1.7: Crisis Management
Manage crisis and the "unknown unknown" Other Information:
The job of policy- makers is increasingly one of crisis management. There is robust evidence that the world is increasingly
interconnected, and unstable (also because of climate change). Crisis are by definition sudden and unpredictable. Dealing
with unpredictability is therefore a key requirement of policy- making, but the present capacity to deal with crisis is designed
for a world where crisis are exceptional, rather than the rule. Donald Rumsfeld, former secretary of state, famously said
during the Iraq war that while the US government was capable of dealing with the "known unknown", the difficulty was the increasing
recurrence of "unknown unknown": those things that we don't known that we don't know. There is evidence that the instability
and chaotic natures of our world is increasing, because of its increasing connectedness and of long term changes such as climate
change. Every year, intense climate phenomena throw our cities in disarray, because of snow, flooding, fires. Each crisis
seems to find our decision- makers unprepared and unable to deal with it promptly. . As Taleb (2007) puts it, we live in the
age of "Extremistan": a world of "tipping points" (Schelling 1969) "cascades" and "power laws" (Barabasi 2003) where extreme
events are "the new normal". There are many indications of this extreme instability, not only in negative episodes such as
the financial crisis but also in positive development, such as the continuous emergence of new players on the market epitomised
by Google. The random vulnerability of today's world is well illustrated by this chart from the EC DG RESEARCH.
Indicator(s):
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