Systemic Risk

Updated: Oct 28, 2020

Systemic Risk

Systemic Risk is the risk of a breakdown of an entire system rather than simply the failure of any individual part. It is a product of the way the parts act & interact across the whole system to create the emergence of a critical system state and systemic crisis. Systemic risk is mounting due to increased connectivity. The interdependence of massive global networks has caused systemic risk to increase exponentially. Systemic risks take many forms. Financial – as the globalization of markets and complex linkages creates risk of cascading failures. Environmental degradation creates the potential for whole ecosystem collapse and systemic changes in climate. Technological, centralization of data mass automation and the Internet of Things create mounting risk of critical cyberattacks. Sociopolitical with erosion of trust in social institutions stalling political systems and the rise of popularism. Risks are intensifying in scale, scope and frequency but collective capacity to respond appears significantly lacking. Systemic risk where to next?


Systems Innovation

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