Systemic Risks: The New Kid on the Block

Ortwin Renn proposes that societies are good at conventional risk management, which focusses on discrete events like a fire or car accident, but increasingly challenged by systemic risks where a failure in one part of a system quickly spreads to disable the whole system and has ripple effects on others. “It is the totality of the threat, the probability that the entire system can collapse, that distinguishes systemic from other types of risk” (p. 29). Systemic risks stem from the dense interconnectivity and complex, non-linear causal structures of global systems.