“Never take things for granted and don’t rely on the known world.”
“The systemic nature of our most significant risks calls for procedures and institutions that are globally coordinated yet locally flexible.”
-From the Global Risks 2014 Report
What trends are occurring in the worldwide environment that could impact our industry and, more specifically, our business? In general, accountants are so detailed oriented that we sometimes don’t pay attention to the “bigger picture” and don’t see the impact emerging business models, innovative technologies or global competition have on our organizations.
Systemic risk can be defined as the “risk of breakdowns in an entire system characterized by modest tipping points combining indirectly to produce large failures, risk-sharing or contagion, as one loss triggers a chain of others, and ‘hysteresis,’ or systems being unable to recover equilibrium after a shock.” In an inter-connected, multi-polar world, potential events in one area may have global impact. This session discusses six mega-trends and how they can create both hazards and opportunities for your company.
*Four indicators of change in today’s world
*Four primary risks identified by the Global Risks 2014 Report, based on a survey of the World Economic Forum’s multi-stakeholder communities. The report maps 31 global risks according to level of concern, likelihood, impact and interconnections
*Six mega-trends derived from a review of predictions from five reliable sources
*Ways to mitigate risk or seek opportunities based on knowledge of these trends
*What systemic risks are and why it is so important to take a holistic view in today’s complex, global environment.
*Review each of the six mega-trends:
#1 - Climate change and impact on water shortage, food production and severe weather events
#2 – Profound political and social instability due in part to unemployment / under-employment and increasing economic disparity
#3 – Changing demographics including an ever-aging world
#4 – Greater global connections resulting in geo-strategic competition and shifts in global economic power
#5 – Accelerating technological change
#6 – Increased urbanization
*Determine how an understanding of these mega-trends can help you mitigate risk in your organization and how these trends can even create opportunities for “first movers”