Is COVID-19 a black or white swan?

The pandemic threat may have been foreseen, but for many, its enormous acceleration of digitization was not.

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Every decent risk framework had the pandemic threat on its list of possible risk events. So, the coronavirus pandemic can’t be viewed as a black swan event. Or can it?

Most will agree that the risk assessments of the past will have underestimated the risk of the pandemic. Still, it was on the list, and every year, the impact and likelihood were assessed by serious risk managers doing their best to define the appropriate actions. The fact that we all, with few exceptions, may have underestimated the impact is obviously not a reason to define it as a black swan event. Black swan events are events that aren’t foreseen.

But let’s look at it from a different angle.

  • Say, you’re in the printing business. All of a sudden, you find that people working from home don’t need to print. And those same people discover that it’s really not necessary to produce that much paper.
  • Say, you’re in the business of renting out office space. All of a sudden, you start hearing about more and more people working from home – not just now during the pandemic, but permanently or at least a lot more.
  • Say, you’re running an airline, making good money on business people who always had to be at that meeting. These people now find that you can do ten video call a day with people all around the world, without having to leave the house.

Many businesses now find they’re now relying a lot more on software, forcing them to focus on security, reliability, cost, and digitization more than ever before.

So does that mean the coronavirus is a black swan event because these businesses didn’t see it coming? In reality, none of these examples are really new events. The pandemic is just an enormous accelerator. Personally, I really don’t see the use in printing. You just carry stuff around, and that stuff always seems to be someplace else when you need it. We have great technology for that and have for a long time. Still, the coronavirus did accelerate this thought. Same goes for office space; flexibility is something we’d wanted, just now more than ever. Video calls had been around for a long time, but still, the face-to-face meeting was (and is) very persistent. Software assurance has been around for a long time, and it’s great to see it’s now receiving increased focus (that’s something we did see coming).

Maybe the current pandemic isn’t a black swan event. But certainly, it will have consequences for quite a lot of people that had never been thought of before. So, if it turns out to be a white swan, it’s one with very black, sharp teeth[1] biting them pretty hard.

 

[1] Actually, swans don’t have teeth. They attack with their beaks and strong wings. But giving them black wings in this sentence would largely make them black swans after all. Analogy rule #1 proven yet again: at some point, every analogy goes wrong. I hope you still get the point.

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