It’s frequently stated that the 4th industrial revolution is a period in which change and disruption come ever more frequently.  Research from Citi Global Perspectives and Solutions in conjunction with the Cambridge Centre for Risk Studies at Cambridge Judge Business School argues that the same is true for crises.

The report suggests that our difficulty in predicting such events is less due to their inherent uncertainty as it is to do with our failure to adequately recall events from the distant past.

“As a result of a myriad of factors, global risks have changed in their frequency and impact as well as their economic tenacity throughout the 20th century,” the authors say. “The average period of time between crises from 1700 to 1900 was 21 years; since 1960, the interval has shrunk to just eight. Similarly, the interval between major natural, technological, and geopolitical catastrophes has also shrunk as the impacts of these risks have evolved a global spread.”

Frequency of risks

The authors examined 10 key systemic risks: biodiversity loss, human pandemics, climate change, natural disasters, anti-microbial resistance, cyber risks, global financial crisis, agriculture-related pandemics, global governance failure, and global economic crisis.  They then explored the links between these different risks.

“Many of the prevention and mitigation measures have the ability to drive economic growth, with significant multiplier effects of up to 15 times,” they say. “These would be attractive against any economic backdrop, but against the current global economic malaise of secular stagnation and ultra-low returns across all asset classes, it is surely an opportunity we cannot afford to pass up.”

The report highlights the investment opportunities, which the authors suggest could total around $3 trillion per year, that could reduce the frequency, probability, and severity of the very systemic risks of things such as pandemics and climate change.

“We can either worry about the future and deal with it when it comes – if indeed we can – or tackle these risks head on, embrace the very feedback loops which make them systemic, save trillions of dollars, and drive economic growth in the process,” they say.