In its article Ten trends for the year ahead, the Financial Times (Weekend edition – 7/8 January) includes “blue birds” which, it proposes, are the antithesis of black swans.
Whilst the concept already existed as a “tail event” to which not much attention was given, Lebanese-American writer Nassim Nicholas Taleb introduced the term black swan for random, unpredictable, and catastrophic events (until Europeans arrived in Australia, they thought that all swans were white – suddenly, this was no longer the case). In his 2007 work The Black Swan, he fiercely criticises risk management in financial services organisations for being unprepared for such events and for being backward-looking (VaR – value at risk – gets an especial pasting). He argues that organisations have to build in anti-fragility (learned resilience) for such events.
The black swan that shot him to fame was the global financial crisis of 2008-12, but his book also refers to another black swan: how, after centuries of getting along, the various communities in his Lebanese homeland suddenly and inexplicably turned on each other, resulting in the Lebanese civil war.
The Financial Times article argues for the blue bird – “a rare, unforeseeable event that brings joy”. It encourages the world to turn its risk radar towards positive shocks as well as negative ones, and by implication to be prepared to exploit them and harvest the benefits.
And what might these blue birds be? Well, peace breaking out in Ukraine might start to reverse the manifold impacts of that military aggression. Or there may be a sudden breakthrough in turquoise hydrogen production – the process of producing hydrogen fuel from natural gas but with a solid carbon by-product that can easily be stored away.
So the message, it seems, is to look out for blue birds. They may appear all of a sudden. Just you wait and see.
Data Sources: The Financial Times, Wikipedia, The Black Swan and Anti-fragile – Nassim Nicholas Taleb