Future Global Shocks

IMPROVING RISK GOVERNANCE

Bron: Alex Wittenberg, Partner, Oliver Wyman Global Risk Center

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 such events in the future, whether they arise in financial, natural, public health or even political systems. This OECD report is part of the organisation’s pioneering work on the policy implications of emerging and systemic risks and supports the development of foresight capacity in its Member countries. The report’s findings draw primarily from analysis contained in five case studies on different types of events: financial crises, cyber risks, pandemics, geomagnetic storms and social unrest – some of which have proven capacity to produce global shocks. All five background papers are available separately on the OECD website: www.oecd. org/futures.

Global leaders are acutely aware that anothersystemic shock could severely challenge economic recovery, social cohesion and even political stability. Visible indicators of vulnerability persist in the forms of economic imbalances, volatile commodity prices and currencies, colossal public debts and severe budget deficits. Less visible than these metrics are the drivers of vulnerability that tightly weave interconnections between commercial supply chains, technological systems and investment vehicles underlying the global economy. Unanticipated events such as natural disasters, failures in key technical systems or malicious attacks could disrupt these complex systems and produce shocks that propagate around the world.

There is a palpable sense of urgency to identify and assess risks arising from vulnerabilities in these crucial systems, and to develop policies that will bolster efforts for prevention, early warning and response to ensure sustained economic prosperity. This urgency explains the demand for OECD to deliver strategic advice on preparing for and responding to potential global shocks mired in uncertainties.

Since the beginning of this project in 2009, the world has witnessed the effects of a global financial meltdown, the first declared pandemic in over 40 years, political upheaval in the MENA region, the BP oil spill, closure of European air space due to a volcanic ash cloud, and most recently the Tohuku earthquakes, tsunami and ensuing nuclear reactor accidents at the Fukushima power plant. Never before have global risks seemed so complex, the stakes so high, and the need for international co-operation to deal with them so apparent.

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