By Michael Hendrix
National Chamber Foundation, U.S. Chamber of Commerce
Critical infrastructures are the veins and arteries carrying the lifeblood of America’s economy and society. This infrastructure encompasses sectors as diverse as energy and health, finance and food, and internet too. Its very ubiquity is its downfall though, as it’s too easy to take its existence for granted. When an unexpected event occurs and disrupts America’s critical infrastructure, as inevitably happens in an uncertain world, we are far too often caught unawares, much to our great cost and chagrin.
In a recent program held by the National Chamber Foundation (NCF), the U.S. Chamber of Commerce’s think tank, Admiral Thad Allen – the hero of post-Katrina/Rita New Orleans – described critical infrastructure as especially susceptible to “Black Swans.” A Black Swan is a high impact, low probability event, something that Nassim Taleb first characterized in his book of the same name. As the world becomes ever more complex and interconnected, we are left with fragile systems susceptible to threats that are only ever clear in hindsight. Just look at any number of recent, unknowable, debilitating events and how they impacted critical infrastructure:
• In 2003, nearly 55 million people went without power throughout New York City and into Canada, bringing commerce to a grinding halt. The cause was chalked up to overgrown trees that touched high tension wires at the moment they experienced an electrical surge.
• A volcanic eruption in Iceland shut down Europe’s airspace for nearly 6 days in 2010. This was the largest disruption to Europe’s airspace since World War II – a region already in the midst of an anemic economic recovery.
• In May 2010, the U.S. stock market dropped by over 600 points in 5 minutes, resulting in catastrophic losses for a few perilous moments. An investigative report filed months later “portrayed a market so fragmented and fragile that a single large trade could send stocks into a sudden spiral.”
While we can’t prepare for the unknown event, we can plan for an unknown event to occur at some point. This is where preparedness comes in. As Admiral Allen said at the NCF program, preparedness is about the “ability to be prepared ahead of time so when something happens, you can work through the process/problem and establish a sense of normalcy.”
The goal with critical infrastructure is to minimize the unexpected risk it faces. Of course, countering risk is costly, but so is risk itself. What might constitute a set of best practices – a sort of Black Swan toolkit? First, there must be national-level support for local-level adaptability. When crises occur, as Admiral Allen observed, you want leaders on the ground with the necessary resources and flexibility to parry the unexpected.
Second, you want to conduct constant risk assessments using counterfactual reasoning, challenging assumptions about the state of the world.
Finally, as Admiral Allen noted, when preparing and responding to challenges, the public sector should partner with all key stakeholders, especially the private sector.
What’s so critical about critical infrastructure isn’t so much that it exists, but what our response is when its existence is challenged.
Michael Hendrix is a writer for the National Chamber Foundation, the U.S. Chamber of Commerce’s think tank, which is dedicated to identifying and fostering public debate on emerging critical issues.
This piece was posted on the National Chamber Foundation blog.