This was an internship application essay I wrote quite recently. We had to choose one of three questions and I chose "What are Black Swan events, and how can Singapore prepare and mitigate such crises?". Why? Because "Black Swan" reminded me of the movie starring Natalie Portman. Anyway, I only realised when publishing this here that I misread the instructions and wrote an essay instead of a literature review. Oh well, we live and learn right?
In his 2007 best seller, Nassim Taleb describes a black swan as a highly improbable event with three main characteristics: it is unpredictable, it has severe consequences, and after the fact, we come up with reasons that make the event seem less random than it was. The 9/11 terrorist attacks, the 2003 SARS crisis and the 2007 sub-prime mortgage crisis are all considered to be black swans. While some black swans are beneficial to society, like the massive success of Google, it is more crucial for Singapore to be able to efficiently deal with negative black swans and its consequent damages, to ensure the survival of our economy and the well-being of our people. Based on the current literature, there is an overall strategy we can implement to prepare for and mitigate such crises.
This strategy is to operate in a “safe-fail” mode instead of a “fail-safe” one (Ho, 2008). The statistical improbability of black swans implies that it is impossible to know all the factors that lead to such events to create effective solutions for the problems that result from them. This does not mean we should be discouraged by the lack of information available. Instead, we need to adopt a mindset that allows us to “probe, sense patterns” and “act, even in the absence of complete information” (Ho, 2008). No plan is a hundred percent “fail-safe” but in this case, we need to become more comfortable with an even lower threshold of certainty when planning and taking action. This may result in more failures, which comes with a negative connotation in our society, but we should be assured that we will gain valuable insights during these learning experiences.
Under the same “safe-fail” mentality, we also have to overcome our natural tendency to disregard improbable possibilities (within reason) in favour of allocating resources to addressing issues that we know more about. It is better to have a plan, then change and adapt it where necessary to suit the situation when it comes, rather than to have no plan at all. This ties in to the importance of distinguishing between “known unknowns” and “unknown unknowns”, terms popularised by Donald Rumsfeld, then US Secretary of State, in his 2002 speech. One can account for a “known unknown” but not for an “unknown unknown”. Nafday mentions in his 2011 article, that an event categorised as a black swan (unknown unknown) in the public eye, could have been a grey swan (known unknown) among experts. Singapore could perhaps invest more in research in fields previously affected by black swan events to discover “unknown unknowns”, turning them into “known unknowns”, hence keeping us more informed and better prepared.
Currently, Singapore’s Risk Assessment and Horizon Scanning (RAHS) system is essential in attempting to pre-empt and deal with black swans related to national security, especially in maintaining effective communication between the relevant stakeholders (Habegger, 2010). This effort could be expanded to include other potential target areas such as our economy and our environment, to enhance our readiness when responding to crises.
Singapore has already been proven to excel in strategic planning, cases in point: our urban planning system and our education system. However, we can continue to improve our strategic foresight by applying the “safe-fail” mentality and expanding our existing infrastructure. Hopefully, we would then be better equipped to deal with inevitable future black swans.
References
Habegger, B. (2010). Strategic foresight in public policy: Reviewing the experiences of the UK, Singapore, and the Netherlands. Futures, 42(1), 49–58. https://doi.org/10.1016/j.futures.2009.08.002
Ho, P. (2008) Governance at the leading edge: Black swans, wild cards, and wicked problems. Retrieved February 19, 2020, from https://www.csc.gov.sg/articles/governance-at-the-leading-edge-black-swans-wild-cards-and-wicked-problems
Nafday, A. M. (2011). Consequence-based structural design approach for black swan events. Structural Safety, 33(1), 108–114. https://doi.org/10.1016/j.strusafe.2010.09.003
Taleb, N. N. (2007) The Black Swan: The impact of the highly improbable. Random House, New York, NY.
Cover image from here.