The World Economic Forum (WEF) has brought together technology companies, insurers and governments to tackle the risks brought to the global economy by technological innovations.
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The WEF has set up an initiative, Mitigating Risks in the Innovation Economy, to help close gaps in the current mechanisms managing risks resulting from IT innovations, to determine which organisations are liable, and to create data-sharing mechanisms.
Technologies such as drones, autonomous cars, cloud computing and interconnected systems bring with them new risks of disruption to society. In the past, a computer failure would not cause huge or lasting damage to society, but today, all sectors across the world depend on IT.
“As technologies emerge on their own, the risks are becoming so big and complex that businesses and governments will not be able to handle them,” said Inga Beale, CEO at Lloyd’s of London. “With this initiative, we want to address that.”
Victoria Shirazi, project lead for Mitigating Risks in the Innovation Economy, said no one currently knows the magnitude of society’s risk exposure to new, uninsured technologies. “A technology failure that was once both small and contained can now cascade into potentially catastrophic losses,” she said. “This initiative will help societies prevent, respond to and recover from these new risks.”
In the forum, insurance companies such as Allianz, Lloyd’s, Swiss Re and Zurich join the likes of Cisco, IBM and Siemens, and senior government officials.
The WEF gave examples of emerging risks. A cyber attack on the US’s northeast electrical grid could result in economic losses as high as $222bn, it said. The WEF also said that disruption of the cloud could result in economic losses ranging from $15.6bn to $121.4bn and that compromised software upgrade for globally interconnected systems could put between $4.5trn and $15trn of global GDP (gross domestic product) at risk over five years. Most of these risks are not insured, it added.