Alex has blogged before about black swans and the human assumption that the unexpected can be predicted by extrapolating from variations in statistics based on past observations. Nassim Taleb argues they can’t. But that hasn’t deterred Oxford Analytica, the consulting firm that draws on a network of over 1,000 senior faculty members at Oxford. The company has developed an Early Warning system to meet exactly these needs, catchily named the ‘Global Stress Points Matrix’. According to OA:
The Global Stress Points Matrix provides a means of identifying and monitoring potential political and economic surprises and threats. These may appear unlikely but would have severe consequences should they occur. It is a disciplined approach for ‘stepping outside conventional wisdom’ and uses Oxford Analytica’s global network of experts to ‘ask the right questions’ and the Oxford Analytica Daily Brief process to monitor developments.
There’s a cool matrix too:
Some of the stress points:
1 CHINA/TAIWAN: Armed hostilities
2 US/IRAN: US strike on Iran
3 INTERNATIONAL: Human avian flu pandemic
4 UNITED STATES: Deep recession
5 INTERNATIONAL: Oil price shock
6 PAKISTAN: State collapse
7 INTERNATIONAL: Return to protectionism
13 SCIENCE/TECHNOLOGY: Increasing climate regulation
14 RUSSIA: Return to regional ascendancy
18 NORTH KOREA: Military conflict
19 NIGERIA: Large-scale disorder in the Delta
21 CENTRAL ASIA: Risk of major disorder
22 BALKANS: Return to serious
If any of this does actually happen don’t say we didn’t warn you….
