The following is an edited version of the Podcast:
Terrorism-Specific Disaster Response Preparedness
How International Collaboration Can Strengthen Disaster Preparedness
Michel-Kerjan: I was going to add to that, when you consider what we call critical infrastructure services, such as transportation, postal operation, water supply, food supply, in the U.S. a large majority of these critical services is owned by the private sector. I’m talking about 80-85% of these critical services being owned by the private sector, so you have a real challenge. … Then, on the private side, it’s a very competitive waltz. If you are not the one to take the lead on that, along with a critical mass of your competitors, you won’t do anything because you don’t want to be the first one to spend a lot of money investing in costly mitigation measures.
Public and Private Sector Partnerships for Disaster Risk Reduction
Knowledge at Wharton: And you have also to [take into account] that most businesses are myopic in a sense because they feel they need to prove return on investment in the next two weeks or two months. Here, however, you are talking about a long-term investment for security measures, so the business model is different as well.
Encouraging Long-Term Investments in Disaster Risk Reduction
Kunreuther: Right, another version, exactly.
Proactive Disaster Risk Reduction Measures
Michel-Kerjan: I amjust going to add, when you have one disaster per decade, that’s one thing, but when you’ve got four hurricanes hitting Florida in 2004, and then three or even four major hurricanes in 2005, just the meaning of what is a disaster — and how you include that disaster preparedness into your public policy or private strategy — becomes one of the important points for decision-makers…. We have a project between Wharton and the World Economic Forum in Davos on global risks. The fact that the World Economic Forum put the question of global risks on the table, on the agenda, for top decision-makers in the world [to discuss], is very, very important, because you integrate that into a new way of thinking about these catastrophes.
Economic Incentives for Disaster Risk Reduction
Building a Culture of Vigilance to Avert and Mitigate Disasters
Knowledge at Wharton: And going back to 9/11 to maybe wrap this up, Howard, you have noted that 9/11 is something that maybe couldn’t have been avoided, but what would have helped to minimize the peripheral damage?