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Ready or Not?

Every organization faces crises. Yet, no organization has the resources to prepare for every eventuality. So, how do you get ready for unforeseeable catastrophes?  strategy+business offers a primer on threat ecosystems and meta-readiness.

In an interview with Yale Insights, Kristel Van der Elst ’02 describes how strategic foresight helps build institutional resilience.

The Coming Climate

Recent events related to climate change have brought into focus the scale of the challenge and the urgency of taking action. Yale economist William Nordhaus was recognized with the Nobel Prize for his studies of the interactions between the environment and the economy. He has long argued for putting a price on carbon. Meanwhile the UN released a report saying that the world needs to take drastic action in the next 12 years to avoid traumatic effects of a warming climate.

In an interview with Yale Insights, Daniel Esty offered reasons for hope, pointing to the many steps that companies, individuals, and local governments are taking to curb climate change—even while the U.S. federal government moves backward.

Creating the Legal Cannabis Industry

Legalized marijuana has the potential to be a transformative new category in consumer goods. Yale SOM alumni are helping to define the sector. Ebele Ifedigbo ’16, co-founder of the Hood Incubator in Oakland, is working to ensure people of color—disproportionately hurt by the war on drugs—benefit as entrepreneurs in the legal arena.  Brendan Kennedy ’05 and Michael Blue ’05 launched Privateer Holdings, a private equity fund with a stake in Tilray, a Canadian cannabis company whose value has rocketed since its IPO. Privateer’s share is worth $12 billion, but Kennedy isn’t aiming to cash out. He told Bloomberg, “I don’t want to get bought by AB-InBev or Diageo, I want to be that company.”

Is There a Bond Bubble?

“The debt market is broadcasting a dangerous message,” writes William Cohan in the New York Times. “Examples of mispriced risk are strewn across the financial landscape.” Quantitative easing supported cheap corporate debt which spurred recovery from the financial crisis, but what’s the mechanism for reverting to the norm? Cohan suggests it could happen through a combination of banks tightening lending standards, investors being more discerning, and regulators exercising vigilance. Or another financial crisis.

Can We Save Retirement?

"The social policy story of the past generation is the shift of economic risk from government and employers onto workers and their families,” Yale’s Jacob Hacker writes in Politico. Few workers have enough retirement savings, and proposed solutions “mostly look like Band-Aids. Save more! Tweak 401(k)s! Instead, what’s needed is a fundamental rebalancing of risk.” Hacker’s solution: Social Security Plus, which would make the 401(k) universal and convert the savings into a lifetime annuity upon retirement.

A World of Walls?

Do things have to get worse for the globalists to get better for everyone else? Key institutions—particularly business and government—advocated for and benefited from globalism, but too many people haven’t seen the upside, according to Ian Bremmer. “For the last several decades, on pretty much every front, these institutions have not delivered on issues that matter to the average person.” He sees the nationalist and populist movements as just the beginning of a reset. “It’s pretty clear that the closed-border view is winning.”

The Impact of Automation

Automation is poised to deliver a deep economic disruption lasting decades and taking millions of jobs, according to a recent batch of studies. Axios offers this historical context. “It took about six decades for U.S. wages to recover after the first industrial age automation of the 1810s. And the agriculture-to-industrial shift of the 20th century lasted four decades.” While the economy will eventually rebalance and create new jobs, they may not be good ones: “Wages for most jobs may be too low to sustain a middle-class lifestyle.”

A Tale of 50 Healthcare Insurance Marketplaces

A natural experiment? A chaotic hodgepodge? It was the best of times, it was the worst of times in the U.S. healthcare insurance market. Some states are rebuilding the policy bulwarks of the semi-dismantled Obamacare. Some states are stripping it further. The New York Times has an overview.

Yale SOM’s Fiona Scott Morton proposes an option for Connecticut that might work elsewhere, too.

Can Businesses Do Healthcare Better?

Last month Amazon, JPMorgan Chase, and Berkshire Hathaway announced plans to create an in-house healthcare service to provide their 1.2 million total employees with “simplified, high-quality, and transparent healthcare at a reasonable cost.” Apple has made a stealth launch of what’s believed to be a similar endeavor. Quartz wonders whether these companies are “growing as impatient as their employees with the state of American healthcare” and simply aiming to control costs—or if these services are intended to allow them to test health products and services that will eventually be sold to the rest of us. 

Whom Do We Trust?

“The United States is enduring an unprecedented crisis of trust,” writes Richard Edelman, summarizing the results of this year’s Edelman Trust Barometer. “The root cause of this fall is the lack of objective facts and rational discourse.” However, trust in one group has inched up: employers. “There’s an interest for businesses to solve larger problems for society,” says Kim Hart of Axios.