The latest Global Risks report from the World Economic Forum warns that its highlighted “societal risks all have a relatively high likelihood of occurring in the next 10 years”.
As the chart above shows, the top 3 risks are those also highlighted in ‘Boom, Gloom and the New Normal’:
• Water supply crises are the most likely event
• Food shortages feature 2nd in the list
• Mismanagement of population ageing is the 3rd key risk
The first 2 risks are closely interlinked. 60% of all fresh water is currently used for farming, according to the US Geological Survey. So a shortage of water will quickly lead to food shortages.
Similarly, the WEF warns that global ageing impacts old and young:
• Older workers fear the end of state pensions, pre-established retirement age and guaranteed access to quality healthcare.
• Younger workers fear they will have to pay for these benefits, whilst suffering from government austerity programmes
Solutions do exist, of course, as we highlight in chapter 8.
In India, for example, 40% of all food rots on its way to the consumer. Similarly, in Western Europe 40% of all fresh water supplies are lost to leakage. Both problems are clearly solvable, if companies and governments apply resources sensibly.
India’s proposed reforms of the retail sector could well help to create dramatic change on the food issue, if carried through and not stalled by political opposition as last year.
Equally, more radical thinking could deliver major changes very rapidly.
Only ~1% of fresh water is actually used for drinking water, for example. The use of recycled water for other applications could therefore have a major impact. Reducing this waste would also reduce costs, and help make the ageing issues more affordable.
These challenges are thus some of the key opportunities for companies, as we transition to the New Normal.