Brian Arthur on Fundamental Uncertainty: Why Efficiency Fails and Resilience Wins in an Unpredictable World

Every so often, a thinker captures the underlying shifts of an era with precision. W. Brian Arthur, one of the founding voices behind complexity economics, has done exactly that in a recent talk on the nature of risk, uncertainty, and systemic fragility. His central claim is as unsettling as it is clarifying: we are no longer operating within a world of normal economic fluctuations or manageable risk. We have crossed a threshold into a state of what he calls fundamental uncertainty—a condition in which traditional models and forecasting tools no longer help us make sense of what comes next.

Arthur puts it plainly: “We no longer know what arrangements we can fully trust without something going wrong. We’ve lost the feeling of standing on solid ground.” That line lingered with me. It describes not just the fragility of institutions, but the psychological shift taking place beneath the surface. The ground has shifted, and the tools we used to navigate it are out of date.

Traditional economics was built to handle risk—measurable probabilities, controlled variables, linear models. It is good at assigning confidence intervals, calculating downside, and optimising for efficiency. But it breaks down when faced with events that don’t fit the model: pandemics, technological shocks, political ruptures, and ecological tipping points. These are not just statistical outliers. They represent a deeper kind of instability—unknown unknowns for which we have no prior and no playbook.

Arthur calls this shift the movement from risk to fundamental uncertainty. In such a world, the rational actor model begins to fail, because the assumptions that once made optimisation strategies viable—predictable supply chains, reliable partners, stable institutions—are no longer guaranteed. The environment is not just more volatile; it is structurally different.

This helps explain why the same practices that once built global empires—optimised logistics, just-in-time manufacturing, offshoring, and relentless cost-cutting—now leave organisations vulnerable. What once looked like smart efficiency now reveals itself as dangerous fragility. Arthur points to Boeing’s 737 Max crisis as a case in point: cost-driven decisions compromised safety, which in turn led to two catastrophic failures, billions in losses, and long-term reputational damage. Optimisation made sense in a world of predictability. But in an unpredictable world, it creates brittleness.

Arthur proposes a different lens. Rather than focusing on efficiency, we need to think in terms of resilience. This doesn’t mean abandoning strategy or discipline. It means building in slack, optionality, and redundancy—not as waste, but as insurance. Systems that survive shocks are those that have buffers, not those that operate at maximum stretch.

Adaptation, Arthur argues, does not happen by default. It requires what he calls a repertoire of responses. That repertoire includes things like modular system design, diverse internal capabilities, backup suppliers, cross-functional teams, and long-term R&D. These aren't reactive tools. They are foundational investments. He draws a powerful analogy from biology: the speed of evolution in a species depends on the diversity of traits it can draw upon. The more varied the options, the faster the adaptation.

One of the clearest real-world examples of this came during the Covid-19 crisis. mRNA vaccine platforms were not born overnight. Their rapid deployment was made possible because the foundational technology had been developed, refined, and quietly tested for years. That prior work became a life-saving response. It was not a matter of luck. It was a matter of preparation.

This preparedness also explains why many countries are now reconsidering the core assumptions of globalisation. The United States is bringing semiconductor production back onshore. Germany is reworking its energy infrastructure. China has adopted a dual circulation model to reduce its reliance on external markets. This is not just nationalism or protectionism. It is a rational response to a world where fragility in one part of the chain can ripple across the entire system. Efficiency is no longer the guiding principle. Reliability and control are beginning to take its place.

Arthur also offers a systemic insight that applies as much to policy and business as it does to personal leadership. In conditions of uncertainty, centralised planning begins to lose its effectiveness. The alternative is local, decentralised experimentation. He describes how China often pilots reforms in individual provinces before rolling them out nationally. This is not ideology—it’s evolutionary logic. It is better to try many small things in parallel, see what works, and then scale selectively. In uncertain times, the best systems are those that allow for variation, feedback, and iteration. Not grand strategies, but portfolios of small bets.

Beneath all these themes is a deeper shift in mental models. The age of prediction is fading. The age of positioning is arriving. What matters now is not guessing right, but being structurally prepared for what cannot be guessed. The goal is not to win one perfect hand, but to stay in the game long enough to learn, adapt, and evolve.

Arthur quotes a Chinese proverb that captures this shift beautifully: “Cross the river by feeling the stones.” This is not about fear. It is about responsiveness. It is about sensing your way forward, step by step, without the illusion that the path is already laid out.

He ends with a reminder that we are not drifting into permanent crisis. We are undergoing a kind of institutional and economic evolution. The old foundations are being re-examined. We are not fully in control—but we are not helpless either. We adapt. We run small experiments. We learn as we go.

If you are building a company, allocating capital, designing systems, or simply trying to navigate the modern world, Arthur’s message is both sobering and hopeful. Efficiency can be dangerous. Resilience is built, not assumed. Redundancy is strength. Prediction is limited. Evolution is real. The map may no longer apply, but a compass—a clear set of values, structures, and adaptive tools—can still guide the way.

For anyone interested in going deeper, Arthur’s talk is well worth seeking out. His book, The Nature of Technology, remains one of the clearest and most insightful guides to understanding how economic and technological systems actually evolve.

We will face more disruptions in the years to come. But if we design and invest with these principles in mind, we’ll be far better placed to meet them—not with fear, but with readiness.

-Komorebi