By Ingo Ploger, Entrepreneur, President of Brazilian chapter of CEAL.
When designing scenarios and megatrends, some developments were identified that offered possibilities for the future. Anything outside these possibilities was considered a utopia.
However, research groups that identified disruptive events that “bombarded” trends and tested them for their impacts originated trend changes. The evaluations were simulated in simple models. With the increase in processing capacity, current models can calculate impacts at speeds never imagined before. Therefore, what evolved faster than this processing were the complexities of economic, social and political relations. Even greater is the speed of technological complexity and its interactions, whose simulation becomes very difficult. It remains for us to simulate, in larger spaces, megatrends and in less complex systems, the most disruptive impacts.
These disruptive impacts are no longer found in isolated systems, but increasingly in complex, global, and difficult to imagine systems.
The most obvious disruptive events are natural disasters. Earthquakes, tidal waves, volcanoes; these are unpredictable in time, in intensity, and in dimension, although the location where they can occur are of common knowledge. What is new is the extent of their side effects. When the Grimsvötn Volcano in Iceland in 2010 erupted, its toxic clouds paralyzed commercial aviation in Europe for weeks, as did the Chilean Puyehue Volcano in 2011, affecting Argentina, Uruguay and the southern part of Brazil. Aviation has a strong impact on commercial and human relations today between countries. What was the impact of this event?
In Japan in 2011, in the Fukushima disaster there were three accumulated disasters, the earthquake, the tsunami and the consequent leakage of contaminated nuclear water. A part of Japan paralyzed, and economic consequences arose in different areas, such as the supply of parts for aircraft that was only produced there. Another consequence, much less predictable, was that the German Chancellor called for an exit of Germany from nuclear energy, with dramatic consequences on German energy policy.
We tried to characterize highly disruptive events such as rare black swans, which have a high power to modify reality. The novelty now are the green swans, which originated from climate change. Perhaps the dimensions of primary climatic disasters are not so great; however, the public perception is such that it completely changes the consumer’s preference. You do not want to buy products that pollute cities, which destroy forests, which pollute the sea, and so forth.
Health is certainly another highly disruptive factor. The coronavirus currently has unpredictable impacts, not only in China, but also in other countries where infections are present. Productive chains are placed in check, shortages, severe reduction of trips to countries with confirmed cases. The consequences are not yet calculable; the international stock exchanges reflect the news of the contagion as if they were economic elements of high impact. China is strongly affected; it values the American Dollar, devaluing other currencies and so on.
There is identification of secondary and tertiary side effects in Mega Disruptive Events as being greater than the primary ones. The cause of this is the gigantic interdependence that we have for the globalization of societies, in the economic, technological fields, but even more so in the social and political areas. A topic that has become a Megatrend is migration, for some countries a nightmare, in the analysis of migratory movements; we observe that what forces entire populations to leave their countries are climate change, droughts, endless floods, etc. The second motivation is the economic situation, and then there are armed conflicts. What will immigration cost the developed countries? What about nationalist democracies and policies that force new radical movements?
A trade war between two economic powers suddenly leads to political choices of technological systems like 5G to adopt or not a system.
A new lens is necessary to see these disruptive mega events. And that is to see the secondary and tertiary effects with the same intensity as the primary effects. We realized that the primary effects are the most evident, but they are nowhere near as virulent and harmful as the secondary and tertiary ones. We invest little in evaluations of this type, and the surprises are always greater.
Disruptive Mega Event Assessment with methodologies that study secondary and tertiary side effects could help prepare us to visualize the systemic risks we are facing. No one else doubts that global productive concentrations are at risk, much greater than we imagine, knowing that the locations and environments chosen for these productions have brought us incredible productivity, but are subject to interruptions that can collapse companies and economies.
There will be agents other than the rating agencies, audits or risk consultants who will give us assessments of the consistency of these Disruptive Mega Events. Perhaps Multilateral Institutions will be able to aggregate the academy, economy and governments, from various regions, with credible and traceable information, free from local political influence, economic interests, from pressure groups, to seek new and debatable knowledge at regional and local levels, with transparency.
But it seems that we are living in the opposite current, each one protecting their own, without thinking of the greater good, until everyone suffers from the greater evil. It was like that in many of our global disasters. But do we need to get to that point?