The World's "Most Important" Problems

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The World

Thanks to the 24-hour news cycle, the media constantly reminds us of the many threats that confront mankind. But there are so many potential crises that understanding and prioritizing these challenges can be a challenge in itself.

To put these challenges into perspective, it's important to remember that the "Transition Phase" of the Digital Revolution has forced companies, governments, and individuals to face up to existential problems that were pushed into the background during the "Installation Phase." As we've demonstrated in prior issues, many of these problems are simply the inevitable by-products of continuing to implement the "conventional wisdom" of the Mass Production era in a world that has been dramatically transformed.

The Big Challenges Identified by the WEF Are Related

Of the many challenges and concerns facing civilization, the Trends editors believe five challenges, more than any others, will shape the evolution of the Digital Revolution. In a similar exercise, the World Economic Forum (WEF) recently identified 50 global risks facing the world over the next 10 years.1

The WEF classifies the 50 global risks into five categories, as follows:

The 10 economic global risks are as follows:

  1. Chronic fiscal imbalances
  2. Chronic labor market imbalances
  3. Extreme volatility in energy and agriculture prices
  4. Hard landing of an emerging economy
  5. Major systemic financial failure
  6. Prolonged infrastructure neglect
  7. Recurring liquidity crises
  8. Severe income disparity
  9. Unforeseen negative consequences of regulation
  10. Unmanageable inflation or deflation

The 10 environmental global risks are as follows:

  1. Antibiotic-resistant bacteria
  2. Failure of climate change adaptation
  3. Irremediable pollution
  4. Land and waterway use mismanagement
  5. Mismanaged urbanization
  6. Persistent extreme weather
  7. Rising greenhouse gas emissions
  8. Species overexploitation
  9. Unprecedented geophysical destruction
  10. Vulnerability to geomagnetic storms

The 10 geopolitical global risks are as follows:

  1. Critical fragile states
  2. Diffusion of weapons of mass destruction
  3. Entrenched organized crime
  4. Failure of diplomatic conflict resolution
  5. Global governance failure
  6. Militarization of space
  7. Pervasive entrenched corruption
  8. Terrorism
  9. Unilateral resource nationalization
  10. Widespread illicit trade

The 10 societal global risks are as follows:

  1. Backlash against globalization
  2. Food shortage crises
  3. Ineffective illicit drug policies
  4. Mismanagement of population aging
  5. Rising rates of chronic disease
  6. Rising religious fanaticism
  7. Unmanaged migration
  8. Unsustainable population growth
  9. Vulnerability to pandemics
  10. Water supply crises

The 10 technological global risks are as follows:

  1. Critical systems failure
  2. Cyber attacks
  3. Failure of intellectual property regime
  4. Massive digital misinformation
  5. Massive incident of data fraud/theft
  6. Mineral resource supply vulnerability
  7. Proliferation of orbital debris
  8. Unforeseen consequences of climate change mitigation
  9. Unforeseen consequences of nanotechnology
  10. Unforeseen consequences of new life science technologies

When the WEF asked more than 1,000 experts to rank the 50 global risks on a scale of 1 to 5, based on both severity and probability, their top five essentially matched the Trends top five, which are as follows:

  1. Putting an end to poverty
  2. Addressing chronic fiscal imbalances
  3. Adaptation to climate change, while unleashing our economy
  4. Managing the global water crisis
  5. Facing up to our mismanagement of population aging

This month's special issue of Trends focuses on these five mega-challenges and the unique opportunities we have to solve them in the 21st century. Each of the five subsequent trends we will explore in this issue is based on one of the five challenges.

Before we go deeper into each one, however, it's worthwhile to understand why we chose to focus on this subset of challenges.

Putting an end to poverty is just one of the five issues or obstacles related to "income inequality." They are:

  1. The inequality in income between those who are fully employed and those who are not. As we've previously highlighted, up to 50 percent of the people in the world who want a full-time job can't find one — that's roughly 1.8 billion people. We've examined this in such trends as The Ultimate 21ST Century Challenge: Good Jobs2 and The Global Youth Employment Crisis.3
  2. The inequality between those who have their basic physical needs met and those who don't. A large proportion of people have been left behind by globalization and technological progress. These are the 2 billion people who live in abject poverty despite the dramatic rise in affluence since the 1960s. We'll discuss this aspect of the inequality challenge in the trend Putting an End to Poverty, in this month's issue.
  3. The enormous inequality in income that exists among countries that are adjacent; consider France and Algeria, the United States and Mexico, or even Greece and Albania. These differences are creating enormous pressure for immigration, and that immigration is causing social tension. We've previously addressed this in Trends segments such as Global Migration Is Reaching a Crisis Point.4
  4. The growing perception of inequality in wealth and income between the top 1 percent in the United States and a few other large developed economies vs. the rest of the nation's population. This, we argue, is a response to the era of financial speculation that is coming to an end and the era of crony capitalism that still needs to be addressed. We've previously addressed this in several segments, including The Great American Income Inequality Debate.5
  5. Regional inequality within nations, driven largely by economic development decisions and social norms. We've addressed this in our trends related to The Geography of Affluence6 and Global Governance vs. Jurisdictional Competition.7

Better-Life Index

The roots of all these problems were probably addressed best in the trend Gross National Happiness and National Priorities.8

Addressing chronic fiscal imbalances is critical because it poses the greatest economic threat to geopolitical stability. It includes the enormous and rapidly rising debt-to-GDP ratio that is inextricably tied to the lopsided trade imbalances among nations and the extreme capital surplus. Until these imbalances are reined in, they will force the world to live with the possibility of a global recession, military conflicts between nations, and constraints on the standards of living for citizens of countries like the United States that have not yet taken the right steps to fix these problems. We've discussed this in The Global Capital Glut9 and Addressing Global Economic Imbalances.10

Adaptation to climate change, while unleashing our economy involves weighing the expected net present value of prevention and adaptation at specific times vs. the expected NPV of taking no actions. The WEF experts ranked both climate change adaption and greenhouse gas emissions high. We at Trends agree with the Copenhagen Consensus Group that says we need to focus on adaptation, because controlling emissions can't be shown to have a positive return on investment.

Because we've already covered this topic extensively in such segments as Now, for the Real Climate Change Debate11 and Cost-Effectively Adapting to Climate Change,12 our focus in this issue is on the unintended consequences of addressing climate change mitigation.

Managing the global water crisis is inextricably linked to food shortage crises. Together, these twin threats pose challenges to the daily survival of millions of people around the world. Until people can meet their basic needs for reliable, affordable sources of food and water, they can't focus on higher-order priorities such as becoming consumers, starting their own businesses, or participating in the Digital Revolution in meaningful ways. We've previously examined this issue in segments titled Economics of the Global Water Supply,13 The Great 21st Century Water Opportunity,14 and The New Food Revolution.15

Finally, facing up to our mismanagement of population aging addresses the greatest demographic peril facing the world. According to the "culture of scarcity" alarmists, the large numbers of elderly people will place an unprecedented burden on younger generations, creating catastrophes for the global economy and social unrest within individual nations. The Trends editors have tracked this trend for more than 25 years, most notably in segments titled Managing Demography,16 Boomers Move into Their Golden Years,17 and Global Demographics Favor U.S. Business.18

In our latest analyses of these five crucial challenges, we'll offer updated research on each of these trends, as well as innovative solutions to these problems and a set of exclusive forecasts for how we expect each of them to unfold in the coming decades.

References

  1. To access the report "Global Risks 2013" (Eighth Edition), visit the World Economic Forum website at: http://www.weforum.org/reports/global-risks-2013-eighth-edition
  2. Trends, April 2012, "The Ultimate 21st Century Challenge: Good Jobs." © 2012 by AudioTech, Inc. All rights reserved. http://www.audiotech.com/trends-magazine/the-ultimate-21st-century-challenge-good-jobs/
  3. Trends, December 2011, "The Global Youth Unemployment Crisis." © 2011 by AudioTech, Inc. All rights reserved. http://www.audiotech.com/trends-magazine/global-youth-unemployment-crisis/
  4. Trends, October 2006, "Global Migration Is Reaching a Crisis Point." © 2006 by AudioTech, Inc. All rights reserved. http://www.audiotech.com/trends-magazine/global-migration-is-reaching-a-crisis-point/
  5. Trends, December 2011, "The Great American Income Inequality Debate." © 2011 by AudioTech, Inc. All rights reserved. http://www.audiotech.com/trends-magazine/great-american-income-inequality-debate/
  6. Trends, August 2012, "The Geography of Affluence." © 2012 by AudioTech, Inc. All rights reserved. http://www.audiotech.com/trends-magazine/the-geography-of-affluence/
  7. Trends, November 2012, "Global Governance vs. Jurisdictional Competition." © 2012 by AudioTech, Inc. All rights reserved. http://www.audiotech.com/trends-magazine/global-governance-vs-jurisdictional-competition/
  8. Trends, June 2008, "Gross National Happiness and National Priorities." © 2008 by AudioTech, Inc. All rights reserved. http://www.audiotech.com/trends-magazine/gross-national-happiness-and-national-priorities/
  9. Trends, February 2013, "The Global Capital Glut." © 2013 by AudioTech, Inc. All rights reserved. http://www.audiotech.com/trends-magazine/the-global-capital-glut/
  10. Trends, December 2008, "Addressing Global Economic Imbalances." © 2008 by AudioTech, Inc. All rights reserved. http://www.audiotech.com/trends-magazine/addressing-global-economic-imbalances/
  11. Trends, June 2007, "Now, for the Real Climate Change Debate." © 2007 by AudioTech, Inc. All rights reserved. http://www.audiotech.com/trends-magazine/now-for-the-real-climate-change-debate/
  12. Trends, February 2012, "Cost-Effectively Adapting to Climate Change." © 2012 by AudioTech, Inc. All rights reserved. http://www.audiotech.com/trends-magazine/costeffectively-adapting-climate-change/
  13. Trends, October 2010, "Economics of the Global Water Supply." © 2010 by AudioTech, Inc. All rights reserved. http://www.audiotech.com/trends-magazine/economics-of-the-global-water-supply/
  14. Trends, May 2009, "The Great 21st Century Water Opportunity." © 2009 by AudioTech, Inc. All rights reserved. http://www.audiotech.com/trends-magazine/the-great-21st-century-water-opportunity/
  15. Trends, April 2012, "The New Food Revolution." © 2012 by AudioTech, Inc. All rights reserved. http://www.audiotech.com/trends-magazine/the-new-food-revolution/
  16. Trends, September 2007, "Managing Demography." © 2007 by AudioTech, Inc. All rights reserved. http://www.audiotech.com/trends-magazine/managing-demography/
  17. Trends, April 2012, "Boomers Move into Their Golden Years." © 2012 by AudioTech, Inc. All rights reserved. http://www.audiotech.com/trends-magazine/boomers-move-into-their-golden-years-4/
  18. Trends, September 2011, "Global Demographics Favor U.S. Business." © 2011 by AudioTech, Inc. All rights reserved. http://www.audiotech.com/trends-magazine/global-demographics-favor-business/

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