Future Shocks

We cannot afford to be complacent for these risks can crystallise with disorientating speed and upend our world

By Author  |  Published: 18th Feb 2018  12:05 amUpdated: 17th Feb 2018  9:31 pm

This is a transformational time for the world. While encouraging signs suggest that people now have the highest standards of living in human history, acceleration and interconnectedness in every field are pushing the absorptive capacities of institutions, communities and individuals to their limits, putting future human development at risk.

In addition to dealing with a multitude of discrete local problems, humanity faces a growing number of systemic challenges, including fractures and failures affecting the environmental, economic, technological and institutional systems on which our future rests. In fact, “this is perhaps the first generation to take the world to the brink of a systems breakdown,” points out the Global Risks Report 2018 of the World Economic Forum.

The report highlights the importance of being prepared not just for familiar slow-burn risks, but for ‘Future Shocks’, ie, sudden and dramatic disruptions that can cause rapid and irreversible deterioration in our systems. It identifies the following ten potential breakdowns that could fundamentally destabilise the world.

1. Grim Reaping

In a world of growing environmental strains, our increasingly complex food system is becoming vulnerable to sudden supply shocks. Disruptors such as extreme weather, political instability or crop diseases could result in a blow to output in key food-producing regions, triggering global shortages and price spikes. This risk could be elevated by reduced crop diversity, competition for water and geopolitical tensions.

Widespread fear could lead to devastating spillover effects. Social fractures would intensify leading to political and economic crises. So too would a surge in smuggling, both of food and people. Among the changes that could help are increasing crop diversity, establishing stress tests of ‘choke points’, reducing waste along supply chains and establishing early warning indicators.

2. Tangled Web

What if the adverse impact of artificial intelligence (AI) involves not a super-intelligence that takes control from humans but ‘AI weeds’ – low-level algorithms that slowly choke off the internet? A trend towards reduced internet efficiency would undermine service delivery and hobble the Internet of Things, frustrating users. This could prompt some governments to wall off parts of the internet. If malicious actors found ways to proliferate or weaponise the AI weeds, they could do extensive damage.

As the global demands placed on the internet increase in scale and sophistication, digital hygiene is likely to become a more pressing concern for end-users. The development of overarching norms, regulations and governance structures for AI will be crucial: without a robust and enforceable regulatory framework, there is a risk that humans will in effect be crowded out from the internet.

3. Death of Trade

Against a backdrop of deepening protectionist sentiment, trade disputes could spread rapidly by triggering adverse impacts and retaliatory moves. A breakdown of the global trade system would roil supply chains and reduce economic activity. Adverse impacts such as lower output and employment would be unevenly distributed within and between countries, creating new inequalities.

If this in turn fuelled more aggressive mercantilism, the risk would increase of proliferating trade-related disputes triggering deeper geopolitical tensions. Though a period of de-globalisation may be seen by many as a welcome corrective, rejecting current frameworks in favour of binary nationalistic approaches would cause significant disruption. An increased domestic policy focus on cushioning impact on individuals and affected regions as well as consensus-building would help.

4. Democracy Buckles

Social and political orders can break down if polarised positions harden into a winner-takes-all contest, risking secession or physical confrontation. A spiral of violence could begin, particularly if public authorities lose control and intervene on one side with disproportionate force.

In some countries — with widespread ready access to weapons or a history of political violence — armed civil conflict could erupt. In others, the state might impose its will by force, risking long-reverberating consequences: a state of emergency, the curtailment of civil liberties, even the cancellation of elections to protect public order. The more that can be done to boost the resilience and responsiveness of democratic institutions, the less likely they will buckle under pressure.

5. Precision Extinction

A third of all fish consumed in the world are already caught illegally. AI and drone technologies are increasingly commonplace. Add to these facts the automation of illegal fishing, and the impact on fish stocks could be devastating, particularly in international waters where oversight is weaker. Countless other areas exist where the same logic might unfold: huge short-term incentives might lead to the use of emerging technologies in ways that trigger irreversible long-term damage.

A rapid collapse of fish stocks could engender cascading failures across marine ecosystems. The key to progress in these areas of hybrid technological disruption will be new global governance norms and institutions, particularly those designed to protect the global commons and prevent the destructive deployment of emerging technologies.

6. Into the Abyss

Against a backdrop of domestic and international political strife, a systemic collapse of the sort that was averted in 2007-08 could push countries, regions or even the whole world over the edge and into a period of chaos. If financial systems go down, contemporary economies and societies cannot function.

Policy-makers would pull every available lever to restore stability. But what if the prospect of another financial sector bailout further enflames societies rather than calming them? More can be done to enhance the resilience of the financial system. Stress-testing methodologies could be strengthened by assigning greater weight to tail events and unexpected consequences.

7. Inequality Ingested

Drugs for human enhancement are in their early stages, but scientific advances may well be exponential. In a world of entrenched inequality, many people might choose to disregard potential health risks in order to maintain or elevate their status. Ingestion would be impossible to monitor, and even if bans are put in place, black market channels would inevitably emerge. If the price tag is significant and the benefits are strong, the result would be ever-deeper and more entrenched inequality.

This could trigger social instability and conflict between the haves and have-nots. Divergent regulatory responses could lead to productivity disparities across countries and the emergence of ‘enhancement tourism’ flows. Early and appropriate regulation of enhancement technologies may be more successful than an outright ban.

8. War without Rules

Offensive cyber capabilities are developing more rapidly than our ability to deal with hostile incidents. Imagine that a country’s critical infrastructure systems are compromised by a cyberattack, leading to disruption of essential services and loss of life – the pressure to retaliate would build rapidly, potentially setting off an escalatory chain reaction. The retaliation might be misdirected, drawing new actors into a widening conflict. This would add to the potential for further confusion and escalation, including the resort to conventional military force.

In conventional warfare, agreed norms and protocols provide predictability and slow the emergence of crises. If governments accelerated current efforts to establish similar ground rules for cyberwarfare, it would help prevent conflict erupting by mistake.

9. Identity Geopolitics

The twin forces of national identity and self-determination are growing in disruptive capacity. Examples include states expelling ethnic or religious minorities, national minorities attempting to secede and nation-states extricating themselves from international constraints on their sovereignty. A deepening of disputes over cultural and political borders would trigger widening clashes, potentially causing regional domino effects as states and sub-state actors mobilize in defence of or opposition to the status quo.

Stronger promotion and protection of equal cultural and political rights within states would help defuse tensions about national identity. So would the fostering of stronger economic and other links between states sharing contested borders.

10. Walled Off

A proliferation of damaging cross-border cyberattacks might be the most likely trigger for a government-led breakup of the internet into national or regional ‘walled gardens’, but there are many other potential drivers that could lead governments in this direction: economic protectionism, regulatory divergence, censorship and repression, the fraying of national political discourse and the loss of government power relative to global online companies.

Ongoing dialogue between governments and technology companies would help ensure that internet-based technologies develop in a politically sustainable context of shared values and agreed responsibilities.

Big Worries

• Environmental risks have continued to grow in 2017, with all five risks in the environmental category being ranked higher than average for both likelihood and impact over a 10-year horizon

• 90% of the world’s population now lives with polluted air. In November 2017, a public health emergency was declared in Delhi, when air pollution reached more than 11 times the WHO guideline levels

• Lancet Commission on Pollution and Health estimates the overall annual cost of pollution to the global economy at $4.6 trillion, equivalent to around 6.2% of output

• Global gender parity gap across health, education, politics and the workplace widened for the first time since 2006, with a succession of high-profile cases highlighting continuing endemic levels of sexual harassment, both at the workplace and in society

• Cyber breaches recorded by businesses have almost doubled in five years, from 68 per business in 2012 to 130 per business in 2017

• Cybercriminals have an exponentially increasing number of potential targets, because the use of cloud services continues to accelerate and the Internet of Things is expected to expand from an estimated 8.4 billion devices in 2017 to a projected 20.4 billion in 2020

• A 2017 study of 254 companies across seven countries put the annual cost of responding to cyberattacks at £11.7 million per company, a year-on-year increase of 27.4%. The cost of cybercrime to businesses over the next five years is expected to be $8 trillion

• IMF has highlighted the potential risks posed by the build-up of non-financial sector debt in the G20. In 2016, this debt totalled $135 trillion, up from $80 trillion in 2007