What is a Black Swan event?

You’ve probably heard the phrase before – ‘Black Swan’. But what is it?

It is an event that (especially today) you should comprehend, because it could be the one that might ‘bring it all down’…

A Black Swan event:

1. It is a surprise – an aberration – outside of regular expectations.
2. It has severe and extreme impact.

After it has occurred, we tend to explain that it was predictable – but only ‘after the fact’…

You might say that the risk of a Black Swan event becomes much higher as it relates to more complicated systems. The thing is – today’s modern way of life is deeply and utterly dependent upon many, many complicated systems. Never, ever before have so many people had a reliance on so many external (out of their control) dependencies, and never before have we been at so much risk because of it.

A single Black Swan event has the potential to break the system as we know it, and we don’t even know it yet…

Here’s an example:

A number of years ago, the newly designed Qantas Airbus A380, the largest and most modern commercial aircraft in the world, an aircraft designed with multiple redundant control systems with the latest of modern technology almost crashed with 459 people on board due to a ‘Black Swan’ event. A single small part within the massive complex system had catastrophically failed…

The defective part resulted in an oil leak. The leak started a fire. The fire caused an engine to explode. The explosion perforated the wing and control surfaces. Multiple hydraulic systems failed. Multiple fuel tanks were ruptured. Fortunately in this particular case there was a total of 100 years flight experience in the cockpit and they were able to land the massive jetliner. However the result could have turned out much worse…

Just think of the countless hours spent on designing that aircraft and the number of people (the best and brightest in the industry) who were involved. Yet, a single unexpected point of failure nearly brought it all down…

What parallels can we draw from this? What are our vulnerabilities to Black Swan events?

The vulnerabilities cross many areas of technology, infrastructure, supply-chain, economy, our society, our beliefs, and more.

Could a seemingly ‘small’ event be a trigger for bigger ones?

We fool ourselves into thinking that we have it all under control. We think we’re so smart – with so many smart people having designed systems that are so technologically superior (for example) such that at worst we might only see an occasional ‘hiccup’. Right?

Indeed we have designed many technologies and systems which have enabled a massive societal shift, change, (growth?), whereby we are now literally and entirely dependent on them for our survival. What could possibly go wrong?

The more you understand the complex world around you and when you begin to observe world events (or those closer to home) as they may relate to a potential Black Swan, the more you realize the dangers that surround our modern way of life and our very existence.

It’s not ‘just’ technology dependencies and risks, but societal as well. Just look at the societal upheaval going on in the world right now. Look at the extreme level of distrust in government (for example). Look at the strains of immigration. Look at the clash of religions. There are so many societal related risks as well… Could a seemingly small societal event become a Black Swan event that brings it all down?

There’s lots to think about. A point I’m hoping to get across is to expect the unexpected and realize that there are Black Swan events waiting around the corner which will have extreme consequences for us all. All is not what it seems…

Lets hear your opinion of Black Swan events or potential examples thereof?

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