Uncertainty in Business: A Deeper Dive into Its Meaning and Impact

From a business perspective, uncertainty has a special meaning because businesses need to organize people, finance, and resources, plan for the future, and respond to market competition. If the future is uncertain, how can a business 'fight' and organize people, finance, and resources? Therefore, it is necessary to discuss the concept of uncertainty. I understand the economic meaning of uncertainty, which is to look at the future from the present and determine which events will occur and which events will not. Events can generally be divided into three categories.

The first category of events refers to certain events that will definitely occur. For example, in winter, spring will definitely come. At our latitude, the frozen river will crack in July and August, and the swallows will return. This is a certainty.

The second category of events refers to events that may or may not occur based on the probability of past occurrences. For example, at my age, if I want to buy health insurance, I need to estimate my basic physical condition and give a precise value. The probability of events that may or may not occur can be dealt with through an insurance mechanism.

The third category of events refers to uncertain events that cannot be inferred from past events. For example, when will scientific principles turn into technology? When will technology become a product? When will a product become popular in the market and become a flow of economy? It is impossible to infer these events from past events. This type of event is called an uncertainty event.