Schlagwort-Archive: Risk

After is before

Distance is a term that feels more like the distance between Earth and Sagittarius A (26,5000 light years) than the distance between Beijing and Duisburg. Via communication networks we are connected to every point on earth in almost real time. Since 1970, the number of passengers on global flights has increased more than tenfold to over 4 million per year. Today, people commute an hour to work on short-haul flights or by ICE or local transport. In other words, we are far-reaching connected across borders that once felt as inaccessible as the moon today. In such a world, political borders seem anachronistic. Viruses spread around the globe in a short period of time across frontiers. Neither vigorous slogans nor border closures prevent the common fate. And when one wave is over, another one comes. Because after is before.

A look at possible risks should blow the horn of dystopia and make us feel insecure, but rather remind us that in the future we will have to deal with such effects differently, as we can no longer afford further shutdowns.

  • Natural risks
    Global risks are rarely expected in nature and are considered to be locally manageable – in principle. The current virus crisis shows us that these critical situations do not respect borders or are limited to certain cultures. The present responses from experts and politicians are focused on short-term goals. Decisions are not based on possible collateral damage, nor do they consider their long-term effects – above all not the human lives that will be harmed additionally due to the measures.
    And what happens if next one of the mega volcanoes erupts and the global climate topples in a very short time? Or if a tsunami floods one of the world’s economic centers and the economy collapses in the aftermath? And anyone, who believes that we can protect ourselves against all eventualities should first of all be aware of the required efforts.
  • Political risks
    One of the effects of natural disasters will be political dangers. The societal systems will become unstable due to the dissatisfaction of the population. When panic already breaks out due to toilet paper the question arises, what we do, when things get really serious, when there is nothing left to eat and drink because the logistics channels that have been put in place no longer work and local suppliers can no longer compete with other countries. In an economy of scarcity, the black market emerges first and foremost, in which only the wealthy can afford the prices. In an effort to maintain control, the state will also use the current technical possibilities that we already know from China. And the political forces that want the revolution will feel strengthened by the shift to a surveillance state, which will lead to more and more terrorist attacks from left and right. However, the same applies as always: Be aware what you wish for. Over the past ten years, politicians and the electorate have prepared the ground for what is coming.
  • Technological risks
    A very sharp sword of Damocles is our information and communication infrastructure. No one has yet found the one switch to stop the worldwide web. However, there is an increasing number of malwares that attack all levels of IT. In addition, natural disasters could have corresponding effects – e.g. a solar storm or meteorite impact. The consequences of a collapse are unimaginable. Emergency generators do not help in these cases. There is nothing today that does not depend on the Internet: Waterworks, energy grids, hospitals, mobility, logistics of any kind, production of goods and food, communications, or the public authorities. A collapse of the Internet will take us back to Middle Ages. Without this nervous system, all cars, trains, pumps, elevators and so on will come to a standstill within a very short period of time. There is no way to communicate anymore – except for the runners, who walk from one place to another.
  • Economic risks
    In contrast to the above risks, the economic are easier to cope with – except for those who benefit from a flourishing economy – bankers, economic officials, investors. In the regions that have nothing to gain from the current economy not much will change the precarious existence in Africa, South America and large parts of Asia. Their supply is even more secure than in the world’s agglomerations, which can no longer be supplied. In the remaining regions, the price increases will lead to a change in consumer behavior. Currency fluctuations can be compensated by national or regional consumption. The cutbacks will regulate driving behavior and energy consumption. There are many examples from the past for dealing with shopping lines and empty shelves. Work, working hours, management styles and anybody else who wants to get rid of the bureaucratic ballast today will become naturally agile. In the end, the economy is part of the problem rather than its systemic solution – austerity measures in all areas of life, outsourcing to places with the cheapest labor and, in the absence of short-term profits, the de-economization of entire regions.

Bottom line: A virus is currently rampant, which threatens the elderly in particular. In the interest of their lives, the economy is being stopped by politicians. Everyone is looking at the stock indices and is now looking forward to rising share prices again, as if this were of benefit for employees and the self-employed. Nobody reports the damages, even to human lives, that are created by the shutdowns. The functioning part of the health care system is not the result of foresighted policy, but only possible through personal commitment and some difficult decisions of many, truly systemically important service providers in the hospitals and in everyday supply. The aftershock prepared by this control madness is unimaginable. And what has not yet been addressed at all is the question of what comes next. What do we learn from the current crisis management?

  • Solving a single problem without considering unwanted side effects threatens all. A holistic assessment of the situation is mandatory.
  • Federalist societies have reacted clumsily. Closing the borders of Germany or Europe oversees the fact that certain crises cannot be stopped by this. Not to mention European cohesion, which I hope will not be destroyed with this nationalism.
  • Politicians refer to experts in order to decide. Shouldn’t a task force of experts temporarily be given overall control?
  • The population obviously needs a strong hand to rule with prohibitions and closures, otherwise the individuals will continue unteachable as before. It remains to be seen how these extended powers will be brought back to normality.
  • In any case, a crisis leads to bad consequences and needs an evaluation and prioritization of all damages. The media and politicians should put their business model back for the moment and not creating even more insecurity in the population.

Not every country can afford the luxury of closing the shop. And we won’t be able to afford it again any time soon either. Hence: after is before.

The Ice cover – the ideal metaphor for risk

As soon as the temperatures fall below zero, an ice cover forms on water. In standing waters faster than in wild ones. Over time, more and more ice crystals arise and the ice cover is getting thicker. The rule of thumb indicates that a single person can enter an ice cover of at least 5 cm. About 18 cm is sufficient for cars to go onto the ice surface. From the shore you can neither see the bearing capacity nor the depth of the underlying water. Whether and where it is safe is pure speculation. In this respect the ice cover is similar to a risk.

Although it is possible to imagine ice covers and risks, it always is only estimation whether the worst will happen or not. In both examples, the following aspects should be considered.

  • Probability
    In all cases, the probability of occurrence is 100% as soon as the worst happens and the risky initiative fails, which actually is no longer a prediction – be it crossing a frozen lake or building a new airport. A reliable prediction is possible, if you even do not put yourself in that danger. Then the probability of occurrence is 0%. The remaining incidents can not be predicted reliably in terms of time or space. There is no choice but to prepare appropriate contingency plans depending on the foreseeable case. Hedges on the ice cover can be a safety rope or a prepared ladder, which bring you out of the danger zone. In business, appropriate measures are put in place to reduce the occurrence probability. Alternatively resources are prepared to counteract in the event of a crisis by shortening the damage duration and reducing the damage.
  • Possible damage
    The consequences of an adverse event differ according to their level of damage. An incident can in the worst case cost the life – by drowning in the water, because you can not breathe in the required time frame; or when you lose in business due to wrong speculations, because you have misinterpreted the signs of the times, ignored the Internet with your mail-order business and eventually the entire company faces bankruptcy. If there is no incident, then the potential size of the loss does not matter. The actual damage that can occur between these two extremes is hard to predict, because most of the time you cannot see the real consequences. The size of contingency preparation depends on the player in the decision maker – more or less rope and ladder on the ice cover or provisions in the business.

Dealing with the thickness of the ice cover and risks burdens. On the one hand, you are hampered by a rope and burdened by the transport of the ladder. On the other hand, resources are blocked in case of the worst and thus are no longer available for daily business. In both cases, preparation ensures viability.

Bottom line: Dealing with frozen waters and with risks consists of similar issues. On the one hand, it has to be estimated what the probability of an incident is. On the other hand, the possible amount of damage has to be assessed. Both are estimates that could be wrong. From the outside, the ice surface gives no indication of possible dangers. Exactly as the daily business does not provide indicators that it can come to a surprising slump. It is irresponsible when no presuppositions are made, because then you will be surprised by the harmful event – you break in the ice or suffer serious business losses. These similarities make the ice cover the ideal metaphor for a risk.