The latest Global Risks Report from the World Economic Forum sees climate risks pushed down the list by the risk of infectious diseases, and the economic and social consequences of the coronavirus
Shipping should anticipate significant risks in its recovery from the pandemic, including the challenges of digitalisation and uneven technological competence of the workforce. Successful companies will invest in digital skills. IT IS always easier to be wise after the event. In last year’s Global Risk Report from the World Economic Forum, in a section headed ‘False positive: healthcare systems under new pressures’, the risk of infectious diseases was regarded as high impact but unlikely.
On a map of links to other risks, infectious diseases was placed on the margins alongside the threat of an energy price shock or deflation.
There were many more risks to be mitigated in 2020 — the top five of which related to climate change, according to survey respondents’ perceptions. In fact, infectious diseases was only included as a top five risk by impact just once in the past 10 years.
Under the term “chronic disease”, it was selected as a risk every year between 2007 and 2010.
The more the risk outlook became focused on climate change, extreme weather and climate action failure, the less respondents perceived infectious diseases as a serious risk.
In 2020 the climate focus was all-embracing.
It is therefore surprising that the press statement introducing the 2021 report, released today, begins: “For the last 15 years the Global Risks Report has been warning the world about the dangers of pandemics. In 2020, we saw the effects of ignoring preparation and ignoring long-term risks.”
Infectious diseases was one of many risks highlighted. Indeed, the report states: “As populations grow, age and urbanise, non-communicable diseases have replaced infectious diseases as the leading threats to health and health systems worldwide.”
As I say, it is easy to be wise a year into a global pandemic that has claimed the lives of millions and widened long-standing health, economic and digital disparities.
This year’s report places infectious diseases as the top global risk by impact, and fourth in terms of likelihood. And this year, in a refocusing of risks into short (zero to two years), medium (three to five years) and long term (five to 10 years), the two critical short-term risks are infectious diseases and livelihood crises that directly flow from disease.
Livelihood issues include employment crises, digital inequality and youth disillusionment. The acceleration of digital technology brought about by business response to the pandemic must be carefully handled.
Zurich Insurance Group chief risk officer Peter Giger said while the acceleration of digital transformation promises huge benefits, including the creation of a possible 100m new jobs by 2025, “at the same time, digitalisation may displace 85m jobs”.
He said “since 60% of adults still lack basic digital skills, the risk is the deepening of existing inequalities”.
Carolina Klint, risk management leader for continental Europe at insurance broker Marsh, warned that rapid digitalisation “is exponentially increasing cyber exposures [while] supply chain disruption is radically altering business models”.
Meanwhile Lee Hyung-hee, president of the Social Value Committee at South Korea’s SK Group, noted that post-coronavirus resilience will hinge on the continued growth in connectivity worldwide “as we know that economies that digitised early performed relatively better in 2020”.
“If the continued deployment of 5G and AI is to emerge as an engine of growth, we must urgently bridge digital divides and address ethical risks,” he said.
No doubt on a global scale, climate change ranks higher than youth disillusionment. Both are critical, however it has taken a pandemic to shine a light on some of the many inequalities that went unspoken among the world leaders gathering in the past at Davos or, later this month, virtually.
Shipping must understand the implications of digital inequality. As the industry becomes more connected and smarter, digital solutions will drive the push for decarbonisation, and successful businesses will be expected invest in advanced digital skills.
If there is a shortage of hires with the required digital skills, it’s likely that will lead to strong competition for the brightest talent. In short, it would be better to be wise before the event.