blob

The Transformation of Risk

Orientation

We have entered a period where the risks to the foundations of human security are becoming more extreme in their potential impacts, more probable in their likelihood, and irreversible in their duration.

The conditions that underpin the casual expectations of our lives — that there is food in the supermarket, electricity, water and sanitation are available, we can communicate, money works, production and supply-chains hum, government functions and societies are at peace have been taken for granted. We have habituated to this, a reflection of its long-term stability and our assumptions of continuity.

In 2018 the United Nations Office of Disaster Risk Reduction warned in its Global Assessment Report that: with the certainty of near-term non-linear changes, the critical assumption of the relationship between past and future risk must now be revisited. The last few years have given us a vivid foretaste of this new and increasingly dangerous and uncertain future. It is one where we cannot consider in isolation climate change, energy constraints and disruptions, war, pandemics, food constraints and disruptions, and fracturing international and social cohesion. They are among multiple intensifying and interacting drivers of risk. What they interact through, the synchronized systems and networks of a globally integrated civilization is a potentially vulnerable transmitter, amplifier, and generator of further disruption.

This expresses a rapidly transforming risk environment. There are three broad aspects to this transformation. The first is that civilization and the integrated systems upon which we depend- such as critical infrastructures, supply-chains, financial systems, and economic production (see figure on the top left)– have become increasingly fragile and societies’ more vulnerable as civilization has evolved to become more complex, synchronized, globally de-localized, interdependent, high-speed, efficient, volatility suppressed, and irreversible. This vulnerability is has been rarely exposed, but is a contributor to latent risk.

Secondly, we are facing a convergence of intensifying stressors and shocks that even on their own, would represent a threat to systemic stability. Amongst the most urgent are constraints to the most critical inputs to civilization, especially upon the flows of energy, food, and materials. There are intensifying output stressors arising from the impacts of climate change and the multidimensional feedback our civilization is having upon its ecological niche. Finally, there are intensifying stresses internal to civilization arising from global indebtedness and credit system, new technologies, declining marginal returns to complexity and problem solving, and the growing potential for increasing polarization and conflict within countries and between them.

Thirdly, there is the interaction of these intensifying stressors through increasingly vulnerable societal systems. This can generate and amplify economic, social and political stress, drive the non-linear cascading of shocks, make compounding stresses and shocks more likely, and drive socioeconomic tipping points. Societies are likely to find their resilience declines, making them more vulnerable to further stress and the next shock, which will tend to arrive with higher frequency and be of greater scale.

While subject to deepening intrinsic uncertainty, the trajectory of global civilization points towards re-enforcing global de-stabilization, and a rising likelihood of severe systemic disruption, including irreversible systemic collapse. The evolved complexity and speed of societal systems means that severe crises could emerge rapidly.

Growing destabilization can be expected to increasingly undermine efforts to the mitigate stressors driving risk, enact system change, and build resilience into extant systems. The priority will increasingly be the maintenance of fraying economic, social and political conditions.

We do not know what the future will bring, but as a society we are overwhelming invested in a future that assumes some sort of recovery and continued socioeconomic integration. But the growing likelihood of intensifying systemic de-stabilization and the potential of irreversible systemic failure, coupled with the potentially catastrophic impacts means there is a strong risk management argument for putting more effort into engaging with the consequences of severe and prolonged down-side risks.

The work of Korowicz Human Systems is focused on understanding integrated systemic risk, and supporting contingency planning and preparedness efforts so that we can face into that future together, even if the path is perilous and uncertain.