Unknown Unknowns Part 2 - Impact on Average Joe

I remembered an article was published in the Straits Times regarding "unknown unknowns" and I went to find the newspaper clippings that I normally keep if I find them interesting.

On May 24 2007, Barry Desker, the Dean of S.Rajaratnam School of International Studies, Nanyang Technological University actually published a great book review of Seeing the Invisible: National Security Intelligence In an Uncertain Age.

Basically I intend to look for this book and read it myself. The basic take-away is that that asymmetric threats like terrorism (9/11) , disease pandemics (SARS) and natural resource shocks (Opec Crisis 1973) is a disruptive events that can bring about severe impact to not only the countries affected but in fact can become a transnational problem with severe consequences.

Anyway, my thoughts on this is in that such uncertain times, it seems that governments, corporations and big institutions are the only entities that have the resources and financial muscle to build systems or programs like RAHS, Scenario Planning or prediction markets. Prediction markets was mentioned in the book Wisdom of the Crowds by James Surowiecki. HP, Google and Microsoft are some of the companies that are using prediction markets to help them. However mostly, the applications has been on areas of national security or business planning purposes.

But, how about the common people? The man on the street who invests his life savings on stocks, bonds, property, unit trusts and other financial instruments. Also, not to mention the small business entrepreneur whose company who would probably not survive such severe shocks.

What can the common people do to help ensure that they can actually see the invisible threats to their lifetime of work or savings? Right now, I would say the there is nothing that they can possibly do. In the article by Barry Desker, he titled it "Why we must ponder the improbable". In my mind, I think for the average person, it should be titled "How can we (the common people) ponder the improbable?".

During the Asian Financial Crisis of 1997, there were numerous newspaper reports of rich multi-millionaires falling victim to the meltdown of the markets. I cannot remember reading about housewives, working professionals or retirees that got severely burnt or possibly bankrupt through their own follies. But definitely, I would think the numbers are substantial throughout Asia and the rest of the world. Subsequently, I would think the bursting of the dot.com bubble in 2000 produced many more of such personal disasters.

Alan Greenspan would called this phenomena irrational exuberance in 1996 for the dot.com bubbles and the stock market slumps. But what gave him the insight or ability to see this would be probably he had all the resources that Federal Reserve Bank can provide and not to mention his own unique abilities.

But what can average Mr. Joe do?

Of course, to be able to appreciate such improbable scenarios, Joe would need to be fairly well-educated to understand the complexities and challenges. He would certainly also need to be reasonably well-read, able to collate, analyze, interpret various sources of information and make a conscious decision on what to do.

The problem lies on the fact that the Joe lack the necessary tools and knowledge (software, formal methods or techniques) to overcome the "how to ponder the improbable" question.

I think the way to go is through the use of open source software for prediction markets or the mass collaboration between like-minded individuals interested in such matters forming themselves into forums, online communities, wikis, and practically sharing of good knowledge. In another words, applying the concepts that are being proposed by the book Wikinomics.

Also, I think the Cognitive Edge methods which the company had released under Creative Commons license is open for all is a great resource although I must admit I had not given enough time or effort to understand the material there. Dave Snowden also gently reminded me in my previous post that Cognitive Edge now offers the use of the Sensemaker suite of software tools for employment of their methods.

I had glimpse of what DIANE by the Arlington Institute looks like and I would definitely love to evaluate a demo copy of the Sensemaker software, but I am not sure whether Dave or Cognitive Edge will release them under such terms.

So, I checked from its website that cites "while methods are open sourced, revenue generated to support the network through the development of software and the sale of software licenses and services". Maybe, I would need to be an accredited practitioner. Or maybe it will great to just let everyone see some screenshots of its capabilities.

Back to the solution to the question I posed earlier. In all true sense, it will take some ingenuity and commitment on the part of the community to able to muster enough resources and capability to be able to ponder the improbable unknown unknowns.

We will probably will never know how successful systems like RAHS or prediction markets run by corporations as they remain classified and confidential; which is why I made the statement of "That is still an unknown unknown and only when we know what can be known, therefore we cannot possibly know" in my previous post.

I do not think any government of the day or any corporation would release such information as it may impact them in certain ways. Let's say terrorists or competitors got wind of how their systems or programs are working; they would probably be able to circumvent the loopholes and probably succeed in their actions.

Maybe someday it will become a reality that Joe would be able to connect the dots possibly using the above mentioned solutions and be less impacted by the 9/11s, Oil Shocks, SARS, Financial Crisises and Stock Market Crashes that have plagued him and his family for far too long. Let's see.