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The World Economic Forum published the Global Risk Report 2016 earlier this year, and I have been spending the last few weeks reviewing the various portions of the report, including the first section which focuses on global risks, and the second section which discusses various scenarios in which the international security situation may take shape over the next 15 years.   In the third section, the Global Risk Report focuses in on three particular global risks and discusses them in detail:

• Section 3.1:   The Disempowered Citizen
• Section 3.2:   Climate Change and the Risks to Food Security
• Section 3.3:   Global Disease Outbreaks

In this post, I will discuss the first risk in focus, the Disempowered Citizen.

The Disempowered Citizen

Social instability has become a risk of increasingly prominent concern in the past few years.   It is one of the top three risks in two global regions, Latin America & the Caribbean and the Middle East and North Africa.   In the past two decades, there has been a rise in the number and intensity of protests around the globe, the most recent wave being associated with the Arab Spring in 2011.

What trends feed the growing social instability?   Among these are the following:

• Fast-paced technological progress which causes job loss
• Globalization which outsources jobs abroad
• Wealth and income concentration, which stagnates middle class wages
• Lack of job opportunities under the economic pressure caused by policies which promote austerity
• Changing climate, which feeds into water and food crises

These trends causes attitudes that demand reform, and as institutions are unable to comply with those demands, trust in institutions, both businesses and governments, is plummeting.

This lack of trust takes the following forms:

• Undermined legitimacy of government mandates
• Increased social polarization, as politicians take advantage of the economic pressure people are feeling and try to refocus anger away from them and toward other groups in society which are competing for resources
• Political impasse and the inability to enact reforms
• Possible disintegration of the country’s governmental system

The businesses in such a society face adverse consequences, as there is an economic slowdown and an environment that is not conducive to doing business.   When people feel disempowered as citizens, they try to recapture that sense of empowerment as consumers, and often create movements like boycotts to affect social change which they feel the government is not capable of implementing.

In the next post, the Global Risk Report discusses some suggestions to mitigate this risk.

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