation to the extent that the innovation is seen as a benefit to all the society’s members, and not just the elite few.

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