Future Global Shocks
Improving Risk Governance
Recent global shocks, such as the 2008 financial crisis, have driven policy makers and industry strategists to re-examine how to prepare for and respond to events that can begin locally and propagate around the world with devastating effects on society and the economy. This report considers how the growing interconnectedness in the global economy could create the conditions and vectors for rapid and widespread disruptions. It looks at examples of hazards and threats that emerge from the financial world, cyberspace, biological systems and even the solar system, to reflect on what strategic capacities are called for to improve assessment, mapping, modelling, response and resilience to such large scale risks.
Strategic approaches for managing future global shocks
Measured at the macro level, many if not most countries have been reaping the economic benefits of global economic integration, but there is a tendency to turn a blind eye to new vulnerabilities that result. Complex systems in the modern risk landscape contain various vulnerabilities to shocks that can result in rapid and widespread negative spillovers. Such broad exposure draws attention to the need for strategic preparation and international co-operation to support prevention and surveillance. This chapter considers elements of a strategic blueprint to better manage the known and unknown vulnerabilities that could produce global shocks. The key elements of the strategy include strengthening governance capacities through international institutions and norms, and building societal resilience. Each of these elements involves various components such as enhancing governance through the use of publicprivate partnerships, adapting risk communication to modern society and the use of new technologies, and improving the capacity of insurance solutions to enable rapid recovery.