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World Economic Forum warns of cyber insecurity in times of “epochal change”

The annual Global Risks Report by the World Economic Forum (WEF) has named widespread cybercrime and cyber insecurity among the top global threats for the first time.

The report said that Russia’s war in Ukraine and the COVID-19 pandemic had set in motion “an epochal change” to the global order and would accelerate other global threats over the next decade.

These include concerns over widespread cybercrime and cyber insecurity, a new entry into the report’s ranking of the top 10 most severe global risks that could potentially shake up the world in the next decade.

It said cyber insecurity would remain a persistent threat and a strong driver of other risks such as digital power concentration, digital inequality, and breakdown of critical information infrastructure.

Sectors like “fragile health systems” were particularly vulnerable and could collapse under the weight of large-scale cyber attacks, WEF warned. It said that cyber-attacks could also be part of a combination of “catastrophic” events like wars and pandemics.

“Malicious activity in cyberspace is growing, with more aggressive and sophisticated attacks taking advantage of more widespread exposure,” the report read.

It noted a “simultaneous and compounding” impact on global security that new technologies emerging in parallel would have.

“Quantum computing may be harnessed to identify new materials for use in stealth technologies, and cyber and information warfare will be deployed to target vulnerabilities in increasingly sophisticated military technologies,” the report said.

It said that digital tools, including increasingly sophisticated AI, edge computing, or autonomous technologies, would pose new challenges as their role in the functioning of cities and critical infrastructure grew.

“The proliferation of data-collecting devices and data-dependent AI technologies could open pathways to new forms of control over individual autonomy,” the report warned.

Uninsurable threat?

The report draws on the survey of over 1,200 experts, policy-makers, and industry insiders and has been produced in cooperation with Marsh McLennan and Zurich Insurance Group.

The chief executive of the Zurich Insurance Group, one of the largest in Europe, has recently told the Financial Times that cyber-attacks – not natural catastrophes – would become “uninsurable” as disruption caused by hacks continued to grow.

This concern is reflected in the Global Risks Report, which found that businesses considered cybercrime and cyber insecurity a greater threat than governments.

While respondents from the private sector ranked it as the fourth most severe global risk in the short term – or two years, government respondents put it in ninth place.

Overall, it was ranked the eighth most severe threat the world would face, both short-term and long-term. Social, economic, and geopolitical risks were seen as most pressing in the next two years, and environmental risks were expected to dominate over the next decade.

"Toxic mix"

Unsurprisingly, the energy supply and cost-of-living crises were seen as top threats in 2023. Cyberattacks on critical infrastructure have also made the top five, alongside rising inflation and food supply crisis.

Organizations face “the most difficult geo-economic conditions in a generation,” according to Carolina Klint, risk management leader for continental Europe at Marsh.

“At a time when countries and organizations should be stepping up resilience efforts, economic headwinds will constrain their ability to do so,” she said.

WEF Managing Director Saadia Zahidi warned that a “toxic mix” of known and rising global risks meant that “a new shock event, from a new military conflict to a new virus, could become unmanageable.”

While some of the risks were “close to a tipping point,” collective action could still mitigate emerging threats, WEF said.

“Greater collaboration across industries and between countries – in terms of coordinated funding, research, and data sharing – is critical,” it noted.

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