Are Australians more timid, more loath to take risks and consequently,
less likely to advance rapidly as a society, than our forebears? On the
daily evidence of our national media, it would seem so.
Hardly a day passes without some valued service in the community being
withdrawn for lack of insurance cover. Without somebody suing someone over
an unforseen risk. And not a day passes without the real risks escalating
as a result.
report by the Academy of Technological Sciences and Engineering (ATSE)
suggests we are in danger of becoming paralysed by fear. Our risk aversion
may prove the greatest stumbling block to our social, economic and
environmental progress, to our becoming an innovative society.
The implications are serious for the whole community. It is not simply
a matter of lawsuits, insurance cover and regulation, though there is
clear room for improvement in all areas. It is also a question of how, as
a society, we identify, understand, respond to and cope with, risk. At
present we do not do this well.
"No pain, no gain" is a common saying of our athletes and
sportspeople. "No risk, no progress" might be its equivalent
when we come to comprehend and deal with the risks presented by modern
technology and innovation.
Despite our best efforts, new technological developments almost always
entail a measure of unanticipated risk. The problem is that our present
level of risk aversion tends to discourage innovation in Australia by
punishing our creators and developers when risks eventuate. If people can
be sued and otherwise penalised for trying to improve our national health,
wealth and wellbeing, they may think twice about doing so. Or they may
simply go and do it in another, less risk-averse, country.
Our efforts to handle risk sensibly are hampered by five paradoxes:
- Social: we need to take risks to progress, but are becoming more
- Legal: risk-taking requires a logical, precise law of negligence,
but the current law is illogical and imprecise
- Regulatory: our regulation is fragmented and inconsistent, it lags
behind technology. Our regulators are more exposed legally.
- Investment: technological progress requires patient risk-capital.
Our financial markets cannot provide enough.
- Disasters: many avoidable disasters occur in spite of clear
warnings, even in large and respected organisations.
In the case of the law, former Chief Justice Sir Harry Gibbs points out
that judges and the present law of negligence now favour generous handouts
to the plaintiff, often at the expense of justice to the defendant. This
deters those who provide goods and services to the community from taking
otherwise reasonable risks.
In recent years Australia has enjoyed high levels of economic growth by
world standards. To sustain these we have to take risks.
And to take risks, we have to be less timid and uncertain, less
litigious and less eager to punish those who are adventurous, enterprising
For this to happen, however, there must be a fuller dialogue in society
about the sort of risks we are prepared to countenance – and the ones we
are not. The Academy is calling for major consultation between governments
and the community to determine how we can achieve an acceptable risk
profile for our society – one that does not hamper progress, but nor
does it mean progress as the expense of people’s lives or wellbeing.
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