Lessons from Technological Crisis Management
Paul Shrivastava, William Gruver, and Matt Statler
Global financial crisis. We consider the antecedent conditions and causes of the crisis, and then examine and apply key lessons from the crisis management literature to reach a deeper understanding of these conditions. On the basis of this deeper understanding, we explore policy implications, including long-term planning for managing the crisis process, regulating risk and leverage, building surveillance systems, improving global communications, and redesigning a new sustainable global economic order. Finally, we offer a series of reflections on how the failure of the imagination can be addressed in the context of technological system design and risk management.
Since September 2008, the financial crisis that began in August 2007 in the subprime mortgage market had spread to all financial markets and engulfed all major economies. Stock markets lost 30 percent to 50 percent of their values. Major economies (e.g., United States, Germany) were formally in recession. National governments were investing trillions of dollars to stabilize markets and unfreeze credit. Within four months of the onset of the crisis, the U.S. government had committed $3.2 trillion, the European Union $2.5 trillion, and China almost $1.0 trillion to market stabilization and economic stimulus measures. But the crisis shows few signs of abatement. Most countries are expecting that their economies will get much worse before they get