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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 are potentially 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 war, energy constraints and disruptions, pandemics, climate change, food constraints and disruptions, ecosystem destruction, fracturing social cohesion or vulnerabilities within the financial system in isolation, but as one among multiple intensifying and interacting drivers of risk. What they interact through, the synchronised global dance of societal infrastructures (supply-chains, critical infrastructures, financial systems, and social cohesion…) are proving themselves to be vulnerable transmitters, amplifiers, and generators of further disruption.

This expresses a rapidly transforming risk environment. There are three broad aspects to this transformation. The first is that 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 civilisation has become more complex, synchronised, globally delocalised, interdependent, efficient, volatility suppressed, irreversible and high-speed.

Secondly, we are facing a convergence of intensifying stressors that even on their own, would represent a threat to systemic stability. Amongst the most urgent are constraints to the most critical inputs to civilisation, especially upon the flows of energy and food. There are intensifying output stressors arising from the impacts of climate change and the multidimensional feedback our civilisation is having upon its ecological niche. Finally, there are intensifying stresses internal to civilisation arising from global indebtedness and credit system, new technologies, declining marginal returns to complexity and problem solving, and the growing potential for increasing polarisation within countries and conflict 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 socio-economic tipping points. Societies are likely to find therir 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 civilisation points towards re-enforcing global de-stabilisation, and a rising liklihood of severe systemic disruption, including irreversible systemic collapse. The evolved complexity, structural embedness, and speed of extant societal systems means that severe crises could emerge rapidly.

Growing destabilisation 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 overwhinming invested in a future that assumes some sort of recovery and continued socio-economic integration. But the growing likelihood of intensifying socio-economic-ecological stress, systemic de-stabilization and the potential for 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.