Anticipating wild cards in world affairs

An article in the latest The Futurist magazine (January-February 2008) summarizes an essay by Peter Schwartz & Doug Randall about wild cards in world affairs. (For futurists, a wild card is something that was thought to be a low-probability, but high-impact, event. Example: the collapse of the Soviet Union.) Some of the “strategic surprises” they see on the horizon that world leaders need to contemplate:

• The breakup of Indonesia
• The collapse of NATO
• A grand European-Russian alliance
• Egypt goes fundamentalist

“The warning signs are there if one’s eyes are open to them,” Schwartz & Randall write. “The world’s business and government leaders will be immeasurably better off if they carefully consider how these scenarios could come to pass and act today to create maneuvering room for the radically different world that these game-changing events could create.”

The Futurist summarized “Ahead of the Curve: Anticipating Strategic Surprise,” by Peter Schwartz & Doug Randall, an essay in Blindside: How to Anticipate Forcing Events and Wild Cards in Global Politics, edited by Francis Fukuyama (Brookings Institution, 2007).

College students are taking more foreign language classes

U.S. college students seem to recognize the importance of knowing foreign languages, including Arabic and Chinese, in an era of globalization. The Modern Language Association’s survey of enrollments in languages other than English reports that enrollments expanded by 12.9% since 2002.

The study of the most popular languages — Spanish, French, and German — continues to grow and represents more than 70% of language enrollments. There is growing interest in languages such as Arabic (up 126.5%), Chinese (up 51.0%), and Korean (up 37.1%).

And, as an aside, enrollments in American Sign Language increased nearly 30% from 2002, the association reports.

The fallacy — and cost — of giving quarterly earnings guidance

Many executives believe that the quarterly game of giving Wall Street “earnings guidance” provides various benefits: visibility, reduced stock volatility, better valuations. But thorough research by McKinsey & Co. indicates that the practice doesn’t actually work — there’s no evidence that it produces the expected benefits — but carries its own costs.

The two costs:

• It takes up valuable management time to prepare the guidance reports (i.e., it’s a distraction).
• The practice produces too much emphasis on short-term performance.

In my opinion, that short-term mindset gets in the way of long-term strategic thinking and thwarts important investments in areas such as innovation, human capital, environmental sustainability, safety, and competitive intelligence. This short-term mentality — called “short-termism” — could be the No.1 problem in American business.

Oh, and McKinsey’s researchers found that, when some companies stopped providing the quarterly guidance, there were no dire consequences.

2080: Global warming leads to floods, droughts, agricultural disasters, hunger

An article in The Washington Post describes studies predicting the effects of global warming on agriculture, in the 2080s:

Several recent analyses have concluded that the higher temperatures expected in coming years — along with salt seepage into groundwater as sea levels rise and anticipated increases in flooding and droughts — will disproportionately affect agriculture in the planet’s lower latitudes, where most of the world’s poor live.

India could experience a 40% decline in agricultural productivity as “record heat waves bake its wheat-growing region, placing hundreds of millions of people at the brink of chronic hunger.”

Africa … could experience agricultural downturns of 30%, forcing farmers to abandon traditional crops in favor of more heat-resistant and flood-tolerant ones, such as rice.” Senegal and war-torn Sudan could have a “complete agricultural collapse.”

Scenarios like these — and the recognition that even less-affected countries such as the United States will experience significant regional shifts in growing seasons, forcing new and sometimes disruptive changes in crop choices — are providing the impetus for a new “green revolution.” It is aimed not simply at boosting production, as the first revolution did with fertilizers, but at creating crops that can handle the heat, suck up the salt, not desiccate in a drought and even grow swimmingly while submerged.

Fortunately, research on the new crops is underway, but it’s a race against time.

Top five political issues in the U.S., 2007

Top five political issues in the U.S. (November 2007)

Issues cited as either a first or second priority, by all polled adults (regardless of political party)

1. Iraq (46%)
2. Health care (34%)
3. Jobs/economic growth (27%)
4. Illegal immigration (24%)
5. Terrorism (23%)

————
Source: Wall Street Journal / NBC News telephone poll of 1,509 adults, conducted in early November (reported 19 November 2007). Note: The margin of error is +/- 2.5 percentage points, so the difference between Nos. 4 and 5 is negligible.

Related: Poll: Americans are gloomy about the future