Preparedness is based on identifying risk, probability and impact of that risk.
So what do you do when you get conflicting information?
The US Conference Board’s global economic outlook calls into question the “BRICs” miracle (Brazil, Russia, India, China), arguing that the low-hanging fruit from cheap labor and imported technology has already been picked.
The Conference Board’s forecast is starkly at odds with a report by the OECD last week predicting that China would keep growing at 6.6pc until 2030, and India at 6.7pc — propelling the two rising powers to global dominance.
Who do you believe? The growth of the “BRICs” depended on access of exports to the markets of the developed nations of the world. Try to find a developed nation today that does not have economic troubles? It also depended on the largest transfer of intellectual property in the history of the world. At some point in time the BRICs will have to develop their own markets and their own intellectual property.
So who is correct? Or should the question be what the risks with each view are, what is the probability of each risk, and what is the impact of each risk? For each view one can make Key Performance Indicators that one could use to help determine which point of view is becoming fact. Both points of views depend on models and assumptions. And these models and assumptions can be tested over time. This is the key to dealing with uncertainty.