acronym for remembering red and bold memorize will be on exam Chapter 11 Global risk occurrence that causes significant negative impact for several countries and industries over a time frame of up to 10 years Categories economic environmental geopolitical societal technological Systemic Risk breakdowns in an entire system as opposed to breakdowns in individual parts or components modest tipping points combining indirectly to produce large failures risk sharing or contagion as one loss triggers a chain of others hysteresis or systems being unable to recover equilibrium after a shock Risk is analyzed along these 3 parameters 1 highest concern qualitative 2 3 likelihood and impact quantitative interdependencies systemic Top 10 systemic risks of highest concern Fiscal Crisis in Key Economies Structurally High Unemployment Underemployment Water Crises Sever Income Disparity 1 2 3 4 5 Failure of Climate Change Mitigation Adaptation 6 Greater Incidence of Extreme Weather Events 7 Global Governance Failure 8 Food Crises 9 Failure of a Major Financial Mechanism Institution 10 Profound Political and Social Instability Systemic Risk Trends to watch think DESTESS Demographic Trends aging Societal Concerns extremism youth unemployment gender inequalities Technological privacy mismanagement Environmental fracking etc Science and Technology 3 D printing Economic monetary policy Social and Political cost of living longer Three specific risk focuses Geopolitical risks low level conflicts red and bold memorize will be on exam acronym for remembering geopolitics and systemic sectors energy financial services healthcare Youth risks education and employment think about Spain Greece 50 youth unemployed supporting older and aging generations professional vs formal education education v training youth dissatisfaction and politics Cyber risks possible cyberwarfare smart grid global navigation satellite systems Edward Snowden fiasco Strategy for Managing Global Risks ID Risk Prioritize Top Risks Undertake Risk Assessment ID Risk Management Options Design RM Strategy Design Crisis Management Strategy Implement Monitor Chapter 12 What makes a disaster fatalities economic effects damage FED Difference between natural disaster and a great natural disaster not a clean definition but death toll damage effect on economy An example would be the Haiti earthquake Gregory van der Vink said that deaths from natural disasters are due in part because of gov ernments not adapting and responding to known risks People tend to be altruistic kind in times of emergency creates incentives in non emer gency times Economic Losses 35 40 top insured losses were in the US Japan and Europe better infrastructure leads to quicker recovery and more aid insurance has completely changed economic development insured losses were much smaller in developing nations red and bold memorize will be on exam acronym for remembering To Analyze Natural Hazard Risk Probability frequency and magnitude will it happen how many years until it will happen with the same magnitude again magnitude severity of events and their frequency have an inverse relationship aka a Hurri cane Katrina is not common you cannot avoid or stop natural disasters To combat natural hazard risk resilience and mitigation Population phases pre transition high birth and death rates transition low death rates high birth rates post transition low death and birth rates Disasters can happen anywhere but megadisasters are very concentrated Poorer countries have a higher share of risk greater economic losses and less resilient and can lead to real poverty Biggest exposure points small island developing states and land locked developing countries acronym for remembering red and bold memorize will be on exam Disaster Risk Drivers poor urban governance vulnerable rural livelihoods declining ecosystems global climate change Poor nations are worse off because they are less resilient have no insurance which hurts their income welfare AND human development when they were already falling behind However risk IS changing we may make progress and become less vulnerable but exposure is growing because of population and economic development Hyogo Framework 1 Ensure that disaster risk reduction is a national and local priority with a strong institutional ba sis for implementation 2 Identify assess and monitor disaster risks and enhance early warning 3 Use knowledge innovation and education to build a culture of safety and resilience at all lev els 4 Reduce underlying risk factors 5 Strengthen disaster preparedness for effective response at all levels Progress could be enhanced by early warning systems better international response sea walls survivable power and water systems Chapter 13 Increasing elderly population means more services for aging population with fewer people in the workforce to provide these services life expectancy is increasing the number of people 80 will double in 30 years less entrepreneurial Major Challenges of Aging Population 1 Slower Economic Growth 2 3 Shrinking ratio of workers to pensioners A larger percentage of the population would be consuming rather than saving could be bad for investment opportunities which would be detrimental for the economy US will fare better than rest of developed world in terms of decrease in GDP could actually be come more influential Opportunities need for health care housing pharmaceuticals travel entertainment disposable income for elderly Inefficiency in Labor Markets red and bold memorize will be on exam labor shortages acronym for remembering International markets are more intertwined Chapter 14 Why do we need political risk analysis 1 2 The US is making the world a more volatile place 3 Offshoring trend 4 Increasingly reliant on energy from political risk states Economic Analysis CAN a particular country pay its debt Political Analysis WILL a particular country pay its debt more subjective than econ Stability can the countries not create shocks and ride out shocks that do occur Shocks internal transfer of power etc external terror campaign etc DESIX Stability Index Government Society Security Economy most developed countries are the most stable but also have the least growth opportunities
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