Over the decades, we have learned to manage various forms of risk. We manage risks that we can quantify through a combination of diversification and hedging. We manage other forms of risk, principally sovereign risk and event risk, by offloading or sharing it using insurance and joint ventures, and by employing the best on-site intelligence and forecasting available.
There are, however, risks that are best described as “preparing for the wrong world”. For example, your company masters analogue stereo technologies, but the world moves to digital; or you develop full-service travel agency services, but the world moves to online distribution.
