The Global Risks Report 2024

Risk governance: End of development? FIGURE 2.23 Source World Economic Forum Global RisksPerception Survey 2023-2024.“Which approach(es) do you expect to have the most potential for driving action on risk reduction and preparedness over the next 10 years? Select up to three for each risk.” Risk categories Economic Environmental Geopolitical Societal Technologicala b c d e fghia b c d e fghi Lack of economic opportunity Labour shortagesa b c d e fghi Unemployment 37% 44% 16% 20% 53%37%16%34%45%40%47% 13% 12% 42% 52%16%32%45% 19%36% 10% 10% 28% 53%32%50%53% Share of respondentsApproach a. Financial instruments b. National and local regulationsc. Minilateral treaties and agreements d. Global treaties and agreements e. Development assistancef. Corporate strategiesg. Research & developmenth. Public awareness and education i. Multi-stakeholder engagement Acting today As much as the green transition and frontier AI pose radical disruptions to traditional economic models and pathways to development, they also offer substantial opportunities. With careful management and a degree of international cooperation, effective labour and social mobility can ensure that prosperity, rather than risks, are shared across borders, unleashing productivity benefits offered by both economic transformations, and enhancing human development. For example, while Unemployment is considered to be addressed primarily by Corporate strategies and National and local regulations (Figure 2.23), a rise in remote work and non-traditional employment arrangements, alongside technology and skills transfers, could help address global inequalities in access to economic opportunities. Current efforts to reshape the global tax regime should also target emerging sources of inequity and support developing markets in capturing a share of the next generation of value chains. The support of multilateral and international finance mechanisms could also reduce real and perceived risks in the most vulnerable countries to unlock financing flows. The expanded use of guarantees could broaden the potential private investor base – or blended finance structures, including with the support of philanthropic investors, could improve the perceived risk-return profile, opening these investment opportunities to institutional investors. 102 In the face of these structural shifts to the employment landscape, very few demographic groups, industries or countries can remain complacent. Recognizing that both the impacts of climate and AI on job markets will not be uniform, solutions to improve economic mobility must be tailored to address specific vulnerabilities, such as labour shortages, on an industry- and country-level basis. For example, human capital that is “stranded” by the green transition – i.e., displaced workers from carbon-intensive industries – could help address green labour shortages if geographic, economic or skills barriers can be overcome. A stronger focus on sectors that go beyond narrow definitions of tech and green, such as health, care, education, tourism, hospitality, agriculture, personal services and culture – each of which tends to favour human traits and generate large-scale employment – can also help countries support the structural transitions of their labour markets and workforces. The public and private sector will need to work together to ensure the skills transition from sunset to sunrise roles. Global Risks Report 2024 67