by Dante Disparte and Daniel Wagner
Technology continues to develop and change at a lightning pace. Socioeconomic forces are shifting. Collective revulsion at income inequality is growing. Concern about human rights, climate change, and the environment are prominent issues in global forums and legislative bodies. Natural resources are being depleted at an astonishing rate. Population growth is accelerating at an unprecedented pace in the developing world. All these issues — and many others — are contributing to a fundamental shift in how we should think about the world, and by extension, risk management.
The transparency and interconnectedness of information, the mobility of goods, services, and people, and the seemingly constant nature of change in the twenty-first century make for a truly breathtaking landscape from which risk managers and decision makers must view the world. In this increasingly complex environment, we have no choice but to be informed, shake off our pre-conceived notions about what constitutes operational “normality,” embrace change, and do so being prepared for battle. Why? Because to succeed in this kind of environment, a battle must be waged on how risk managers and decision makers think and act.
The need for twenty-first century risk management designed to tackle these issues is essential, yet risk management protocols are playing a game of constant catch up. As a result of the dynamic and constantly changing global landscape, risk managers and decision makers are struggling to respond, and have been forced into a state of perpetual reactivity. While it is absolutely true that some of today’s challenges cannot be predicted or prevented, others can, but even those require a change of mind set, standards, and protocols in order to address them proactively.
The ever-present risks of interstate conflict, terrorism, chronic unemployment/underemployment, extreme weather events, water crises and cyber-attacks represent the integration of political, economic, environmental and technological risks.