Forum Institutional

What are frontier risks and how can we prepare for them?

With new frontier opportunities come new perils. Image: Loic Leray/Unsplash

Eric Parrado
Founding Curator and Alumni, Santiago Hub, Inter-American Development Bank
Ngaire Woods
Dean, Blavatnik School of Government, University of Oxford
Melinda Kuritzky
Lead, Global Risks and Geopolitical Agenda, World Economic Forum Geneva
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This article is part of: The Jobs Reset Summit

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  • Decisionmakers must widen their field of vision to consider risks that could emerge as humans push new frontiers.
  • These are risks that are characterized by unknown likelihood and/or unknown impacts.
  • Here are five ways leaders can prepare for frontier risks in the future.
  • Read the paper "Building Back Broader: Policy Pathways for a Post-Pandemic Transformation" here.

Space exploration, the development of powerful genetic-editing tools, medical advances that produce effective vaccines, the identification of new species and new technologies driving the Fourth Industrial Revolution are all discoveries and inventions that expand human frontiers.

Yet with new frontier opportunities come new perils. “Frontier risks” are those which could emerge as novel technologies surface, new territories are breached or societal forces shift. They are characterized by unknown likelihood, unknown impacts - or both. Such risks could manifest as an extreme version of a known risk, or as completely new phenomenon, and the onset could be rapid, gradual or non-linear.

Unfortunately, in the post-pandemic recovery process, we do not have the luxury to avoid these frontier risks.

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The rise of frontier risks

Take geoengineering, for instance. Emerging technologies like carbon dioxide removal and solar radiation management could be critical weapons in the fight against climate change. However, they also introduce an array of potential new risks, such as the loss of stratospheric ozone, or the behavior of the Indian monsoon. As scientists have elaborated, solar geoengineering involves “numerous interacting environmental, social, political, and economic factors that can interact in complex, potentially unknowable ways.”

At the communications frontier, online social networks, which have proliferated in the last decade, also bring frontier risks that are not easily measured. Unprecedented levels of global connectivity and communication bring the world closer together. However, the rise of deep fakes, misinformation and disinformation presents the risks of increasing polarization, volatility and even democratic breakdowns.

Frontier risks are thorny to grasp, prepare for and manage. Societies struggle to address even traditional risks. The COVID-19 crisis is a stark example of how easy it is for governments, businesses and societies to ignore “grey rhino” risks: high-likelihood and high-impact risks that manifest after a series of warnings, such as pandemics.

Over the past year, many decisionmakers have struggled to anticipate, prepare for and manage the current crisis, despite deadly epidemics in the recent past. Weakening their capacity have been factors such as individual cognitive biases, organizational blind spots, vague warnings, diffuse accountability and costs that have not been internalized.

Frontier risks amplify the weaknesses of decision-making. It is hard to get decisionmakers to pay attention to behemoth risks with near-certain likelihood; it is even harder when warnings are vague, there are information gaps and cost-benefit analysis breaks down in the face of uncertainty. Yet it is critical for decisionmakers to understand and decide systematically how to address these frontier risks precisely because there is so much uncertainty around how and if they will manifest.

Image: World Economic Forum

How decisionmakers can confront frontier risks

Fortunately, there is a checklist decisionmakers can apply when confronting frontier risks: identify, communicate, manage, finance and cooperate.

First, identify and prioritize frontier risks. For example, leverage the expertise of outside experts to illuminate the types of risks that could be emerging at a particular frontier. On-the-ground workers, too, can often spot subtle issues that may not be visible to more senior decisionmakers.

Second, messaging around frontier risks should be clear, informative and accurate. Leaders across sectors are busy people, and attention is often consumed by immediate challenges. Frontier risk communication should account for this

Third, risk management frameworks within organizations should consider frontier risks. Organizational culture should be conducive to perceiving and preparing for such risks. We know, for example, that organizations that accept change and uncertainty, track and learn from small failures and rely upon front-line local knowledge can achieve dynamic situational awareness that enables better resilience in the face of frontier risks. Equally, we know that proactive structures are required to avoid groupthink, bias, blind spots and diffuse accountability.

Fourth, consider building resilience into financing, for example by retaining national emergency funds and crisis reserves, or engineering choice architecture to ensure good decision-making around frontier risks.

Finally, international cooperation and the search for global solutions can help to manage frontier risks. This is most obvious where global standards and negotiations are needed to manage the risks. For example, nuclear weapons have been managed through international agreements between key countries, as might AI weaponry in the future.

But there is another effect of international cooperation - governments are put under pressure to get their own acts together in international negotiations, gather their own evidence and experts and pay attention to managing the risks that might otherwise be left for another day.

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