Definition and drivers of future global shocks

Extremely disruptive events, such as earthquakes, volcanoes, financial crises and political revolutions destabilise critical systems of supply, producing economic spillovers that reach far beyond their geographical point of origin. While such extreme events have been relatively rare in the past, they seem poised to occur with greater frequency in the future. Global interconnections accompanying economic integration enable some risks to propagate rapidly around the world. What do governments and multinational businesses need to do to prepare for the ripple effects of such events and to limit their negative consequences? The OECD International Futures Programme has completed an 18-month study on future global shocks, which took stock of the challenges in assessing, preventing and responding to several potential global risks. The working definition of “Global Shock” and several of the most important enabling drivers are presented here.