Globalization and global communications, and specifically the internet, have accelerated the process of fragilization. Taleb points out that scientists have long observed that islands tend to have more biological diversity than continents. The reason is that the unhindered access offered by a continent encourages winner-takes-all domination by a few species. The same thing is true in a globalized economy. How does a steel company in France compete with a gargantuan competitor in China?
Taleb advises looking for niche markets where added value counts and the bigger competitors can’t be bothered to interfere. “Globalization is based on specialization,” Taleb warned,”but if the market for your specialization disappears, you are dead.”
The bottom line to all this, Taleb says, is to reduce vulnerability where possible and to emphasize robustness, while always keeping a fall back plan handy. As Taleb sees it, small tends to be robust, while being large can often increase fragility. Taleb’s advice: Put risk management at the center of your business, because what is fragile will ultimately break.
Finally, Taleb suggests that the older generation also has something to offer. A herd of elephants, he notes, respects the older elephants in the group. “The older elephants don’t teach,” he said. “They are the ones who say, ‘no.’ You invest the elders with the power to say, ‘no.’ Negative advice can be vastly more powerful than positive advice. People often don’t understand the value of survival. Simply not blowing up, can make you rich. Especially when others are becoming poor.”