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Cyber security top of mind for WEF elite

Paula Gilbert
By Paula Gilbert, ITWeb telecoms editor.
Johannesburg, 18 Jan 2018

Cyber security risks, a deteriorating geopolitical landscape and environmental risks are among the top worries for 2018, according to The Global Risks Report 2018, published by the World Economic Forum (WEF).

According to the annual Global Risks Perception Survey (GRPS), cyber threats are growing in prominence, with large-scale cyber attacks now ranked third in terms of likelihood, while rising cyber dependency is ranked as the second most significant driver shaping the global risks landscape over the next 10 years.

"Geopolitical friction is contributing to a surge in the scale and sophistication of cyber attacks. At the same time cyber exposure is growing as firms are becoming more dependent on technology," says John Drzik, president of Global Risk and Digital at Marsh, which partnered with the WEF on the report.

"While cyber risk management is improving, business and government need to invest far more in resilience efforts if we are to prevent the same bulging 'protection' gap between economic and insured losses that we see for natural catastrophes."

'Cyber attacks' come in third place when looking at the five risks most likely to happen in the next 10 years. The top risk was 'extreme weather events', followed by 'natural disasters' and 'data fraud or theft' was the fourth most likely risk to come to fruition.

The annual report, released ahead of the annual WEF meeting in Davos, Switzerland next week, shows cyber security risks are also growing, both in prevalence and disruptive potential.

"Attacks against businesses have almost doubled in five years, and incidents that would once have been considered extraordinary are becoming more and more commonplace."

The financial impact of cyber security breaches is rising, and some of the largest costs in 2017 related to ransomware attacks, which accounted for 64% of all malicious e-mails, WEF says.

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"Notable examples included the WannaCry attack, which affected 300 000 computers across 150 countries, and NotPetya, which caused quarterly losses of US$300 million [R3.7 billion] for a number of affected businesses.

"Another growing trend is the use of cyber attacks to target critical infrastructure and strategic industrial sectors, raising fears that, in a worst-case scenario, attackers could trigger a breakdown in the systems that keep societies functioning."

The GRPS suggests that experts are in general preparing for another year of heightened risk. When the nearly 1 000 respondents were asked for their views about the trajectory of risks in 2018, 59% of their answers pointed to an intensification of risks, compared with 7% pointing to declining risks.

The report suggests a "deteriorating geopolitical landscape" is partly to blame for the pessimistic outlook in 2018, with 93% of respondents saying they expect political or economic confrontations between major powers to worsen and nearly 80% expecting an increase in risks associated with war involving major powers.

Top fears

Fears of global conflict rank high for most of those surveyed. According to WEF, leading the five risks that will have the biggest impact globally in the next 10 years was the threat of weapons of mass destruction.

The environment was also of major concern, with extreme weather events seen as the second biggest threat, followed by natural disasters; failure of climate change mitigation and adaptation; and water crises.

"Extreme weather events were ranked again as a top global risk by likelihood and impact. Environmental risks, together with a growing vulnerability to other risks, are now seriously threatening the foundation of most of our commons," says Alison Martin, group chief risk officer at Zurich Insurance Group, also a partner on the report.

"Unfortunately, we currently observe a 'too-little-too-late' response by governments and organisations to key trends such as climate change. It's not yet too late to shape a more resilient tomorrow, but we need to act with a stronger sense of urgency in order to avoid potential system collapse," Martin adds.

WEF says the GRPS has shown that environmental risks have grown in prominence in recent years, and the trend continued in the most recent survey, with all five risks in the environmental category being ranked higher than average for both likelihood and impact over a 10-year horizon.

"This follows a year characterised by high-impact hurricanes, extreme temperatures and the first rise in CO2 emissions for four years. We have been pushing our planet to the brink and the damage is becoming increasingly clear. Biodiversity is being lost at mass-extinction rates, agricultural systems are under strain, and pollution of the air and sea has become an increasingly pressing threat to human health.

"A trend towards nation-state unilateralism may make it more difficult to sustain the long-term, multilateral responses that are required to counter global warming and the degradation of the global environment," the report reads.

Future shocks

This year's report also introduced a new section called "future shocks", which is "a warning against complacency and a reminder that risks can crystallise with disorienting speed".

The future shocks are 10 short "what-if" scenarios, "not as predictions but as food for thought to encourage world leaders to assess the potential future shocks that might rapidly and radically disrupt their worlds".

Four of the 10 are tech or science related:

  • A tangled web: Artificial intelligence (AI) "weeds" proliferate, choking the performance of the Internet.
  • Precision extinction: AI-piloted drone ships take illegal fishing to new - and even more unsustainable - levels.
  • Inequality ingested: Bioengineering and cognition-enhancing drugs entrench gulf between haves and have-nots,
  • Walled off: Cyber attacks, protectionism and regulatory divergence lead to balkanisation of the Internet.

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