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The New Risk Analysis

Factoring in cultural dynamics

We live in an interconnected world in which communications technologies give us the ability to (quite literally) see the tsunami travel, or the revolution head toward us; this is a world in which we can forever prepare for what may be coming our way—but in which that very capacity can contribute to a growing awareness of our limitations.  Hence the growing sense of vulnerability.  The world is not necessarily a more dangerous place, but our capacity to engage effectively with the new nature of uncertainty is ebbing.

To deal with this we need to have a better sense of the cultural landscapes in which risks emerge and evolve. This is not just about perceiving risk more accurately, but about coping with change more effectively—finding our footing with a measure of grace, efficiency and agility.  In other words making the most of opportunities.  This goes far beyond the notion of forecasting: in our world it means learning enough about the cultural dynamics around us so that we can negotiate threat but also participate actively when it is to our benefit as well as usefully when we can help.

The diminishing returns of classic risk analysis

Practicing risk analysis is like shining a torch in a dark room.  In a darkness that creates uncertainty we need a powerful source of light to discern the threats or opportunities which we commonly refer to as risk.  Risk, in other words, is uncertainty that can be perceived. But right now our risk analysis is the equivalent of a low-beam, 1950’s flashlight—weak, flickering and undependable.

For all their mathematical sophistication and modelisable parameters, our risk analysis tools are not good enough; they are old-fashioned and unreliable.  Worse, they are of diminishing effectiveness (and certainly of diminishing efficiency) because where we find ourselves feels like both a larger and a more cluttered room with myriad social and political forces (migration, technological innovation, resource depletion) driving and accelerating patterns of change.  This can sometimes make us feel as though our lives are dominated by uncertainty as never before.

Catching up and falling behind

We have come a long way in the past few decades–from an early emphasis in the 1970s on military and security risk, to a shift toward economics in the aftermath of the oil shock of ’73 and recession of the 1970s, to an emphasis on political risk following 1989—followed by a renewed interest in new security risks after 9/11. These shifts are shaped by, and reflect, the evolution of our international system—from the stable world of mutual assured destruction and deterrence characteristic of the cold war, to one increasingly shaped by multi-polarity from 1989 onwards, or even complete fragmentation (from G7, to G8, to G20, to what some have called the G0), in the context of emerging but politically unpredictable new global powers.

Alongside this, our very conception of risk has shifted: from something entirely externally defined, to something contextually and socially constructed—shaped by personal and collective circumstances as well as political and social interests.  And Mary Douglas’ work in the 1980s, turned the actor in all this into less of a hyper-rational decision-maker, to a more social and contextually defined being. Since then we’ve not made much further progress.

Whatever evolution has taken place, we still suffer from a deficit that hampers all of our other efforts: this deficit is a cultural one; a colossal inability – bordering on the wilful – to include culture in our analysis both of risk dynamics and of risk perception. We didn’t foresee, or plan for, the events of 1989; or the financial crisis of 2008; or even the events of the Arab Spring.  Given the size of the investment we make in risk analysis should we not be better at this?

A new understanding of risk: the role of cultural dynamics

Harvard’s Sheila Jasanoff, in a 1999 paper, refers to the ‘songlines of risk’—the deeply held cultural values and beliefs that shape both risk and the perception of risk. But despite such evocative and powerful voices, we don’t allow the cultural values, beliefs, social habits and conventions that are everywhere and make up the ‘dark matter’ of our global reality into our analysis of risk.  As if their very complexity disqualified them from systematic investigation. Yet this knowledge is precisely what we need to harness if we want to be able to understand the choices other people make while continuing to shape our own.  Our failure to rise to this challenge so far has meant that our capacity to deal effectively with risk (understand it and manage it) is stalled.  The analysis is partial and truncated, leaving out—leaving in the dark—the buried motivations, long-held narratives, informal institutions and deeply held beliefs that spur and direct people to action in a world where their sense of collective and personal efficacy is changing and can sometimes be unpredictably effective.

Examples of our short-comings (costly in so many ways) abound — from the local to the international.  Our failure to pay proper attention to cultural and social dynamics in the Middle-East led to a gross under-estimation of civil society’s capabilities in those countries.  Had we paid attention to social networks, informal institutions buried deep within cities, as well as tales of frustration and empowerment, we might have detected the rumblings of revolution, or at least a capacity for it, long ago.  How would this have affected our foreign policy pronouncements? Our pattern of investments? Had we known what a tenuous grip Mubarak had on his people (despite repeated assertions to the contrary and the assumption of his son as successor as late as the autumn of last year), who might we have invested in — both financially and politically?

On a more local scale, looking back to the riots in Bristol around the opening of a Tesco supermarket in April of this year, the analysis of the mobilisation and the evaluation of its meaning and gravity, completely failed to take into account the historical and social traits of an area where this sort of protest has a long and varied history.  Should retailers — and their strategists — ignore such knowledge? As for policy-makers (national and supra-national), what will it take before a textured understanding of the cultural and social dynamics that shape people’s economic and political preferences begins to play a real role in policy-elaboration?

Globalisation — the very word — suggests a levelling, a potential for homogenisation that, though accurate in some respects, relegates culture to the margins. Yet culture is globalization’s delightful and infuriating twin: far from playing the shrinking violet to a homogenising set of global forces, it continues to assert itself in all sorts of unpredictable ways that make the cultural lens a necessary part of any risk analysis and strategic evaluation.

At Counterpoint we work with experts across the globe, and with a powerful lens based on methods drawn from the social sciences and the humanities.  We carry out risk analysis based on the realisation that cultural dynamics need to be factored in, in systematic, sophisticated and powerful ways.

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