A key objective for our research is to develop a holistic analysis of the global threat universe. This has been a vision and objective of the Cambridge Centre for Risk Studies since its inception and the first publication of a Taxonomy of Threats in 2010. Specifically we propose to explore how this toolkit can be used in business risk management through specific use cases developed with our supporters, with the aim of providing global risk management tools that account for all of the perils in the Taxonomy, aimed at financial services, investment management, and corporate risk management.
Project Pandora: building on 'World Cities at Risk'
Project Pandora is a culmination of the 'System Shock' research programme that the Centre for Risk Studies has been pursuing since 2010. The Centre has compiled a compendium of threat maps, analytics and data layers, as a toolkit for assessing international risk of business disruption.
This analysis set consists of a probabilistic event set of over 12,000 catastrophe scenarios representing 20 threats, with potential to cause disruption to economic activity in 300 of the world's most important cities, responsible for half of the world's GDP. The consequences of these events are quantified in terms of their 'GDP@Risk' - a constant metric that can be used to compare and standardise different types of threat. This is provided in a 10-year projection outlook, to provide a planning tool for business risk assessment.
The proposed project will develop a global probabilistic model of the risk of catastrophic disruption to economic activities from all of the major potential threats identified in the Cambridge Centre for Risk Studies Taxonomy of Threats and tracked in the Cambridge Risk Framework Threat Observatory.
In addition to pursuing specific research application areas, we intend to continue developing the Cambridge Risk Framework, allocating resources to enabling the framework, improving methodologies, compiling datasets, developing the research platform and toolkit, and exploring other application areas for the research.
The proposed research will:
- Make the current model and framework more sophisticated by focusing on issues such as multi-city catastrophes, city interconnectivity and secondary "catastronomic" effects, cascading threats, and improvements to economic impact modelling
- Indicate the importance of emerging risks, relative to better-understood risks
- Establish a framework for quantitative and objective tracking of the changing importance of different threats
- Provide insights into the effectiveness of risk mitigation decisions to protect against shocks to revenues, operational disruption and sudden liabilities.
The main project development will take place over two years with the first year concentrating on upgrading the World Cities at Risk methodology to take account of various application areas and use cases, and the second year on implementing tools specific to use cases.
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The Risk Prize
An annual award for the best submission on risk management by a current Masters or PhD student at one of the following University of Cambridge departments.
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