extremely unlikely. if any one cell is incapacitated, the likelihood of this undermining the operations of other cells is severely reduced. that, of course, is precisely why al ’ qaeda has chosen this organisational form. merton ( 1973 ). al ’ qaeda is a prime example of modularity and its effects in strengthening systemic resilience. there are many examples from other industries where modularity in organisational structure has been deployed to enhance systemic resilience. computer manufacture is one. during the late 1960s, computers were highly integrated systems. gradually, they evolved into the quintessential modular system of today, with distinct modules ( cpu, hard disk, keyboard ) which were replaceable if they failed without endangering the functioning of the system as a whole. this improved resilience and reliability. in the computing industry, modularity appears to have had an influence on industry structure. since the 1970s, the computer hardware industry has moved from a highly concentrated structure to a much more fragmented one. in 1969, ibm had a market share of over 70 %. by this century, the market share of the largest hardware firm was around a third of that. modularity has meant the computer industry has become less prone to “ too - big - to - fail ” problems. other examples of modularity in organisational structures include : the management of forest fires, which typically involves the introduction of firebreaks to control the spread of fire ; 16 the management of utility services, such as water, gas and electricity, where the network often has built - in latencies and restrictions to avoid overload and contagion ; the management of infectious diseases which these days often involves placing restrictions on travel, either within a country ( as in the case of foot - and - mouth disease in the uk ) or outside of it ( as in the case of h5n1 ) ; 17 the control of computer viruses across the world wide web, which is typically achieved by constructing firewalls which restrict access to local domains ; attempts on the world domino toppling record, which involve arranging the dominos in discrete blocks to minimise the risk of premature cascades. these are all examples where modular structures have been introduced to strengthen system resilience. in all of these cases, policy intervention was required to affect this change in structure. the case for doing so was particularly strong when the risk of viral spread was acute. in some cases, intervention followed specific instances of systemic collapse. the north

real income of households. austria ’ s current account surplus amounted to 0. 3 % of gdp in 2004 and is expected to improve further in the course of this year. mainly on the back of strong exports, austria ’ s gdp grew by 2 % in 2004, thus being clearly higher than in the two previous years but in line with the euro area average. the oenb recently forecast real gdp to grow by 2. 0 % in 2005 and 2. 2 % in the next two years. supported mainly by exports, the second stage of the tax reform also constitutes an important impetus for domestic demand. austria ’ s economy, however, cannot fully withstand the current economic slowdown in the euro area. austria ’ s deficit according to maastricht amounted to 1. 2 % of gdp in 2004, which is considerably less than the euro area average. the 2005 tax reform is expected to raise the deficit to 1. 8 % in 2005. however, austria ’ s most recent stability program sets the target of reaching a balanced budget as well as a debt ratio of below 60 % of gdp by 2008. the stability of the banking sector strengthened further in 2004 and the first quarter of 2005. in march 2005, total assets of the banking sector amounted to 678 billion euro on an unconsolidated basis ( + 3. 9 % qoq ). in other words, total banking sector assets grew by 3. 9 % compared to the fourth quarter of 2004, which is among other things attributable to a rise in international business. the cost - income ratio improved to 64 % on an unconsolidated basis owing to reduced costs and higher income. the unconsolidated operating profit increased in the first quarter of 2005 by 13 % year - on - year to 1. 34 billion euro. the capital ratio, which relates banks ’ capital to their risk - weighted assets, remained well above the minimum requirement and stood at 14. 6 % on an unconsolidated basis, giving austrian banks ample capital buffers in case of stress scenarios. ( year - end 2004 data : consolidated roa 0. 6 %, consolidated capital ratio 12. 2 % ). the insurance industry experienced a positive development in 2004 as well. a total of 52 insurance undertakings ( except small mutual associations ) were operating in austriain 2004. their total assets came to 68 billion euro in 2004, which constitutes an increase of 7 % year on year. their total premium volume