2012-01-19

Co.Exist

Predicting Disasters Of The Future: Economic Disaster, Water Shortages, And Cyber Attacks

A new report asking experts what disasters they’re afraid of has enough in it to make you hide under the bed. Bad news for optimists: The experts think global catastrophe is more likely than ever.

Experts around the world agree: Global catastrophes are coming in the next decade. When the experts were polled, they were incredibly pessimistic. We’re at increased risk of economic, political, and environmental disaster. It’s a scary world out there, and it’s just getting scarier.

Erwann Michel-Kerjan, managing director of the University of Pennsylvania’s Wharton Risk Management and Decision Processes Center and one of the primary figures behind the Global Risks 2012 report, told Co.Exist that one of the biggest surprises was how pessimistic global leaders were about likely, high-impact events in the next 10 years. Michel-Kerjan, who has worked on the annual reports in the past, noted that respondents are now noticeably more worried than in prior years. Chronic fiscal imbalances, severe income disparities, water supply crises, and cyberattacks led the pack of consistent fears from respondents—who were chosen from business, government, international organizations, NGOs, and academia.

Respondents said that, on a 5-point scale with 5 meaning almost certain, the likelihood of chronic fiscal imbalances and severe income disparities was 4.3, and cyberattacks clocked in at 3.8. By contrast, the risk of unmanageable inflation or deflation was 2.82 and unprecendented geophysical destruction was 2.85. Phew.

Michel-Kerjan said that one of the greatest areas of concern is the potential for one disaster to cause other, spillover disasters. Michel-Kerjan gave the specific example of the chain reaction of events from the Fukushima earthquake—which caused both the well-known Fukushima Nuclear Plant crisis and a host of lesser-known economic headaches that were caused by disruptions to the global supply chain and to Japanese politics.

Other crises that respondents were polled on include the everyday (terrorism, pervasive entrenched corruption), the buzzworthy (rising religious fanaticism, backlash against globalization), and the oddly science-fictionish, like the unintended consequences of nanotechnology and massive digital misinformation. Interestingly, massive digital misinformation—"deliberately provocative, misleading or incomplete information [that] disseminates rapidly and extensively with dangerous consequences"—ranked an impressive likelihood of 3.19. Don’t believe everything you read, indeed.

The report was prepared by the World Economic Forum in collaboration with risk consultants Marsh & McLennan, insurance giant Swiss Re, the Wharton Center for Risk Management, and Zurich Financial. Michel-Kerjan notes that one of his biggest worries is that the risk consulting field is not proactive enough in terms of preventing risks from occurring.

However, the litmus test of any future-predicting report is how accurate it’s been in the past. The Global Risks 2011 report worried about "a populist backlash against globalization" (see: Occupy Wall Street), cybercrime, and that "current global governance systems lack capacity to deal with global risks." Meanwhile, the Global Risks 2010 report failed to predict the Arab Spring—one of the most important geopolitical developments in decades. Like many other things, predicting the future is a mixed bag.

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3 Comments

  • Fred

    I've predicted disasters very specifically. I've been so accurate, it's absolutely uncanny. The trouble is, I have no control over it. When I do "predict" something, the words just seem to come out of my mouth as if someone else had control of my speaking. It sounds bogus, but it's happened, and I can't figure it out to save my life. In the Dark Ages, they probably would have burned me as a witch!

  • Auralseductress

     What did you predict that has not occurred yet? I might agree with you;-)