- Climate change, COVID-19 and war in Ukraine are world-shaping events accelerating crises from growing hunger, refugee flows and inequality to shocks in supply chains, energy prices and global growth. Companies and countries need to pivot rapidly from reactive risk management to strategic recovery so they are better prepared for the next crisis.
- New research by the World Economic Forum suggests the cost of failure to build resilience to crises is between 1% and 5% of annual global GDP growth. For example, workforce attrition during COVID-19 shaved 3.6% off growth in some countries, while disruptions to energy and supply chains driven by current crises are wiping an estimated 1%-2.5% off global GDP.
- The World Economic Forum today launches the Resilience Consortium, which brings together ministers, chief executives and heads of international organizations, to accelerate collective action across key resilience drivers for the global economy and develop a common resilience framework.
- Resilience comprises a set of strategic capabilities for achieving long-term, sustainable and inclusive growth. A shared framework is a prerequisite for a coordinated, systematic approach to resilience. It would provide organizations with a common resilience language, structure and objectives, and guidance on how to protect and enhance sustainability and inclusiveness in an environment of more frequent crises and disruptions.
- Resilience for Sustainable, Inclusive Growth, a white paper published today, outlines seven key resilience drivers and the need for economies and societies to build a resilience “muscle”.
- Read more and follow the live-stream discussion at the Forum’s Annual Meeting 2022 on Financing Resilient Economies and Societies, on Tuesday, 24 May at 11.00 CEST.
Geneva, Switzerland, 20 May 2022 – COVID-19, climate change and, most recently, the war in Ukraine and the ensuing refugee crisis, are the latest reminders of the unprecedented capacity of external shocks to disrupt economies and societies. In a world of continuous, overlapping disruptions, organizations need to build and manage resilience to secure a sustainable, inclusive future for all.
Resilience for Sustainable, Inclusive Growth, a white paper published today, outlines seven key drivers of resilience, which have fundamental, cross-cutting business, economic and societal implications: climate, food, and energy; people, education and organizations; healthcare; sustainable economic development; trade and the supply chain; digital trust and inclusion; and finance and risk.
The United Nations, the World Economic Forum, McKinsey Global Institute, the International Monetary Fund and other leading organizations estimate that a significant share of annual GDP growth will depend on the degree to which organizations and societies develop resilience. Growth differentials of between 1% and 5% globally can be expected depending on how leaders respond to the many challenges, including climate change, the energy transition, supply-chain disruptions, healthcare availability, and income, gender and racial inequalities.
The World Economic Forum, in collaboration with McKinsey & Company, is launching the Resilience Consortium, a new public-private leadership effort to drive global resilience. The consortium is bringing together leaders from the public and private sectors who are committed to advancing resilience globally – across regions, economies and industries. The aim is to develop a shared, comprehensive view of resilience and its drivers to help policy-makers and business leaders recognize the opportunities and lay the foundations of sustainable and inclusive, long-term global growth.
Building on existing Forum efforts on these resilience drivers, the Resilience Consortium will work to unlock synergies, accelerate collective action and enable a more systemic approach to investing in resilient economies and societies. The consortium will be led by a Steering Committee, comprising a dedicated group of public and private sector leaders across industries and geographies.
Experience of past crises has taught us five key lessons: managing disruptions defines sustainable growth more than managing continuity; crises evolve across categories and do not have single-point solutions; networks hide interdependencies, accelerating crises (as well as recovery); inadequate responses and unpreparedness can double the damage of crises; and crises disproportionately affect the most vulnerable in a society.
Børge Brende, President of the World Economic Forum, said: “Building greater resilience has become a defining mandate for this generation. The war in Ukraine is having a devastating impact not only on the people of the region but also knock-on effects on global commodity prices that may cause political and humanitarian crises in other parts of the world. There is an urgent need for more collective action and coordination by the public and private sectors to mitigate risks and sustain growth against disruptive shocks, especially among the most vulnerable populations. Policy decisions and financial commitments made today will determine the future course of the planet, economies and societies. Now is the time for action.”
Bob Sternfels, Global Managing Partner of McKinsey & Company, said: “Our research shows two things: 1) failure to invest in resilience is costly and far exceeds the cost of weather proofing ahead of disruptions; and 2) resilient organizations outperform non-resilients before, during and after crisis. We are convinced that public and private sector organizations must take a new approach developing resilience that goes beyond defensive stances. In light of today’s increased economic volatility, fundamental environmental and societal challenges, and continuous disruptions, the time is now to build resilience as a strategic muscle. The Resilience Consortium will work towards a common resilience framework for public and private-sector organizations that can help organizations drive sustainable, inclusive growth.”