by Paul Temple

Peter Bernstein, in his book Against the Gods: The Remarkable Story of Risk (Wiley, 1996), argues that risk was the revolutionary idea that defined modernity: “a rational process of risk-taking…provided the missing ingredient that has propelled science and enterprise…[into] our own age” (2). Bernstein argues that an understanding of risk enabled people to think about the future in a new way, and, crucially, to see that they might have some control over it. Tomorrow need not be like today.

I don’t know about you, but when I last completed a risk register entry, it didn’t quite feel as if I was pushing the boundaries of modernity. I always made sure that my entries were completely in the red sectors of the form: high risk of failure with catastrophic consequences and no mitigating actions possible. This was for two reasons: firstly, I thought that it might encourage someone to come and talk to me about the project idea (it never happened); and secondly, that if anything did go badly wrong I could say, “Well, I did warn you…” (through sheer luck, that didn’t happen either).

The problem with box-ticking risk management of this type, as undertaken in universities and I expect most other organisations, was classically identified by Nassim Nicholas Taleb in The Black Swan (Allen Lane, 2007). It is precisely because we can say what we think the risks are going to be that they cease to be risks, or at least become easily-managed ones. Our imaginations are mostly limited to what we have seen going wrong in the past, and we therefore have ideas about fixing things. The truly serious risks, with the potential to destroy organisations or even states (Taleb comes from Lebanon), are those that nobody has thought about – “outside the realm of regular expectations”, as Taleb puts it (xvii) – and therefore won’t be entered on a risk register. When they do come about, though, everyone then says that of course they were obvious and it’s a scandal that they weren’t prepared for. Hence the title: all swans by definition were white, until black swans were discovered, when it became taken for granted that black swans could exist. Taleb presents the 9/11 attacks as a classical black swan event; the 2017 Grenfell Tower fire in London might be another.

The latest figures (2016/17) show that there are about 95,000 students from mainland China studying in the UK, with another 17,000 from Hong Kong. Chinese students are far and away the largest international group, making up about one-third of total non-EU students, and the fastest growing – a 35% increase since 2010/11. Given that they pay fees at a high international level, this must mean that some – many? – universities have become to a significant extent financially dependent on Chinese fees. A friend who teaches a master’s course at an English university has about 100 Chinese students in her group – who will generate an annual fee income of say £1.8m, at minimal marginal cost. Has her university assessed the risk of this income disappearing suddenly as a result of, say, an arbitrary Chinese government policy change? If so, I’m told there are no signs of mitigating actions being planned: on the contrary, the pressure is on to recruit more students from China. At a Scottish university that I’ve heard about, which is probably not untypical, nearly half of its tuition fee income comes from international – largely Chinese – students. Again, the university apparently believes that the risk to be guarded against is one of under-recruitment of these students. It is as if, having half-filled your house with explosives, you decide that the best way to manage the ensuing risk is to pack even more in.

So here we have what is surely a significant risk, with the potential to destabilise whole universities, but which most – all? – of them seem to want to file under “too difficult”. I’m not sure how to classify this risk: it isn’t really a black swan – maybe more of a grey swan, visible yet prone to fade into the background when we can’t decide on quite what to do about it. Meanwhile, the problem keeps moving deeper into the red sector of the risk register. No, I don’t know the answer either. But as with my risk register entries, don’t say you weren’t warned….

SRHE member Paul Temple, Centre for Higher Education Studies, Institute of Education, University College, London.