Black Swans
The impact of random events
Nassim Nicholas Taleb reminded us in his book; ‘The Black Swan: The impacts of the highly improbable’ (2007) that before the sighting of the first black swan in Australia, “The world believed that all swans were white, demonstrating the severe limitations of learning from observation or experience and the fragility of our knowledge”. (p.xvii)
Taleb reminds us that random events “explain almost everything in our world” from the success of ideas and religions, to the dynamics of historical events and the elements of individual lives.(p.xviii) He argues that understanding the future demands that we accept that randomness is central and we should focus on significant large events with low predictability and high impact.
Black Swan events in recent memory that have impacted trade, agriculture or the Australian economy include:
|
Fires |
2009 – Black Saturday (VIC) 1997 – Dandenong Bushfire (VIC) 1983 – Ash Wednesday (VIC and SA) |
|
Cyclones |
2006 – Larry (QLD) 1974 – Tracy (NT) 1974 – Wanda (QLD) |
|
Floods |
2009 – South East Queensland 2007 – Hunter Valley (VIC) 1998 – Katherine (NT) |
|
Tsunamis |
2004 – Indian Ocean Tsunami |
|
Terrorist Attacks |
2005 – Bali Suicide Bombings 2002 – Bali Suicide Bombings 2001 – 9/11 World Trade Suicide Attacks (USA) |
|
Epidemics/Pandemics |
2009 – Swine Flue Pandemic 2002-2003 – SARS Pandemic 1997 – Avian Flu Outbreak (Bird Flu) |
|
Economic Meltdowns |
2008 Global Financial Crisis 2000 – DotCom Crash 1998 – Russian Ruble Crisis |
In planning for 2050, some of the more obvious Black Swans gathering on the horizon need to be paramount in our thinking. We need an acute awareness of the impacts of:
|
Black Swan
|
Potential Impact Areas
|
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Climate Change |
Carbon taxation, end of coal industries, move towards nuclear power, move toward solar power, move toward alternative power sources |
|
Political Change |
Environmentally focussed parties, economically focussed parties, minority power movements |
|
Resource ‘takeover’ |
Foreign corporations and sovereign investment powers control on Australian economy |
|
ICT Innovation |
Gesture based computing, workforce productivity and mobility |
|
Industry innovation |
World car produced at $5000, competitive manufacturing and resource supply |
|
APEC/ASEAN Trade Block |
Single currency, competitiveness of Australian exorts |
|
Workforce supply |
Immigration inwards of 11% required to supply current labour force projections (200,000+ people a year) |
|
Aged Poverty |
Housing, Medical and Aged Care expenditure, Human Service Delivery and community development |
|
Civil Unrest |
National security, economic stability, political stability |
|
Epidemics/Pandemics |
Labour force, medical and support services, delivery of human services. |
|
Major electrical grid failure |
Communications, business and financial transactions, business operations, emergency and human services delivery, medical and support services delivery |
|
International migration of illegal immigrants (boat people) |
National security, medical and support services, international relations |
|
Major Terrorist attacks |
National security, medical and support services, international relations, delivery of human services |
|
Implementation of Free Trade Agreements with ASEAN countries, China Japan and India. |
Instability of manufacturing industry, value of Australian Dollar, labour force supply, |
|
Drought |
Agricultural supply to national and international markets, domestic food prices, instability of agricultural industry. |
