The World Economic Forum’s Global Risks 2014 report, developed in collaboration with Marsh & McLennan Companies (Mercer’s parent organization) and other partners, is based on an annual survey of more than 700 experts from industry, government, academia, and civil society in more than 100 countries, who were asked to review and rate a landscape of 31 global risks. The report highlights respondents’ greatest concerns and explores the interconnectivity of global risks and their systemic impact.

The global risks landscape

The Global Risks 2014 report examined risks in five categories: economic, environmental, geopolitical, societal, and technological. Among the findings:

• Economic, societal, and environmental risks dominate the list of global risks that the respondents are most concerned about. Fiscal crises emerged as the top concern as well as the risk expected to have the greatest impact if it were to manifest.
• Structural unemployment/underemployment appears as a top-five risk in terms of both likelihood and impact as many people in both advanced and emerging economies struggle to find jobs. Youth and minorities are especially vulnerable — youth unemployment rates hover around 50% worldwide and underemployment (with low-quality jobs) remains prevalent, especially in emerging and developing markets.
• Among the additional global risks not explicitly surveyed but that respondents identified were rapid population growth and the increasing burden of an aging population — demographic trends that could be a source of great opportunities for society and business if managed effectively.

A generation at risk

The Global Risks 2014 report shows that young people between the ages of 13 and 23 who are just entering the job market today are at high risk of unemployment, which has risen among this group since the financial crisis. The situation is especially dire in the Middle East and in some European countries, such as Spain and Greece.

Haig Nalbantian, senior partner and co-leader of Mercer’s Workforce Sciences Institute, commented on the talent implications of the new report. “While globalization has produced enormous economic and social advances in recent years, the very pace of change brings with it considerable risks that, as in 2007 to 2008, could set everything back,” he says. “Most of all, labor market institutions have not kept pace with the demands placed on them to allocate labor on a global scale, resulting in persistently high unemployment and, in many places, rising income inequality.

“If such global risks are not addressed more effectively, their social, economic, and political fallout could be far-reaching and could slow economic progress. Business organizations should take these risks head on; their leaders should be bolder in driving productive collaboration with governments, educational institutions, NGOs, and other international organizations to build the new labor market and related institutions required to make globalization work for all,” Mr. Nalbatian continued.

Download the full Global Risks 2014 report

Contacts

Haig Nalbantian (New York)
Senior Partner, Co-leader of Mercer’s Workforce Sciences Institute
+1 212 345 5317
haig.nalbantian@mercer.com