The interaction of globalization, technological advancements, and organizational strategy impacts safety, risk, and labor market trends in high-risk industries. Accidents are not only inevitable in complex systems but are often driven by poor strategic decisions and evolving labor market inequalities. To prevent disasters and protect workers, leaders must adopt holistic approaches that address these systemic challenges.

 

High-risk systems are complex

Why are accidents inevitable in complex systems?

In tightly coupled and complex systems—such as those found in nuclear energy, petrochemicals, and aviation—accidents are unavoidable. This is the core of Charles Perrow’s Normal Accident Theory (Perrow, 1984), which describes how interconnected and complex interactions between systems and their environments make complete control impossible. Accidents occur not solely due to human or technical errors but because of the unpredictable ways in which small failures interact and escalate into larger disasters.

 

Globalization and technology influence systemic risks

How does globalization impact high-risk industries?

Globalization has reshaped high-risk industries through decentralization, outsourcing, and financialization, creating vulnerabilities that contribute to large-scale accidents. For instance, BP’s disasters—such as the Texas City refinery explosion and the Deepwater Horizon spill—can be traced to strategic decisions influenced by globalization. Cost-cutting, externalization of services, and reduced internal safety oversight led to weakened accountability and increased risk of failure.

Similarly, digitalization has amplified the complexity of managing these industries, as automation, outsourcing, and reliance on networked systems create new forms of interconnected risks. For example, digital tools introduce cybersecurity threats, while outsourcing critical functions weakens internal control over safety standards.

What are systemic and existential risks? Systemic risks arise from global interdependencies such as financial crises, natural disasters, and infrastructure failures. Compounded by globalization, these risks have ripple effects that spread across industries and geographies.

On the other hand, existential risks—such as ecological catastrophes and the rise of AI—present broader threats to human survival. These risks challenge traditional risk management frameworks and require new strategies for long-term safety and sustainability.

 

The changing nature of work and employment in High-risk industries

How does technological advancement affect the workforce?

The forces of automation and globalization have not only transformed industries but also altered labor markets. Automation has disproportionately impacted medium-skilled jobs, especially in manufacturing, clerical work, and other routine tasks, and this has led to job displacement. Globalization has exacerbated this by outsourcing low-skilled jobs to lower-wage countries; this further deepens inequality in traditional industries.

The rise of flexible work arrangements, including temporary and freelance jobs, has given companies more agility but at the expense of job security for workers. This trend is especially prominent in liberal economies like the U.S. and U.K., where labor market flexibility often comes with reduced protections for workers. In contrast, coordinated market economies, such as Germany and the Netherlands, better protect low-skilled workers from unemployment through social policies and labor protections.

What are the consequences for worker safety and well-being?

Digitalization and flexible work arrangements introduce new risks to worker safety, health, and well-being. The change toward remote work and digital tools can lead to mental health challenges like stress and burnout due to job insecurity and constant connectivity. Additionally, workers in precarious or freelance roles often lack access to essential benefits like healthcare and paid leave, which increases their vulnerability to both physical and mental health risks.

Furthermore, as automation displaces workers, many are forced into lower-paid, more physically demanding jobs, which carry higher risks of injury and long-term health issues. This change calls for stronger workplace regulations and health protections to ensure that digitalization and globalization do not compromise employee well-being.

 

Addressing the Strategic and Systemic Challenges

How can companies and governments prevent accidents and protect workers?

A comprehensive approach is needed to address both the safety risks in high-risk industries and the evolving challenges in the labor market:

-      Leaders must prioritize safety over short-term financial gains in order to ensure that cost-cutting and outsourcing decisions don’t compromise safety standards. This requires better investment in systems, technologies, processes, and resources that organizations put in place to maintain a safe working environment and prevent accidents, and alignment between organizational strategy and safety management.

-      Organizations should adopt a holistic, proactive approach to risk management that includes frequent auditing, organizational learning, and attention to early warning signs. By understanding the systemic nature of risks, companies can prevent minor issues from escalating into major accidents.

- Governments play a critical role in supporting labor market success and safety in high-risk industries. Strategic, long-term policies are necessary to support sectors in adopting new technologies without compromising safety. For example, budget cuts in healthcare have hindered the sector's ability to implement technological advancements, so stable government support is needed to support innovation for working safely.

-      Companies and policymakers must collaborate to provide stronger protections for workers in the face of automation and globalization. This includes ensuring access to healthcare, paid leave, and safety nets for freelance and temporary workers, while also addressing the mental health challenges posed by the digitalized workplace.

 

Conclusion

As high-risk industries become more complex and interconnected through globalization and technological advancement, preventing accidents and ensuring worker safety requires a multi-level approach. Leaders must balance strategic decisions with safety concerns, considering both the systemic risks within their organizations and the broader labor market challenges driven by automation and globalization. By integrating safety into the core of strategic decision-making and advocating for stronger worker protections, companies and governments can deal with rapidly changing situations while minimizing the risks to both systems and individuals.

 

References:

- Dekker, F., Van der Veen, R. (ed.) (2017), Het Midden Weg? Technologische Ontwikkeling, Globalisering, Bedrijfsbeleid en Kansen op de Arbeidsmarkt, Delft: Eburon.

- Le Coze, J.C. (2020), Post Normal Accident: Revisiting Perrow’s Classic, CRC Press.