"No-Regret"-Solution in uncertain, complex Times

Latest climate change and Covid-19 pandemic undoubtedly show that the future is characterized by uncertainty and complexity. Agile, sustainable solutions in all areas of life are necessary to meet these challenges. Emerging technologies - particularly digital or biological technologies - offer new opportunities, but add additional complexity and uncertainty as well.

What does this mean for the design of technical systems (for example manufacturing processes or global supply chains)?

Currently technical systems are mainly designed to meet profitability goals. This “one-dimensional” approach generally assumes steady growth, unlimited raw material supply and a stable environment neglecting future risks such as social inequality, climate change and pandemics.

The design of technical systems has to aim at agile, sustainable solutions that can handle the challenges of an unpredictable, uncertain and complex future. Which strategic approach will lead to flexible and sustainable technical systems?

Agile, sustainable solutions require a “no-regret”- strategy. This strategy approach balances sustainability  and profitability. “No-regret”- strategies add risk management to profit maximization indispensable in times of uncertainty and complexity.

A conventional, “one-dimensional” design of technical systems leads to solutions that perform well in the future scenario they are designed for, but fail badly in an unexpected future scenario. In contrast, a “no-regret”- design is a design that performs sustainable and agile in different scenarios of an uncertain and complex future. Agility and Sustainability, however, comes not for free, but the extra investment is a worthwhile insurance policy.

For example, conventional manufacturing design led to large-scale processes and plants performing excellent in a world of economic growth and globalization, but failing badly in times of new tariffs or covid-19.

Decentralized modular processes and production facilities represent a “no-regret” - design. Modular plants distributed globally and supported by smart supply networks promise a significant better performance than the existing dinosaur systems, when covid-19 severely restricts global trade.