Column by the President of Hitachi Research Institute, Mizoguchi
2024 was a "year of elections." In many major nations, citizens expressed their dissatisfaction with the status quo through elections, leading to ruling parties losing seats. As a result, many new governments emerged, while others were forced to adjust their policies. Consequently, 2025 will likely be a "year of policy shifts." The challenge lies in the fact that while we know policy directions and international relations will change due to these transitions, we do not know precisely how or to what extent they will shift. This uncertainty reflects a growing and increasingly diverse set of "known unknowns." Examples include the second Trump administration, supply-demand dynamics of AI and energy, the polarization of global politics, Middle Eastern tensions, supply chain disruptions, and the worsening impacts of climate change.
Furthermore, the likelihood of unforeseen "unknown unknowns" appears to be increasing. Since 2000, we have witnessed pandemics, wars, large-scale terrorist attacks, and abrupt social upheavals—events no one anticipated. This is driven by the intricate interplay of macro factors such as geopolitics, the environment, society, and technology. These interconnected and increasingly complex structures make it exceedingly difficult to predict future challenges. The world today may seem caught off guard by risks or perpetually lagging in its response to them.
Various organizations have released risk forecasts for 2025. While it is challenging to accurately predict unknowns even for a single year, contemplating possible risk and opportunity scenarios is far from futile. Starting from these thought experiments enable planning and action, followed by adjustments and leaps forward. Based on discussions at Hitachi Research Institute, this year’s top ten risks are as follows:
A common backdrop to these risks is the relationship between rapidly advancing technology and the global environment, i.e., the platform that enables it, where "Soukoku"*1 is taking precedence over "Soushou"*1. Additionally, self-serving nationalism, which gained justification through the U.S.-China rivalry, has spread across the world like falling dominoes. The current trends seem to favor change over stability, the present over the future, and individual interests over collective welfare. Whether these shifts are steppingstones toward harmony or the onset of uncontrollable chaos remains uncertain.
However, diverse risks also present diverse opportunities. The expansion of known unknowns simultaneously broadens the range of choices available. How we address these risks—challenges—will test the mettle of politicians, executives, and leaders. Rather than reacting to problems as they arise, it is more effective to anticipate likely future themes, envision scenarios, and take proactive action. While analyzing and addressing new challenges is undoubtedly important, this reactive approach inherently places us behind the curve. When we lag behind risks, they manifest as tangible damage. By adopting the strategy of "preemptive anticipation" (a concept in martial arts), we can transform these top ten risks into top ten opportunities.
Note 1: These concepts originate from the Chinese yin-yang and five elements theory. In the context of relationships, "Soushou"(mutual promotion) refers to a dynamic in which two elements enhance and support each other. In contrast, "Soukoku"(restraint) describes a conflicting relationship in which elements oppose and hinder one another.
According to the Encyclopedia Britannic, "Soushou" describes the cycle where wood generates fire, fire generates earth, earth generates gold, gold generates water, and water generates wood. Conversely, "Soukoku" refers to the dynamic where water restrains fire, fire restrains gold, gold restrains wood, wood restrains earth, and earth restrains water.
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