But rapidly increasing population density can create severe problems, especially if planning efforts are not sufficient to cope with the influx of new inhabitants. The result may, in extreme cases, be widespread poverty.
The Global Risks Report looks at four areas that face particularly daunting challenges in the face of rapid and unplanned urbanization: infrastructure, health, climate change, and social instability. In each of these areas we find new risks that can best be managed or, in some cases, transferred through the mechanism of insurance. The availability and quality of infrastructure are at the core of many of the challenges faced by rapidly urbanizing cities in developing countries, while underinvestment is posing similar challenges in most developed economies WEF data.
Infrastructure failure would have significant implications for property and business continuity for city authorities as well as local and central Government bodies. Insurers can help in these areas in terms of risk engineering advice on infrastructure maintenance and also appropriate levels of insurance property damage and business interruption coverage.
As cities expand rapidly, there is a risk that infrastructure will not keep pace with their growth or the increased expectations of their populations. Action is urgently needed to close the infrastructure gap and reduce the potential for risks to have catastrophic cascading effects. The OECD estimates that governments will have to spend approximately USD 71 trillion by to provide adequate global infrastructure for electricity, road and rail transport, telecommunications, and water.
This level of financing may not be achievable given that many governments are under tight budget constraints and that many developing countries allocate much of their national income to meeting the basic needs of their population.
Consequently, cities are looking for public-private collaboration to involve the private sector in the design, construction and maintenance of infrastructure. Throughout the 20 th century, the health of city dwellers increasingly benefited from better access to education and healthcare, better living conditions, and targeted public-health interventions.
In advanced economics, emergency medical care can be accessed within hours and advanced facilities for longer term treatments are readily accessible. However, when urbanization is rapid and unplanned, a combination of high population density, poverty and lack of infrastructure can have the opposite effect, fostering conditions for communicable diseases to flourish. It is striking that, today, almost million urban dwellers lack adequate sanitation.
The problem is particularly acute in sub-Saharan Africa and south-central Asia, where 62 percent and 43 percent, respectively, of the urban population live in slums and are faced with unacceptable levels of risk to illnesses, worm infections, cholera and diarrhea. The economic impact of Ebola is enormous for the affected countries and neighboring states. One of the key aggravating factors to the Ebola crisis was the lack of a governance mechanism that would allow an effective link between what was being observed at the country and city levels and the alert mechanisms needed to trigger an emergency response.
Rapid, inadequate and poorly planned expansion of cities can also leave urban populations highly exposed to the effects of climate change. The migration from rural areas to cities is at least partially driven by the increasing prevalence of extreme weather; however cities tend to be located near the sea or natural waterways, where they are at more risk of flooding. Making cities more resilient to extreme weather events should be a priority for both local governments and the private sector.
The insurance industry has a lot to offer in terms of risk management advice, products and services i. It provides an overview and key insights into the flooding i. Ultimately, new migrants in cities are expected to create greater economic value than they would have in the countryside.
In a society where real-time information is completed by ever more powerful analysis tools, and where businesses are driven to be ever more responsive to change, the need to verify has never been more important. The need to ensure trusted answers is the ongoing challenge for everyone involved in this Fourth Industrial Revolution.
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Leadership in the Fourth Industrial Revolution: It's time for an upgrade. License and Republishing. Written by. More on Fourth Industrial Revolution View all. Climate change: How can we make greener steel and concrete? Here's why closing the cybersecurity skills gap is critical to digitalization Malicious actors are increasingly targeting the weakest link in tech systems: human beings. Which trends are driving the autonomous vehicles industry? First Movers Coalition is tackling the climate crisis 04 Nov Even though it often engenders opposition, family planning is more crucial then ever, as the rapid population growth continues to create an explosive situation.
Rapid growth has led to uncontrolled urbanization, which has produced overcrowding, destitution, crime, pollution, and political turmoil. Rapid growth has outstripped increases in food production, and population pressure has led to the overuse of arable land and its destruction.
Rapid growth has also hampered economic development and caused massive unemployment. Ultimately, rapid growth has undermined the quality of life of people.
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