Download "Navigating the big risks"

The speed, scope and depth of the sub-prime credit avalanche, starting from a relatively
obscure pool of US securities and rolling through developed markets, differs from anything that might have been expected a few short decades ago. Indeed, the credit crisis is a perfect example of what makes the networked world so perilous.

As we note in "Signs of Turbulent Times Cross a Range of Threats," pervasive interconnection of markets and people, speed of travel and communications, the seamlessness of cross-border flows all create an environment that allows risks of every sort-from abstract "securities" to actual diseases, to tainted drugs and food products, to computer viruses, to terrorism and failed crops-to cascade beyond the control of any single authority. It's no longer a world in which one can go it alone.

But, as we observe in "The Upside of Down Emerges in Collaboration," this same picture touches the heart of opportunity-and not just the contrarian chance of finding gems amid the current downturn. A globalized world will be buoyed up by means of collaboration- the spirit and practice of mutual self-interest among companies, between the public and private sectors, and across geographies.

One of the more unforeseen risks that have emerged recently, especially for companies who have dedicated much of their energy to expanding operations globally, has come in the form of bottlenecks and disruptions in the supply chain. In "Supply Chain Disruptions" we address this complex puzzle: The very practices that have driven costs out have also opened the door to increased risks with long-lasting consequences.

There's a profound difference between risk and uncertainty, as explained in our story "The Cloud of Uncertainty Can Hobble Decision Making." Indeed, uncertainty is its own risk. Uncertainty freezes us in our tracks, a huge handicap in today's fast-moving, opaque and interdependent world. We discuss the problem of uncertainty with behavioral economist Dan Ariely of Duke University, who offers insights on irrationality in business decision making.