Abiliti: Future Systems explores emerging technologies

Abiliti: Future Systems
Throughout eternity, all that is of like form comes around again –
everything that is the same must return in its own everlasting
cycle.....
• Marcus Aurelius – Emperor of Rome •
Many Economists and Economic Planners have arrived at the same
conclusion - that most organisations have not yet widely adopted
sophisticated Business Intelligence and Analytics systems – let alone
integrated BI / Analytics and “Big Data” outputs into their core Strategic
Planning and Financial Management processes.....

• Abiliti: Origin Automation is part of a global consortium of Digital Technologies Service
Providers and Future Management Strategy Consulting firms for Digital Marketing and
Multi-channel Retail / Cloud Services / Mobile Devices / Big Data / Social Media
• Graham Harris Founder and MD @ Abiliti: Future Systems
– Email: (Office)
– Telephone: (Mobile)
• Nigel Tebbutt 奈杰尔泰巴德
– Future Business Models & Emerging Technologies @ Abiliti: Future Systems
– Telephone: +44 (0) 7832 182595 (Mobile)
– +44 (0) 121 445 5689 (Office)
– Email: Nigel-Tebbutt@hotmail.com (Private)
• Ifor Ffowcs-Williams CEO, Cluster Navigators Ltd & Author, “Cluster Development”
– Address : Nelson 7010, New Zealand (Office)
– Email : e4@clusternavigators.com
Abiliti: Origin Automation Strategic Enterprise Management (SEM) Framework ©
Cluster Theory - Expert Commentary: -

Slow is smooth, smooth is fast.....
.....advances in “Big Data” have lead to a revolution in
Economic Modelling and Enterprise Risk Management –
but it takes both human ingenuity, and time, for Strategic
Economic and Risk Models to develop and mature.....

Financial Technology – Business Categories
Fin Tech – Business Disciplines
Economic Analysis & Econometrics Regime: –
• Economic Planning, Analytics & Optimisation •
• Business Cycles, Patterns and Trends •
• Quantitative and Qualitative Techniques •
• Economic Modelling & Long-range Forecasting •
• Ghost in the Machine - Future Management •
Business Planning and Strategy Regime: –
• Corporate Planning and Financial Analysis •
• Horizon Scanning, Monitoring and Tracking •
• Eltville Model • Three Horizons Framework •
• The “Thinking about the Future” Framework •
Business Programme Management Regime: –
• Organisational Change Framework •
• Business Transformation Framework •
• Project / Programme Management Framework •
Enterprise & Solution Architecture Regime: –
• Business Architecture / Modelling Framework •
• Technology Architecture / Modelling Framework •
Fin Tech – Operational Regimes
Corporate Responsibility Regimes: –
• Business Principles Regime •
• Enterprise Governance Regime •
• Reporting and Controls Regime •
• Enterprise Risk Management Regime •
• Enterprise Performance Management Regime •
Enterprise Risk Frameworks: –
• Systemic Risk • Outsights •
• Operational Risk • COSO •
• Trade Risk (micro-economic) •
• Market Risk (macro-economic) •
Liquidity Risk Frameworks – Capital Adequacy Rules
• Basle II – Banking • Solvency II – Insurance •
Insurance Risk Frameworks: –
• Actuarial Science • Underwriting / Reinsurance Risk •
• Security Risk • Reputational Risk • Data Science •
Reporting and Controls Frameworks: –
• Accounting Standards • GAAP • IFRS •
Enterprise and Business Architecture is a part of Abiliti: Financial Technology (Fin Tech) Training: -

Financial Technology – System Categories
Fin Tech – Core Processing
Retail Banking
• Deposits
• Accounts
• Payments
• Securities • Wealth Management •
Financial Markets
• Trade Desk • Automatic Trading •
• Enterprise Risk Management
• Quantitative (Technical) Analysis
• Financial Market Data Management
• Regulatory and Statutory Compliance
Corporate Banking
• Corporate Finance
• Investment Services
• Asset Portfolio Management
• Merger and Acquisition Services
• Shareholder Registration and Administration
Fin Tech – Shared Services
Enterprise Support Systems (ESS): -
• Planning, Forecasting and Strategic Management
• Enterprise Performance Management
• Human Resources and Talent Management
• Finance & Accounting • Treasury & Settlements
• Enterprise Governance, Reporting and Controls
Business Support Systems (BSS)
• Customer Relationship Management •
• Social Media • BI / Analytics • “Big Data” •
• Mobile Devices and Smart Apps Platforms •
• Multi-channel Digital Self-service Platforms •
Operational Support Systems (OSS)
• Cloud Services
• Desktop Services
• Network Management
• Software Versioning and Control
• Software Distribution Management
Systems and Solution Architecture forms part of Abiliti: Financial Technology (Fin Tech) Training: -

At the very Periphery of Corporate
Vision and Awareness…..
• The Cosmology Revolution – new and exciting advances in Astrophysics and
Cosmology (String Theory and Wave Mechanics) is leading Physicists towards new
questions and answers concerning the make-up of stellar clusters and galaxies, stellar
populations in different types of galaxy, and the relationships between high-stellar
populations and local clusters. What are the implications for galactic star-formation
histories and relative stellar formation times – overall, resolved and unresolved – and
their consequent impact on the evolution of life itself ?.
• The Quantum Revolution – The quantum revolution could turn many ideas of science
fiction into science fact - from meta-materials with mind-boggling properties such as
invisibility, limitless quantum energy via room temperature superconductors an
onwards and upwards to Arthur C Clarke's space elevator. Some scientists even
forecast that in the latter half of the century everybody will have a personal fabricator
that re-arranges molecules to produce everything from almost anything. How
ultimately will we use this gift? Will we have the wisdom to match our mastery of
matter like Solomon? Or will we abuse our technology strength and finally bring down
the temple around our ears like Samson?
• The Nano-Revolution – To meet the challenges in an ever more resource-limited
world, innovation and technology must play an increasing role. Nanotechnology, the
engineering of matter at the atomic scale to create materials with unique properties
and capabilities, will play a significant part in ensuring that risks to critical water
resources for future cities are addressed. Nanotechnology “has the potential to be a
key element in providing effective, environmentally sustainable solutions for supplying
potable water for human use and clean water for agricultural and industrial uses.”

• The Energy Revolution • Oil Shale • Kerogen • Tar Sands • Methane Hydrate • The
Hydrogen Economy • Nuclear Fusion • Every year we consume the quantity of Fossil
Fuel energy which took nature 3 million tears to create. Unsustainable fossil fuel energy
dependency based on Carbon will eventually be replaced by the Hydrogen Economy
and Nuclear Fusion. The conquest of hydrogen technology, the science required to
support a Hydrogen Economy (to free up humanity from energy dependency) and
Nuclear Fusion (to free up explorers from gravity dependency) is the final frontier which,
when crossed, will enable inter-stellar voyages of exploitation across our Galaxy.
• Nuclear Fusion requires the creation and sustained maintenance of the enormous
pressures and temperatures to be found at the Sun’s core This is a most challenging
technology that scientists here on Earth are only now just beginning to explore and
evaluate its extraordinary opportunities. To initiate Nuclear Fusion requires creating the
same conditions right here on Earth that are found the very centre of the Sun. This
means replicating the environment needed to support quantum nuclear processes which
take place at huger temperatures and immense pressures in the Solar core – conditions
extreme enough to overcome the immense nuclear forces which resist the collision and
fusion of two deuterium atoms (heavy hydrogen – one proton and one neutron) to form a
single Helium atom – accompanied by the release of a vast amount of Nuclear energy.

• Renewable Resources • Solar Power • Tidal Power • Hydro-electricity • Wind
Power • The Hydrogen Economy • Nuclear Fusion • Any natural resource is a
renewable resource if it is replenished by natural processes at a rate compatible
with or faster than its rate of consumption by human activity or other natural uses
or attrition. Some renewable resources - solar radiation, tides, hydroelectricity,
wind – can also classified as perpetual resources, in that they can never be
consumed at a rate which is in excess of their long-term availability due to natural
processes of perpetual renewal. The term renewable resource also carries the
implication of prolonged or perpetual sustainability for the absorption, processing or
re-cycling of waste products via natural ecological and environmental processes.
• For the purposes of Nuclear Fission, Thorium may in future replaced enriched
Uranium-235. Thorium is much more abundant, far easier to mine, extract and
process and far less dangerous than Uranium. Thorium is used extensively in
Biomedical procedures, and its radioactive decay products are much more benign.
• Sustainability is a characteristic of a process or mechanism that can be
maintained indefinitely at a certain constant level or state – without showing any
long-term degradation, decline or collapse.. This concept, in its environmental
usage, refers to the potential longevity of vital human ecological support systems -
such as the biosphere, ecology, the environment the and man-made systems of
industry, agronomy, agriculture, forestry, fisheries - and the planet's climate and
natural processes and cycles upon which they all depend.

• Trans-humanism – advocates the ethical use of technology to extend current
human form and function - supporting the use of future science and technology to
enhance the human genome capabilities and capacities in order to overcome
undesirable and unnecessary aspects of the present human condition.
• The Intelligence Revolution – Artificial Intelligence will revolutionise homes,
workplaces and lifestyles. Augmented Reality will create new virtual worlds –
such as the interior of Volcanoes or Nuclear Reactors, the bottom of the Ocean or
the surface of the Moon, Venus or Mars - so realistic they will rival the physical
world. Robots with human-level intelligence may finally become a reality, and at
the ultimate stage of mastery, we'll even be able to merge human capacities with
machine intelligence and attributes – via the man-machine interface.
• The Biotech Revolution – Genome mapping and Genetic Engineering is now
bringing doctors and scientists towards first discovery, and then understanding,
control, and finally mastery of human health and wellbeing. Digital Healthcare
and Genetic Medicine will allow doctors and scientists to positively manage
successful patient outcomes – even over diseases previously considered fatal.
Genetics and biotechnology promise a future of unprecedented health, wellbeing
and longevity. DNA screening could diagnose and gene therapy prevent or cure
many diseases. Thanks to laboratory-grown tissues and organs, the human body
could be repaired as easily as a car, with spare parts readily available to order.
Ultimately, the ageing process itself could ultimately be slowed or even halted.

• Global Massive Change is an evaluation of global capacities and limitations. It
includes both utopian and dystopian views of the emerging world future state, in
which climate, the environment, ecology and even geology are dominated by the
indirect impact of human activity and the direct impact of human manipulation: –
1. Human Impact is now the major factor in climate change, environmental and
ecological degradation.
2. Environmental Degradation - man now moves more rock and earth than do all
of the natural geological processes
3. Ecological Degradation – biological extinction rate - is currently greater than
that of the Permian-Triassic boundary (PTB) extinction event
4. Food, Energy, Water (FEW) Crisis – increasing scarcity of Natural Resources
• Society’s growth-associated impacts on its own ecological and environmental
support systems, for example intensive agriculture causing exhaustion of natural
resources by the Mayan and Khmer cultures, de-forestation and over-grazing
causing catastrophic ecological damage and resulting in climatic change – for
example, the Easter Island culture, the de-population of upland moors and
highlands in Britain from the Iron Age onwards – including the Iron Age retreat
from northern and southern English uplands, the Scottish Highland Clearances
and replacement of subsistence crofting by deer and grouse for hunting and
sheep for wool on major Scottish Highland Estates and the current sub-Saharan
de-forestation and subsequent desertification by semi-nomadic pastoralists

Ghost in the Machine:
Haunted by Randomness
“Time present and time past
Are both perhaps present in time future,
And time future contained in time past
. . . all time is eternally present”
• Time, Eternity, and Immortality in T. S. Eliot's Four Quartets •

• The purpose of a Futures Study Training Module is based on the overarching need to
enable and prepare clients to anticipate, prepare for and manage the future - by guiding them
towards an understanding of how the future might unfold. This involves planning, organising
and running Futures Studies Projects and presenting the results via Workshops, Seminars
and CxO Forums. This means working with key client executives responsible for Stakeholder
Relationships, Communications and Benefits Realisation Strategies - helping to influence and
shape organisational change and driving technology innovation to enable rapid business
transformation, ultimately to facilitate the achievement of stakeholder’s desired Business
Outcomes – plus the scoping, envisioning and designing the Future Systems to support
client objectives – by integrating BI / Analytics and “Big Data” Futures Study and Strategy
Analysis outputs into their core Corporate Planning and Financial Management processes.....
– CxO Forums – executive briefings on new and emerging technologies and trends
– Workshops – discovery workshops to explore future Scenario Planning & Analysis
– Seminars – presents in detail the key Futures Study findings and extrapolations.
– Special Interest Groups (SIGs) – for stakeholder Subject Matter Experts (SMEs)

• This Futures Study Training Module – is designed to provide cross-functional support to
those client stakeholders who are charged by their organisations with thinking about the
future – corporate planners, disaster and contingency management and enterprise risk
research, planning, strategy, analysis and management along with those IT Professionals
responsible for Strategic Enterprise Management (SEM) Frameworks and Systems. The
Futures Study course consists of the following components : -
– Classroom Training – Slide Pack, Handouts, Background Documents, Tests and Exercises.
– Workshop Facilitation – driving and mentoring Futures Studies Workshops.
– Advisory Consulting – advise and inform your Futures Study Programme.
– CxO Forums – executive briefings on new and emerging technologies and trends
– Future Discovery – discovery workshops to explore future Scenario Planning & Analysis
– Seminars – presents in detail the key Futures Study findings and extrapolations.
– Special Interest Groups (SIGs) – for stakeholder Subject Matter Experts (SMEs)
– Resources – access to Think Tanks, NGOs, Government Departments and Academia.
– Gateway to Higher Education – Graduate Courses in Futures Studies @ University of Oxford –
Said Business School and Smith School of Economics and the Environment (SSEE)

• This Slide Pack forms part of a Futures Study Training Module - the purpose of which is to provide
cross-functional support to those client stakeholders who are charged by their organisations with
thinking about the future – corporate planners, disaster and contingency management and enterprise
risk research, planning, strategy, analysis and management along with IT Professionals responsible for
architecting, designing and supporting Strategic Enterprise Management Frameworks and Systems: -
– Finance, Corporate Planners and Strategists – authorise and direct the Futures Study.
– Enterprise Risk Managers, Disaster & Contingency Planners – plan & lead Futures Studies.
– Product Innovation, Research & Development – advise and inform the Futures Study.
– Marketing and Product Engineering – review and mentor the Futures Research Study.
– Economists, Data Scientists and Researchers – undertakes the detailed Research Tasks.
– Research Aggregator – examines hundreds of related Academic Papers, “Big Data” & other
relevant global internet content - looking for hidden or missed findings and extrapolations.
– Author – compiles, documents, edits and publishes the Futures Study Research Findings.
– Business Analysts / Enterprise Architects – provide the link into Business Transformation.
– Technical Designers / Solution Architects – provide the link into Technology Refreshment.

The Management of Uncertainty
A Brief History of Chaos…..
Mechanical Processes –
Thermodynamics (Complexity and Chaos Theory) – governs the behaviour of Systems
Classical Mechanics (Newtonian Physics) – governs the behaviour of all everyday objects
Quantum Mechanics – governs the behaviour of unimaginably small sub-atomic particles
Relativity Theory – governs the behaviour of impossibly super-massive cosmic structures
Wave Mechanics (String Theory) – integrates the behaviour of every size and type of object

Executive Summary - The
Management of Uncertainty
• It has long been recognized that one of the most important competitive factors for any
organization to master is the management of uncertainty. Uncertainty is the major
intangible factor contributing towards the risk of failure in every process, at every level,
in every type of business. The way that we think about the future must mirror how the
future actually unfolds. As we have learned from recent experience, the future is not a
straightforward extrapolation of simple, single-domain trends. We now have to consider
ways in which the possibility of random, chaotic and radically disruptive events may be
factored into enterprise threat assessment and risk management frameworks and
incorporated into decision-making structures and processes.
• Managers and organisations often aim to “stay focused” and maintain a narrow
perspective in dealing with key business issues, challenges and targets. A
concentration of focus may risk overlooking Weak Signals indicating potential issues
and events, agents and catalysts of change. Such Weak Signals – along with their
resultant Wild Card and Black Swan Events - represent early warning of radically
disruptive future global transformations – which are even now taking shape at the very
periphery of corporate awareness, perception and vision – or just beyond.

• There are many kinds of Stochastic or Random processes that impact on every area
of Nature and Human Activity. Randomness can be found in Science and Technology
and in Humanities and the Arts. Random events are taking place almost everywhere
we look – for example from Complex Systems and Chaos Theory to Cosmology and
the distribution and flow of energy and matter in the Universe, from Brownian motion
and quantum theory to fractal branching and linear transformations. There are further
examples – atmospheric turbulence in Weather Systems and Climatology, and system
dependence influencing complex orbital and solar cycles. Other examples include
sequences of Random Events, Weak Signals, Wild Cards and Black Swan Events
occurring in every aspect of Nature and Human Activity – from the Environment and
Ecology - to Politics, Economics and Human Behaviour and in the outcomes of current
and historic wars, campaigns, battles and skirmishes - and much, much more.
• These Stochastic or Random processes are agents of change that may precipitate
global impact-level events which either threaten the very survival of the organisation -
or present novel and unexpected opportunities for expansion and growth. The ability to
include Weak Signals and peripheral vision into the strategy and planning process may
therefore be critical in contributing towards the continued growth, success, wellbeing
and survival of both individuals and organisations at the micro-level – as well as cities,
states and federations at the macro-level - as witnessed in the rise and fall of empires.

Random Processes
• Random Processes may influence many natural and human phenomena, such as: -
– the history of an object
– the outcome of an event
– the execution of a process
• Randomness may be somewhat difficult to demonstrate, as true Randomness in chaotic
system behaviour is not always readily or easily distinguishable from any of the “noise”
that we may find in Complex Systems – such as foreground and background wave
harmonics, resonance and interference. Complex Systems may be influenced by both
internal and external factors which remain hidden – either unrecognised or unknown.
These hidden and unknown factors may exist far beyond our ability to detect them – but
nevertheless, still exert influence. The existence of weak internal or external forces acting
on systems may not be visible to the observer – these subliminal temporal forces can
influence Complex System behaviour in such a way that the presence of imperceptibly tiny
inputs, acting on a system, amplified in effect over many system cycles - are ultimately
able to create massive observable changes to outcomes in complex system behaviour.

• Uncertainty is the outcome of the disruptive effect that chaos and randomness
introduces into our daily lives. Research into stochastic (random) processes
looks towards how we might anticipate, prepare for and manage the chaos and
uncertainty which acts on complex systems – including natural systems such as
Cosmology and Climate, as well as human systems such as Politics and the
Economy - in order that we may anticipate future change and prepare for it…..
• Classical Mechanics (Newtonian Physics)
– Any apparent randomness is as a result of Unknown Forces
• Relativity Theory
– Apparent randomness or asymmetry is as a result of Quantum effects
• Quantum Mechanics
– Every Quantum event is truly and intrinsically both symmetrical and random
• Wave Mechanics (String Theory)
– Any apparent randomness and asymmetry is as a result of Unknown Forces

Domain Scope / Scale Randomness Pioneers
Classical Mechanics
(Newtonian Physics)
Everyday objects Any apparent randomness is as
a result of Unknown Forces
Sir Isaac Newton
Chemistry Molecules Lavoisier
Atomic Theory Atoms Each and every Quantum event
is truly and intrinsically fully
symmetrical and random
Max Plank, Niels Bohr
Quantum Mechanics Sub-atomic particles Erwin Schrodinger ,
Werner Heisenberg,
Paul Dirac,
Richard Feynman
Astronomy Common, Observable
Celestial Objects
Any apparent randomness or
asymmetry may be as a result
of Quantum effects or other
Unknown Forces acting early in
the history of Space-Time
Galileo, Copernicus,
Kepler, Lovell, Hubble
Cosmology Super-massive
Celestial Objects
Hoyle, Ryall, Rees,
Penrose, Bell-Burnell
Relativity Theory The Universe Any apparent randomness or
asymmetry is as a result of
Unknown Forces / Dimensions
Albert Einstein,
Hermann Minkowski,
Stephen Hawking
Wave Mechanics
(String Theory or
Quantum Dynamics)
The Universe,
Membranes and
Hyperspace
Michael Green,
Michio Kaku

– Classical Mechanics (Newtonian Physics) governs the behaviour of everyday objects
– any apparent randomness is as a result of unimaginably small, unobservable and
unmeasurable Unknown Forces - either internal or external - acting upon a System.
– governs the behaviour of unimaginably small objects (fundamental sub-atomic particles)
– all events are truly and intrinsically both symmetrical and random (Hawking Paradox).
– Relativity Theory governs the behaviour of impossibly super-massive cosmic structures
(such as Galaxies and Galactic Clusters) which populate and structure the Universe
– any apparent randomness or asymmetry is as a result of Quantum Effects, Unknown
Forces or Unknown Dimensions acting very early in the history of Universal Space-Time
• Wave Mechanics (String Theory or Quantum Dynamics)
– Wave Mechanics integrates the behaviour of every size and type of physical object
Forces or Unknown Dimensions acting on the Universe, Membranes or in Hyperspace

• The Temporal Wave is a novel and innovative method for Visual Modelling and Exploration of
Geospatial “Big Data” - simultaneously within a Time (history) and Space (geographic) context.
The problems encountered in exploring and analysing vast volumes of spatial–temporal
information in today's data-rich landscape – are becoming increasingly difficult to manage
effectively. In order to overcome the problem of data volume and scale in a Time (history) and
Space (location) context requires not only traditional location–space and attribute–space
analysis common in GIS Mapping and Spatial Analysis - but now with the additional dimension
of time–space analysis. The Temporal Wave supports a new method of Visual Exploration for
Geospatial (location) data within a Temporal (timeline) context.
• This time-visualisation approach integrates Geospatial (location) data within a Temporal
(timeline) data along with data visualisation techniques - thus improving accessibility,
exploration and analysis of the huge amounts of geo-spatial data used to support geo-visual
“Big Data” analytics. The temporal wave combines the strengths of both linear timeline and
cyclical wave-form analysis – and is able to represent data both within a Time (history) and
Space (geographic) context simultaneously – and even at different levels of granularity. Linear
and cyclic trends in space-time data may be represented in combination with other graphic
representations typical for location–space and attribute–space data-types. The Temporal Wave
can be used in roles as a time–space data reference system, as a time–space continuum
representation tool, and as time–space interaction tool.

• Randomness. Neither data-driven nor model-driven macro-economic or micro-economic
models currently available to us today - seem able to deal with the concept or impact of
Random Events (uncertainty). We therefore need to consider and factor in further novel
and disruptive (systemic) approaches which offer us the possibility to manage uncertainty.
We can do this by searching for, detecting and identifying Weak Signals – which are tiny,
unexpected variations or disturbances in system outputs – surprises – predicating the
possible existence of hidden data relationships which are masked or concealed within the
general background system “noise”. Weak Signals are caused by the presence of small
unrecognised or unknown forces acting on the system. Weak Signals in turn may indicate
the possible future appearance of emerging chaotic, and radically disruptive Wild Card or
Black Swan events beginning to form on the detectable Horizon – or even just beyond.
• Random Events must then be factored into Complex Systems Modelling. Complex
Systems interact with unseen forces – which in turn act to inject disorder, randomness,
uncertainty, chaos and disruption. The Global Economy, and other Complex Adaptive
Systems, may in future be considered and modelled successfully as a very large set of
multiple interacting Ordered (Constrained) Complex Systems - each individual System
loosely coupled with all of the others, and every System with its own clear set of rules and
an ordered (restricted) number of elements and classes, relationships and types.

Minkowski Space-time Continuum
• In1907 the German mathematical physicist Hermann Minkowski developed the concept
of a single space-time continuum - which provides a conceptual framework for all the
mathematical proofs used in relativity - including Albert Einstein's general and special
theory of relativity. Minkowski space-time is an integrated and unified four-dimensional
continuum - composed of three Positional Dimensions (Loci or Vectors x, y and z
coordinates) defining Space (vector / position) – which is entirely integrated and wholly
unified with a fourth Temporal Dimension (t coordinate) – defining Time (history).
• Minkowski quickly realised that the preliminary work on relativity theory could best be
explained and understood in a multi-dimensional universe which extended beyond the
three spatial dimensions (x, y and z axes) - to include a temporal dimension (t axis) - as
the foundation of a new, non-Euclidean four-dimensional geometry. Minkowski coupled
the two separate dimensions of Space and Time together to create a unified four-
dimensional Space-Time continuum - which was then employed in his own treatment of
a four-dimensional study of electrodynamics. This study involved a combination of two
previously separate systems – Space (with x, y and z axes) and Time (t axis) – to form
Space-Time (with x, y, z and t axes). He noticed that the invariant interval between
two events shared some of the properties of distance in Euclidean three-dimensional
geometry and formulated this invariant interval as the square root of a sum and
difference of squares of the intervals of both Space and Time.

Minkowski
Space-Time
continuum
• In an attempt to
understand the
previous works of
Lorentz and Einstein,
during 1907 Hermann
Minkowski synthesised
a revolutionary four-
dimensional view of a
single, integrated
space-time continuum.
• Until the development
of Minkowski space-
time continuum - the
three-dimensional
coordinate system
describing Space
(position) in Classical
(Newtonian) physics
and the other universal
dimension, the flow of
Time, were considered
to exist independently.

• Space (position) and Time (history) flow inextricably together in a single direction –
towards the future – just as a river can only flow downhill, towards the sea. Space and
Time can only exist together within a single, unified Space-Time continuum. Without
Space – there can be no Time , and without Time – there can be no Space
• Minkowski space-time is also often referred to as Minkowski space or the Minkowski
universe. . In order to exploit the principles of the Minkowski space-time continuum, this
type of coupling must fully demonstrate that the history of a particle or the
transformation of a process over time is dependent on both its spatial and historical
components. Minkowski space-time is used predominately in the study of relativity,
although it can also be applied to other subjects and fields of human endeavour
involving the coupling of time and spatial vectors –for example, in “Big Data” which is
used for Predictive Analytics, Geospatial Propensity Modelling and Future Analysis. .

• Using this concept, events which are localized in both space and time may be
considered as the analogues of points in three-dimensional geometry. Thus the Time
dimension in the history of a single particle or the timeline of an event in Minkowski
space-time - resembles the arc of a curve in a three-dimensional Space, and is thus
fully dependent on both its spatial and historical components.
• Like Space, Time is a Dimension – but Time only flows in a single direction, as does a
River. Time and Space can only exist together within a single, unified Space-Time
continuum. Without Time – there can be no Space, and without Space – there can be
no Time. Minkowski space-time is also often referred to as Minkowski space or the
Minkowski universe. Minkowski space-time is used predominately in the study of
relativity, although it can also be applied to other subjects involving the coupling of
spatial and temporal vectors – such as Futures Studies. In order to exploit the
Minkowski space-time continuum, this type of coupling must demonstrate that the
history of a particle or the transformation of a process over time is fully dependent
on both Space and Time.

• The three-dimensional coordinate
system describing Space (position) in
Classical (Newtonian) physics along with
the other universal dimension, the flow of
Time (history), were considered to exist
and act entirely independently of each
other - until the synthesis of Space-Time
• During 1907, in an attempt to gain an
understanding of the previous work of
Lorentz and Einstein, the German
Mathematician Hermann Minkowski
developed a four-dimensional view of the
universe as a single, integrated and
unified Space-Time continuum.
• In order to demonstrate the principle
properties of the Minkowski Space-
Time continuum – any type of Spatial
and Temporal coupling must be able to
show over time that the History of a
particle or the Transformation of a
process is fully and entirely dependent
on both its Spatial (positional) and
Temporal (historic) components.

The Flow of Information through Time
• Time Present is always in some way inextricably woven into both Time Past and Time
Future – with the potential, therefore, to give us notice of future random events – before
they actually occur. Chaos Theory suggests that even the most subliminal inputs, so
minute as to be undetectable, may ultimately be amplified over many system cycles – to
grow in influence and effect to trigger dramatic changes in future outcomes. So any
given item of Information or Data (Global Content) may contain faint traces which hold
hints or clues about the outcomes of linked Clusters of Past, Present and Future
Events.
• Every item of Global Content that we find in the Present is somehow connected with
both the Past and the Future. Space-Time is a Dimension – which flows in a single
direction, as does a River. Space-Time, like water diverted along an alternative river
channel, does not flow uniformly – outside of the main channel there could well be
“submerged objects” (random events) that disturb the passage of time, and may
possess the potential capability of creating unforeseen eddies, whirlpools and currents
in the flow of Time (disorder and uncertainty) – which in turn posses the capacity to
generate ripples, and waves (chaos and disruption) – thus changing the course of the
Time-Space continuum. “Weak Signals” are “Ghosts in the Machine” of these
subliminal temporal interactions – with the capability to contain information about future
“Wild card” or “Black Swan” random events.

Space-time Disturbances
• Time, like Water, does not flow uniformly – outside the depths of the main
channel within which Time travels, there may also be submerged objects
(random events) that posses the ability to cause disturbances, eddies and
currents in the flow (disorder and uncertainty) – which in turn have the capacity
to generate ripples, whirlpools and waves (chaos and disruption) that flow
through the Space-Time continuum bringing with it the possibility for change -
thus precipitating novel and unexpected outcomes.
• These unpredictable temporal interactions (random events) may interact with
current and emerging waves, patterns and trends to cause Chaos, Disorder,
Uncertainty and Disruption – which in turn have the capacity tp generate Wild
Card or Black Swan Events – manifestations of randomness that act in such a
way as to prevent Time flowing smoothly and uniformly towards an unerringly
predictable outcome or conclusion. Random Events change the flow of Time –
thus the deflected course taken by Time interacting with Random Events means
that the Future becomes unpredictable. Instead of smooth, linear outcomes – we
experience surprises.

Minkowski
Space-Time
continuum
• Space (position) and
Time (history) flow
inextricably together in
a single direction –
towards the future.
• In order to exploit the
principle properties of
the Minkowski space-
time continuum, any
type of Spatial and
Temporal coupling
must be able to fully
demonstrate that the
History of a particle
or the Transformation
of a process over time
is entirely dependent
on both its spatial and
historical components.

Space-time Continuum –
A Temporal Framework
The Theory of Hyperspace - Prof. Michiu Kaku
• According to this theory, before the Big Bang, our cosmos was actually a
perfect ten-dimensional universe, a world where inter-dimensional travel was
possible. However, this ten-dimensional universe "cracked" in two, creating
two separate universes: a four- and a six- dimensional universe. The universe
in which we live was born in that cosmic cataclysm. Our four-dimensional
universe expanded explosively, while our twin six-dimensional universe
contracted violently, until it shrank to almost infinitesimal size.
• This would explain the origin of the Big Bang. If correct, this theory
demonstrates that the rapid expansion of the universe was just a rather minor
aftershock of a much greater cataclysmic event, the cracking of space and
time itself. The energy that drives the observed expansion of the universe is
then found in the collapse of ten-dimensional space and time. According to
this theory, the distant stars and galaxies are receding from us at astronomical
speeds because of the original collapse of ten-dimensional space and time.
This theory predicts that our universe still has a dwarf twin, a companion
universe containing the residual dimensions, curled up into a small six-
dimensional ball that is too small to be detected or observed.....

Space-time Continuum –
A Temporal Framework
String Theory of Hyperspace - Prof. Michiu Kaku
• Many scientists now believe, although we cannot yet prove it, that the multiversity (multiple
universes) hyperspace which contains our own universe – can exist in up to eleven dimensions.
Think of this hyperspace as a multi-dimensional arena in which there are floating a vast number
of bubbles. The surface membrane of every one of these bubbles represents an entire universe,
so our own universe exists on a single bubble membrane. It’s a three dimensional bubble. This
three dimensional bubble is rapidly expanding – according to the Big Bang theory - sometimes
these bubbles can bump into each other, at other times they could split apart – this is the event
that theoretical cosmologists think caused the Big Bang. So we even have a theory of the origin
of the Big Bang itself. In string theory we can have bubbles consisting of different dimensions.
• The highest stable number of dimension in a universe is 11. Universes containing dimensions
beyond 11 become unstable and collapse. When we attempt to describe the mathematics
behind the theory of a 13-, 15-dimensional universe, those universes are intrinsically unstable
and all of them rapidly collapse down to an 11-dimensional universe. Even in the case of an 11-
dimensionsional universe - bubbles can split apart to become 3-dimensional, 4-dimensional , 5-
dimensional and 6-dimensional universes. These bubbles are membranes, so for short we call
them “branes”. Branes may exist with different numbers of dimensions. If we use P to represent
the total number of dimensions belonging to each bubble or membrane – then they become p-
branes. So a p-brane is simply a universe with variable numbers of dimensions – large numbers
of which are floating in a much larger arena - the hyperspace which we discussed earlier.

The Nature of Uncertainty – Randomness
• Uncertainty is the outcome of the disruptive effect that chaos and randomness
introduces into our daily lives. Research into stochastic (random) processes
looks towards how we might anticipate, prepare for and manage the chaos and
uncertainty which acts on complex systems – including natural systems such as
Cosmology and Climate, as well as human systems such as Politics and the
Economy - in order that we may anticipate future change and prepare for it…..
– Any apparent randomness is as a result of Unknown Forces
– Apparent randomness or asymmetry is as a result of Quantum effects
– Every Quantum event is truly and intrinsically both symmetrical and random
• Wave Mechanics (String Theory)
– Any apparent randomness and asymmetry is as a result of Unknown Forces

Randomness
Domain Scope / Scale Randomness Pioneers
Classical Mechanics
(Newtonian Physics)
Everyday objects Any apparent randomness is as
a result of Unknown Forces
Sir Isaac Newton
Chemistry Molecules Lavoisier, Priestley
Atomic Theory Atoms Each and every Quantum event
is truly and intrinsically fully
Max Plank, Niels Bohr
Quantum Mechanics Sub-atomic particles Erwin Schrodinger ,
Werner Heisenberg,
Paul Dirac,
Richard Feynman
Astronomy Common, Observable
Celestial Objects
Any apparent randomness or
asymmetry may be as a result
of Quantum effects or other
Unknown Forces acting early in
the history of Space-Time
Celestial Objects
Hoyle, Ryall, Rees,
Relativity Theory The Universe Any apparent randomness or
asymmetry is as a result of
Unknown Forces / Dimensions
Albert Einstein,
Hermann Minkowski,
Stephen Hawking
Wave Mechanics
(String Theory or
Quantum Dynamics)
The Universe,
Membranes and
Hyperspace
Michael Green,
Michio Kaku

Space-Time v. Energy-Matter
– Classical Mechanics (Newtonian Physics) governs the behaviour of everyday objects
– any apparent randomness is as a result of unimaginably small, unobservable and
unmeasurable Unknown Forces - either internal or external - acting upon a System.
– governs the behaviour of unimaginably small objects (fundamental sub-atomic particles)
– all events are truly and intrinsically both symmetrical and random (Hawking Paradox).
– Relativity Theory governs the behaviour of impossibly super-massive cosmic structures
(such as Galaxies and Galactic Clusters) which populate and structure the Universe
Forces or Unknown Dimensions acting very early in the history of Universal Space-Time
• Wave Mechanics (String Theory or Quantum Dynamics)
– Wave Mechanics integrates the behaviour of every size and type of physical object
Forces or Unknown Dimensions acting on the Universe, Membranes or in Hyperspace

Randomness
Domain Scope Scale Randomness Pioneers
Classical Mechanics
(Newtonian Physics)
Common, everyday and
local Celestial Objects
1 Solar Mass Apparent randomness is a
result of Unknown Forces
Sir Isaac Newton
Biology Organisms Linnaeus, Darwin, Huxley
Chemistry Molecules Lavoisier, Priestley
Atomic Theory Atoms Max Plank, Niels Bohr
Thermodynamics Energy 10.(34) atoms Newcomen, Trevithick,
Quantum Mechanics Sub-atomic particles 10.(34) atoms Quantum events are truly
and intrinsically both fully
Schrodinger, Heisenberg,
Dirac, Feynman
Geology Earth, Solar System 1 Earth Mass Apparent randomness is a
result of Unknown Forces
Hutton, Lyell, Wagner
Astronomy Observable local and
distant Celestial Objects
10.(24) solar
masses
Any apparent randomness
or asymmetry may be as a
result of Quantum effects or
other Unknown Forces
acting early in the history of
Space-time / Energy-matter
Cosmology Super-massive Celestial
Objects and Structures
10.(34) atoms Hoyle, Ryall, Rees,
Relativity Theory The Universe 10.(34) atoms Einstein, Minkowski,
Stephen Hawking
Wave Mechanics
(String Theory or
Quantum Dynamics)
The Universe,
Membranes and
Hyperspace
10.(34) atoms Randomness or asymmetry
is a result of Unknown
Forces and Dimensions
Michael Green,
Michio Kaku

Wave Mechanics (String Theory)
• By late 1970s, quantum field theory and Einstein's general theory of relativity (classical
theory of gravity) proved to be suitable theoretical frameworks to address many or most of
observed features of our universe, from elementary particles like electrons and protons to
evolution of the universe in the cosmological scale.
• However, there are also many fundamental problems which remain to be solved. Elevating
gravity to quantum level had been one grand unsolved problem since the days of Einstein,
while other smaller but equally mysterious problems, such as how to solve quantum
chromo-dynamics (QCD) why the cosmological constant of our universe is so small
(thought to vanish at some point but later proven otherwise by observation), and whether
properties of black holes are consistent with quantum principle, were abundant as well.
• Now, 30 years since then, many theoretical physicists seem to believe that string theory
did or will offer answers to many such questions. The original idea of string theory that
everything in nature originates from loops or segments of strings moving in the relativistic
way, seemed ludicrous at first. Yet, its unique ability to define a quantum mechanically
consistent gravity is not something that theorists could easily resist. Existence of gravity in
string theory was recognized as early as 1975, which was then elevated to a realistic
computational framework in 1980's, but putting it to actual use was another problem.

• Better understanding and use of string theory became possible through the realization
in the 1990's that there are hidden symmetries, known as "duality." Recently, it has
been shown that a strongly coupled regime of one superstring theory can sometimes be
understood as a weakly coupled regime of another, "dual" superstring theory. Such
relations demonstrated that different models of superstrings are actually different
perturbative realizations of one and the same theory. One ultimate theory, which was
conjectured to contain all superstring theory as special cases, has been named M
theory. Another lesson from these developments in the 1990's is that string theory is not
only made up of open and closed strings, but all kinds of other extended objects which
are postulated to exist in Hyperspace – including D-branes and M-branes.
• Probably the most celebrated example of dualities, found in 1997 and has been
exploited and generalized widely since then, is AdS/CFT. In its most general
reincarnation, this model asserts equivalence between certain pairs of open string
theory and closed string theory. In practice, one actually considers the limiting cases
where the open string side reduces to a strongly coupled gauge field theory and/or the
closed string side reduces to classical gravitational theory.

• The equivalence offers completely new methods for solving many strongly interacting
theories, most notably quantum chromo-dynamics (QCD). The very acute issue of black
hole in quantum gravity was also addressed through these developments, resulting in a
consensus among many theoretical physicists that quantum principle is probably not
destroyed by existence of quantum black holes in string theory. A complete resolution of
the problem, applicable to all type of black holes is, however, still unavailable.
• Pioneers of string theory such as Michael Green and Michio Kaku hoped that they might
be able to "derive" a unique theory of universe where every fundamental law of nature can
be predicted unambiguously and accurately. With better understanding over the last twenty
years, we now begin to realize that this hope was probably mislaid. String theory is far
more than a single unified theory of the universe. It proved to be a new physical modelling
paradigm and framework – even more so than the ubiquitous quantum field theory.
• Whether and how we can describe a new model of the universe within this framework is a
very highly constrained and difficult problem, which still carries significant uncertainty when
compared to conventional model building methods in particle physics and in cosmology.

Space-Time v. Energy-Matter
Domain Object Process Outcome Timeline Size Range
Classical Mechanics
(Newtonian Physics)
Common, Everyday
and Celestial Objects
Motion Change of
Position
4.6 x 10.(12) yr 1 Solar Mass
Biology Organisms Evolution Life and Death 3.7 x 10.(12) yr
Chemistry Molecules Transformation Change in State 1.37 x 10.(13) yr
Atomic Theory Atoms Interaction Change in State 1.37 x (10) 13 yr
Thermodynamics Energy (Entropy and
Enthalpy)
Transformation
and Flow
Change in State 10.(37) yr 10.(34) atoms
Quantum Mechanics Sub-atomic particles Interaction Objects created
and destroyed
10.(37) yr 10.(34) atoms
Geology Earth, Solar System Transformation Change in State
and Position
4.6 x 10.(12) yr 1 Earth Mass
Astronomy Observable Celestial
Objects
Motion Change in State
and Position
1.37 x 10.(13) yr 10.(24) solar
masses
Celestial Objects
Transformation Change in State
and Position
10.(37) yr 10.(34) atoms
Relativity Theory The Universe Interaction Change in State
and Position
10.(37) yr 10.(34) atoms
Wave Mechanics
(String Theory or
Quantum Dynamics)
The Universe,
Membranes and
Hyperspace
Motion, Flow,
Transformation
and Interaction
Objects created
and destroyed,
with change in
State and Position
10.(37) yr 10.(34) atoms

Space-Time Analytics – The Temporal Wave
• The Temporal Wave is a novel and innovative method for Visual Modelling and Exploration of
Time-series Geospatial Data Sets – data with dimensions which exist simultaneously with a Time
(history) and Space (geographic) context. The problems encountered in exploring and analysing
vast volumes of spatial–temporal information in today's data-rich landscape – are becoming
increasingly difficult to manage effectively. In order to overcome the problem of data volume and
scale in a Time (history) and Space (location) context requires not only traditional location–
space and attribute–space analysis common in GIS Mapping and Spatial Analysis - but now with
the additional dimension of time–space analysis. The Temporal Wave supports a new method of
Visual Exploration for Geospatial (location) data within a Temporal (timeline) context.
• This time-visualisation approach integrates Geospatial (location) data within a Temporal
(timeline) dataset - along with data visualisation techniques - thus improving accessibility,
exploration and analysis of the huge amounts of geo-spatial data used to support geo-visual “Big
Data” analytics. The temporal wave combines the strengths of both linear timeline and cyclical
wave-form analysis – and is able to represent data both within a Time (history) and Space
(geographic) context simultaneously – and even at different levels of granularity. Linear and
cyclic trends in space-time data may be represented in combination with other graphic
representations typical for location–space and attribute–space data-types. The Temporal Wave
can be used in roles as a time–space data reference system, as a time–space continuum
representation tool, and as time–space interaction tool.

The Flow of Information through Time
• Time Present is always in some way inextricably woven into both Time Past and Time
Future – with the potential, therefore, to give us notice of future random events – before
they actually occur. Chaos Theory suggests that even the most subliminal inputs, so
minute as to be undetectable, may ultimately be amplified over many system cycles – to
grow in influence and effect to trigger dramatic changes in future outcomes. So any
given item of Information or Data (Global Content) may contain faint traces which hold
hints or clues about the outcomes of linked Clusters of Past, Present and Future Events.
• Every item of Global Content that we find in the Present is somehow connected with both
the Past and the Future. Space-Time is a Dimension – which flows in a single direction,
as does a River. Space-Time, like water diverted along an alternative river channel,
does not flow uniformly – outside of the main channel there could well be “submerged
objects” (random events) that disturb the passage of time, and may possess the potential
capability of creating unforeseen eddies, whirlpools and currents in the flow of Time
(disorder and uncertainty) – which in turn posses the capacity to generate ripples, and
waves (chaos and disruption) – thus changing the course of the Space-Time continuum.
“Weak Signals” are “Ghosts in the Machine” of these subliminal temporal interactions –
with the capability to contain information about future “Wild card” or “Black Swan” random
events.

Temporal Disturbances in the
Space–Time Continuum
• Weak Signals, Strong Signals, Wild Cards and Black Swan Events – are a sequence
of waves linked and integrated in ascending order of magnitude, which have a common
source or origin - either a single Random Event instance or arising from a linked series
of chaotic and disruptive Random Events - an Event Storm. These Random Events
propagate through the space-time continuum as a related and integrated series of waves
with an ascending order of magnitude and impact – the first wave to arrive is the fastest
travelling,- Weak Signals - something like a faint echo of a Random Event which may in
turn be followed in turn by a ripple (Strong Signals) then possibly by a wave (Wild Card)
- which may indicate the unfolding a further increase in magnitude and intensity which
finally arrives catastrophically - something like a tsunami (Black Swan Event).
Sequence of Events - Emerging Waves Stage View of Wave Series Development
1. Random Event 1. Discovery
2. Weak Signals 1.1 Establishment
3. Strong Signals 1.2 Development
4. Wild Cards 2. Growth
5. Black Swan Event 3. Plateau
4. Decline
5. Collapse
5.1 Renewal
5.2 Replacement

Spatial versus Temporal Domains
Spatial Analysis
(Location)
Temporal
Analysis
(History)
Sub-atomic
Phenomena Transitive
Phenomena
Long-lived
Phenomena
Space-Time Continuum
Global
Phenomena Economic Analysis
Cosmic Space-Time
Temporal
Analysis
Earth Sciences
“Goal-seeking” Empirical Research Domains
Applied (Experimental) Science
Classical Mechanics (Newtonian Physics)
Applied mathematics
Chemistry
Engineering
Geography
Geology
Geo-physicsEnvironmental Sciences
Archaeology
Palaeontology
Complex and Chaotic Research Domains
Narrative (Interpretive) Science
Futures Studies
Weather Forecasting
Strategic Foresight
Complex Systems – Chaos Theory
Predictive Analytics
Data Mining“Big Data” Analytics
Climate Change
Statistics
Cluster TheoryParticle Physics
Quantum Mechanics
“Blue Sky” – Pure Research Domains
Pure (Theoretical) Science
Phenomenology
Anthropology and Pre-history
Social Sciences
Sociology
Business Studies / Administration / Strategy
Psychology / Psychiatry / Medicine / Surgery
Behavioural Research Domains
Economics
Life Sciences
HistoryArts LiteratureReligion
Law PhilosophyPolitics
Arts and the Humanities
Biological basis of Behaviour
Biology Ecology
Clinical Trials / Morbidity / Actuarial Science
String Theory
Cosmology
Astronomy
Relativity
Astrophysics
Astrology
Future Management
Pure mathematics
Computational Theory / Information Theory
Taxonomy and Classification
Quantitative Analysis
Universal
Phenomena
Local
Phenomena
Regional
Phenomena
Short-lived
Phenomena
Atomic Space-Time
Micro-
Phenomena

Space-Time Analytics
• 4D Geospatial Analytics is the
profiling and analysis of large
aggregated datasets in order to
determine a ‘natural’ structure of
groupings provides an important
technique for many statistical and
analytic applications.
• Environmental and Demographic
Geospatial Cluster Analysis - on the
basis of profile similarities or
geographic distribution - is a statistical
method whereby no prior assumptions
are made concerning the number of
groups or group hierarchies and
internal structure. Geo-spatial and
geodemographic techniques are
frequently used in order to profile and
segment populations by ‘natural’
groupings - such as common
behavioural traits, Clinical Trial,
Morbidity or Actuarial outcomes - along
with many other shared characteristics
and common factors.....

Space-Time Analytics – London Timeline

Space-Time Analytics – London Timeline
• How did London evolve from its creation as a Roman city in 43AD into the crowded, chaotic
cosmopolitan megacity we see today? What will London look like in the future? The London
Evolution Animation takes a holistic view of what has been constructed in the capital over
different historical periods – what has been lost, what is saved and what will be protected.
• Greater London covers 600 square miles. Up until the 17th century, however, the capital city
was crammed largely into a single square mile which today is marked by the skyscrapers which
are a feature of the financial district of the City. Unlike other historical cities such as Athens or
Rome, with an obvious patchwork of districts from different periods, London's individual
structures scheduled sites and listed buildings are in many cases constructed gradually by parts
assembled during different periods. Researchers who have tried previously to locate and
document archaeological structures and research historic references will know that these
features, when plotted, appear scrambled up like pieces of different jigsaw puzzles – all
scattered across the contemporary London cityscape.
• This visualisation, originally created for the Almost Lost exhibition by the Bartlett Centre for
Advanced Spatial Analysis (CASA), explores the historic evolution of the city by plotting a
timeline of the development of the road network - along with documented buildings and other
features – through 4D geospatial analysis of a vast number of diverse geographic,
archaeological and historic data sets.

SIX VISIONS OF THE FUTURE –
THE ELTVILLE MODEL
There are six viewpoints or lenses from which we may understand the future: -
1. BLUE lenses are for PROBABLISTIC FUTURE – RATIONAL FUTURISTS
2. RED lenses are for FUTURE THREATS – DISRUPTIVE FUTURISTS
3. GREEN lenses are for FUTURE OPPORTUNISTIIES – EVOLUTIONARY FUTURISTS
4. GOLD lenses are for DESIRED FUTURE VISION – GOAL ANALYSTS
5. INDIGO lenses are for STEADY STATE FUTURES – EXTRAPOLATION / PATTERN ANALYSTS
6. The VIOLET lenses are for a DETERMINISITC FUTURE – STRATEGIC POSITIVISTS

• Many of the issues that we encounter in Future Management Studies – from driving
Private-sector strategic management to formulating Government Political, Economic and
Social Policies - result from attempts to integrate multiple viewpoints from different
people. Everybody subconsciously believes that other people thinks about, articulates and
understands the Future Narrative in exactly the same way as they do. Stakeholders often
tend to assume that everyone else is looking through the same ”futures lenses” - which
may lead to misunderstanding, conflict, frustration or failure.
• The Eltville Model consists of a process model that describes six different viewpoints or
perspectives of the future (the “six futures lenses") - as a sequence of mental steps (for
exploration and discovery in a workshop) environment, and a results model, which
captures the results achieved in the process as "thought objects“.
The SIX futures lenses below make it easier to analyse and understand the future: -
5. INDIGO lenses are for STEADY STATE FUTURE – EXTRAPOLATION and PATTERN ANALYSTS
6. VIOLET lenses are for DETERMINISITC FUTURE – STRATEGIC POSITIVISTS
THE ELTVILLE MODEL by Pero Mićić

• The Eltville Model serves as a holistic "cognitive map" for terms such as scenario,
vision, trend, wild card, assumption etc, - which may frequently be used in varying
context in different ways by diverse stakeholders. The terms used in the Eltville
Model are unambiguously defined and semantically related to each other - and are
further based on wide futures phenomenological analysis,.
– The ELTVILLE MODEL helps us all to structure our future scenarios and thoughts
about future outcomes to formulate future strategy in a coherent way without omitting
any important determining factors or neglecting any essential viewpoints.
– The ELTVILLE MODEL helps us to obtain some clarity on the most important Future
Management outcomes, goals and objectives and communicate in a clear narrative
about the future of our market and our companies place in that market.
– The ELTVILLE MODEL guides us to implement Strategy Analysis and Future
Management methods and tools in the areas where they are most effective.
• The Eltville Model is a result of observation and phenomenological analysis of more
than 800 workshops with management teams. It was developed by Pero Mićić and is
now being developed further by the Future management Groupt consultants

• The SIX futures lenses and the resulting "ELTVILLE MODEL" bridges the gap between
strategic management and corporate planning and futures studies - research for creating a
better everyday way of life .
• Using phenomenon-based scenario planning and impact analysis, the ELTVILLE FUTURE
MANAGEMENT! MODEL is proven in more than a thousand projects. Future
Management Group have defined the essential meaning of Future Management terms and
their key application to deliver a cognitive model and a cognitive map from them.
• The ELTVILLE MODEL helps us all to apply the common Strategy Analysis and Strategic
Foresight tools much more effectively within a comprehensive Futures Framework. This
model also provides participants with a road map for thinking and communicating about
the future with your stakeholders and an integrated future-oriented structure for managing
strategy delivery projects.
5. INDIGO lenses are for STEADY STATE FUTURE – EXTRAPOLATION and PATTERN ANALYSTS

• The Eltville Model of Future Management is used by companies and public institutions to
support thinking and communicating about future environmental changes, the early
recognition of future markets, the development of future strategies and the building up of
future competence with a sound system of terms. The Eltville Model provides a
comprehensive and integrated terminology. It links the requirements on scientific future
management with the necessities of a company’s day-to-day business.
• The ELTVILLE MODEL has been developed through futures research in more than a
thousand workshops and projects with governmental and non-profit organizations – as well
as with major corporations around the world, - including BOSCH, Microsoft, BAYER,
AstraZeneca, Roche, Ernst+Young, Ford, Vodafone, EADS and Nestle.
5. INDIGO lenses are for STEADY STATE FUTURE – EXTRAPOLATION / PATTERN ANALYSTS

The Eltville Model – Rational Futurism
1. The ELTVILLE MODEL BLUE lenses are for a PROBABLISTIC FUTURE –
RATIONAL FUTURISM – Rational Futurists believe that the future is, to a large
extent, both unknown and unknowable. Reality is non-liner – that is, chaotic – and
therefore it is impossible to predict the future. With chaos comes the potential for
disruption. Possible and Alternative Futures emerge from the interaction of chaos and
uncertainty amongst the interplay of current trends and emerging factors of change –
presenting an inexorable mixture of challenges and opportunities.
• Probable future outcomes and events may be synthesised and implied via an intuitive
assimilation and cognitive filtering of Weak Signals, inexorable trends, random and
chaotic actions and disruptive Wild Card and Black Swan events. Just as the future
remains uncertain, indeterminate and unpredictable, so it will be volatile and enigmatic
– but it may also be subject to synthesis by man.....
The Probabilistic Future – Synthesis: -
– Rational Futurism
– Weak Signals and Wild Cards
– Complex Systems and Chaos Theory
– Horizon Scanning, Monitoring and Tracking
– Cognitive Filtering and Intuitive Assimilation
– Nominal Group Conferences and Delphi Surveys

The Eltville Model – Disruptive Futurism
2. The ELTVILLE MODEL RED lenses are for FUTURE THREATS – DISRUPTIVE
FUTURISM – Disruptive Futurism is an ongoing forward analysis of the impact of new and
emerging factors of Disruptive Change on Environmental, Political, Economic, Social,
Industrial, Agronomy and Technology and how Disruptive Change is driving Business and
Technology Innovation. Understanding how current patterns, trends and extrapolations
along with emerging agents and catalysts of change interact with chaos, disruption and
uncertainty (Random Events) - to create novel opportunities – as well as posing clear and
present dangers that threaten the status quo of the world as we know it today.....
• The purpose of the “Disruptive Futurist” role is to provide future analysis and strategic
direction to support senior client stakeholders who are charged by their organisations with
thinking about the future. This involves enabling clients to anticipate, prepare for and
manage the future by helping them to understanding how the future might unfold - thus
realising the Stakeholder Strategic Vision and Communications / Benefits Realisation
Strategies. This is achieved by scoping, influencing and shaping client organisational
change and driving technology innovation to enable rapid business transformation.
• Future Threats and Chaos – Disruptive Futurism -
– Risk Management
– Disruptive Change
– Weak Signals and Wild cards
– Black Swan (Random) Events
– Complex Systems and Chaos Theory
– Horizon Scanning, Monitoring and Tracking

The Eltville Model – Evolutionary Futurism
3. In the ELTVILLE MODEL GREEN lenses represent FUTURE OPPORTUNISTIIES
– EVOLUTIONARY FUTURISM – Evolutionists believe that the geological,
ecological and climatic systems interact with human activity to behave as a self-
regulating collection of loosely coupled forces and systems – the Gaia Theory.
Global Massive Change is driven by climatic, geological, biosphere, anthropologic
and geo-political systems dominate at the macro-level – and at the micro-level local
weather, ecology and environmental, social and economic sub-systems prevail.
4. The future will evolve from a series of actions and events which emerge, unfold and
develop – and then plateau, decline and collapse. These actions and events are
essentially natural responses to human impact on ecological and environmental
support systems - creating massive global change through population growth,
environmental degradation and scarcity of natural resources. Over the long term,
global stability and sustainability of those systems will be preserved – at the
expense of world-wide human population levels.
• The Creatable Future – Opportunities: -
– Evolution - Opportunities and Adaptation
– Geological Cycles and Biological Systems
– Social Anthropology and Human Behaviour
– Global Massive Change and Human Impact
– Climatic Studies and Environmental Science
– Population Curves and Growth Limit Analysis

The Eltville Model – Goal Analysis
4. In the ELTVILLE MODEL GOLD lenses stand for our PREFERED and DESIRED
FUTURE VISION – GOAL ANALYSTS believe that the future will be governed by the
orchestrated vision, beliefs, goals and objectives of various influential and well
connected Global Leaders, working with other stakeholders - movers, shakers and
influencers such as the good and the great in Industry, Economics, Politics and
Government, along with other well integrated and highly coordinated individuals from
Academia, Media and Society in general – and realised through the plans and actions
of global and influential organizations, institutions and groups to which they belong.
• The shape of the future may thus be discerned by Goal Analysis and interpretation of
the policies, behaviours and actions of such individuals and of those groups to which
they subscribe and belong.
The Preferred Future – Vision: -
– Goal Analysis
– Value Models and Roadmaps
– Political Science and Policy Studies
– Religious Studies and Future Beliefs
– Peace and Conflict Studies, Military Science
– Leadership Studies and Stakeholder Analysis

The Eltville Model – Extrapolation Analysis
5. In the ELTVILLE MODEL – INDIGO lenses are for EXTRAPOLATION – PATTERN
and TREND ANALYSIS. Extrapolation, Pattern and Trend Analysts believe that the
past is the key to the future-present. The future-present is therefore just a logical
extrapolation, extension and continuum of past events, carried foreword on historic
waves, cycles, patterns and trends.....
• Throughout eternity, all that is of like form comes around again – everything
that is the same must return again in its own everlasting cycle.....
• As the future-present develops and unfolds – it does so as a continuum of time
past, time present and time future – and so eternally perpetuating the eternally
unfolding, extension, replication and preservation of those historic cycles, patterns
and trends that have shaped and influenced actions and events throughout time.
The Probable Future – Assumptions: -
– Patent and Content Analysis
– Causal Layer Analysis (CLA)
– Fisher-Pry and Gompertz Analysis
– Pattern Analysis and Extrapolation
– Technology and Precursor Trend Analysis
– Morphological Matrices and Analogy Analysis

The Eltville Model - Strategic Positivism
6. The ELTVILLE MODEL VIOLET lenses are for STRATEGIC POSITIVISM –
STRATEGIC POSITIVISTS are deterministic, and believe that their future
outcomes, goals and objectives can be determined via Strategic Foresight
and delivered through Future Management – strategy planning, design and
action – so that the attainable future becomes both realistic and achievable.
• The future may develop and unfold so as to comply with our positive vision of
an ideal future – and thus fulfil all of our desired outcomes, goals and
objectives – so that our preferred options may ultimately be realised.
• The Planned Future – Strategy: -
– Linear Systems and Game Theory
– Scenario Planning and Impact Analysis
– Future Landscape Modelling and Terrain Mapping
– Threat Assessment and Risk Management
– Economic Modelling and Financial Analysis
– Strategic Foresight and Future Management

Enterprise Risk Management
Qui ne risque rien n'a rien…..

Threat Analysis, Hazard
Research and Risk Management
The Nature of Uncertainty – Randomness
Thermodynamics (Complexity and Chaos Theory) – governs the behaviour of Systems
randomness is as a result of Unknown Forces.....
Classical Mechanics (Newtonian Physics) – governs the behaviour of everyday objects – any
apparent randomness is as a result of Unknown Forces.....
Quantum Mechanics – governs the behaviour of unimaginably small sub-atomic particles – all
events are truly and intrinsically both symmetrical and random.....
Relativity Theory – governs the behaviour of impossibly super-massive cosmic structures – any
apparent randomness or asymmetry is as a result of Quantum Dynamics.....
Wave Mechanics (String Theory) – integrates the behaviour of every type of object –randomness
and asymmetry is a result of Unknown Forces and Quantum Dynamics.....

• The underlying premise of Enterprise Risk Management is that every enterprise
exists to provide value for its stakeholders. All entities face uncertainty, and the
challenge for management is to determine how much uncertainty to accept as it
strives to grow stakeholder value. Uncertainty presents both risk and opportunity,
with the potential to erode or enhance value. Enterprise Risk Management
enables leadership to deal effectively with uncertainty and its associated risk and
opportunity - enhancing capacity to build sustainable growth and long-term value.
• Enterprise Risk Management value is maximised when management leadership
sets policy, strategy and objectives to strike an optimal balance between growth
and return on investment - with their related goals and risks - deploying resources
efficiently and effectively in pursuit of the enterprise’s desired future outcomes.
• These capabilities inherent in enterprise risk management help the leadership
team to achieve the enterprise’s performance and profitability targets whilst
preventing the loss, attrition or devaluation of enterprise resources – and in so
doing, protecting and preserving corporate assets. Enterprise Risk Management
helps to ensure effective reporting and compliance with laws and regulations, and
helps avoid damage to the enterprise’s reputation - and any consequential losses.
In sum, enterprise risk management helps an enterprise to realise its corporate
plans and business strategies - avoiding pitfalls and surprises along the way.

• Events – Risks and Opportunities. Events can have negative impact, positive
impact, or both. Events with a negative impact represent risks, which can prevent
value creation or erode existing value. Events with positive impact may offset
negative impacts or represent opportunities. Opportunities are the possibility that an
event will occur and positively affect the achievement of objectives, supporting value
creation or preservation. Management channels opportunities back to its strategy or
objective-setting processes, formulating plans to seize the opportunities.
• Enterprise Risk Management deals with risks and opportunities affecting the
process of value creation or preservation – and is described as follows: -
– Enterprise Risk Management is a process, implemented by an enterprise’s
board of directors, leadership, management and other personnel, and is applied
both in a strategy setting and in every operational activity across the entire
enterprise. Enterprise Risk Management is designed to identify potential threat
events that may affect the enterprise, to manage those threats within its risk
appetite and tolerances – and to provide reasonable comfort and assurance
towards the achievement of operational and strategic enterprise objectives.
• This Enterprise Risk Management definition is purposefully broad. It captures key
concepts fundamental to how companies and other organizations manage risk,
providing a basis for application across organizations, industries, and sectors. It
focuses directly on achievement of objectives established by a particular enterprise
and provides a basis for defining enterprise risk management effectiveness.

• This definition reflects fundamental Enterprise Risk Management concepts: -
– A process set or group, ongoing and flowing through an entire enterprise
– Implemented by people at every level within an organisation
– Supported by technology - Enterprise Risk Management Systems
– Developed in a strategy setting, planning, forecasting and implemented by
operational management
– Applied across the whole enterprise, at every segment and unit, and includes
taking an enterprise level portfolio view of risk
– Designed to identify potential events that, if they occur, will affect the enterprise
and to manage risk within its risk appetite
– Able to provide reasonable and acceptable Risk Management assurance to an
enterprise’s senior management and board of directors
– Geared to the achievement of performance objectives in many separate but
related categories
• This definition is purposefully broad. It captures key concepts fundamental to how
companies and other organizations manage risk, providing a basis for application
across organizations, industries, and sectors. It focuses directly on achievement of
objectives established by a particular enterprise and provides a basis for defining
your own organisations specific Enterprise Risk Management Framework.

Primary Risk Functions
• The Primary Risk Functions in large corporations that may participate in an
Enterprise Risk Management programme typically include the following: -
– Strategic planning and forecasting - identifies competitive opportunities and
external threats, along with strategic initiatives to exploit or address them
– Disaster and contingency planning - identifies business continuity issues
– Research and Development - understands core value propositions to ensure
that future product / service development falls within corporate requirements
– Marketing and Product Engineering - understands the target customer to
ensure product / service alignment within customer expectations and needs
– Finance and Accounting - identifies business performance management issues
– Actuarial Services - ensures the proper insurance cover for the organisation
– Treasury - ensures cash-flow is sufficient to meet business needs, whilst
managing risk related to commodity pricing, interest and foreign exchange

– Financial Compliance – follows GAAP / IFRS recommendations and directs
Sarbanes-Oxley Section 302 and 404 assessments, in addition to Basle II /
Solvency II compliance - which identifies financial reporting and disclosure risks.
– Legal Services - manages litigation and analyses emerging government policy,
legislation and regulation that may have future impact upon the organisation
– Regulatory and Statutory Compliance – provides governance and controls,
monitors compliance with standards and initiates money laundering and fraud
investigations - as well as dealing with Reputational Risk issues
– Quality Assurance - verifies operational quality assurance targets are achieved
– Operations Management – ensures that day-to-day operational performance is
on target and that any operational issues are surfaced for resolution
Primary Risk Functions (continued)

– Credit Management - ensures that any credit facilities provided to customers is
appropriate in respect of their Credit History and ability to repay the advance
– Customer Services – manages the customer experience / journey and ensures
that problems are handled promptly and reported to operations for resolution
– Information Technology – follows Clinger-Cohen guidelines for due diligence in
IT Procurement, implements Business Intelligence, “Big Data” Intelligent Agents /
Alerts, Digital Dashboards and Reporting for Risk Controls and maintains Risk
Event Identification / Incident Capture Systems for Risk Monitoring / Reporting
– Internal audit - evaluates Risk Event Identification / Incident Capture and Risk
Controls; directs non-compliance / fraud investigation, monitoring and reporting
– Risk Management – maintains the Enterprise Risk Management Framework ,
audits and evaluates the effectiveness of each of the above risk functions and
recommends any required improvements
Primary Risk Functions (continued)

• What is Risk Management ?
• Enterprise Risk Management is a structured approach to managing uncertainty
through foresight and planning. Any risk is related to a specific threat (or group of
related threats) managed through a sequence of activities using various resources: -
– Risk Research – evaluating / understanding the problem / opportunity domain
– Risk Identification – identifying applicable threats, risk groups, types & events
– Risk Prioritisation – ordering and prioritising relevant threats by risk probability
and magnitude
– Risk Assessment – comparing and balancing the individual threat posed by
each risk item in the ordered and prioritised risk register
– Risk Management Strategies – methods for transferring, avoiding, reducing or
accepting the risk
– Risk Planning – assessing the overall level of threat contained within the
consolidated risk register
– Risk Mitigation – reducing uncertainty through the application of strategic
foresight and future management planning processes

• Risk Management Strategies may include the following: -
– Transferring the risk to another party
– Avoiding the risk
– Reducing the negative effect of the risk
– Accepting part or all of the consequences of a particular risk .
• In an ideal Risk Management Scenario, a prioritisation process ranks those
risks with the greatest potential loss and the greatest probability of occurring to
be handled first - and risks with lower probability of occurrence and lower
consequential losses are then handled in descending order
• In practice this prioritisation process can be very challenging. Comparing and
balancing the overall threat of risks with a high probability of occurrence but
lower loss - versus risks with higher potential loss but lower probability of
occurrence - may lead to misleading results.....

Intangible Risk Management
• Intangible Risk Management hypothesises a different type of threat - a risk that has
a 100% probability of occurring but is ignored by the organization due to an inability
to recognise an unavoidable threat, or the failure to identify an intangible risk: -
– Process-engagement Risk may pose a threat when processes are ineffective,
incomplete or broken and operational procedures are misapplied (or not
applied).
– Knowledge Risk may materialise when insufficient knowledge is available in a
threat domain, or a deficient level of knowledge is applied to a threat situation,.
– Relationship Risk may occur when group dynamics are disrupted, morale
breaks down, or communication, collaboration and team-working become
ineffective.
• Intangible Risk Management allows risk managers to create immediate value from
the identification and reduction of hidden risks that reduce productivity.
• Such Intangible Risks may reduce the productivity of knowledge workers, decrease
cost effectiveness, erode profitability and service and quality whilst compromising
reputation, brand value, market share and earnings.

Opportunity Cost Management
• Risk Management Strategies also face operational difficulties in providing sufficient
enterprise resources or allocating those resources appropriately. This is the concept
of Opportunity Cost and may constitute: -
– Resources denied to risk management that could have been deployed more
profitably on managing and avoiding risk.
– Resources over-expended on risk management that could have been spent
elsewhere in the business on more profitable applications.
• Ideal Risk Management Scenarios minimizes spending whilst maximizing the
reduction of the organisational impact and negative effects of such risks.
– Prioritisation ranks those risks with the greatest potential loss and / or the
greatest probability of occurrence -to be treated first
– Those Risks with lower probability of occurrence and lower consequential losses
are then handled in descending order
– Risk Management seeks to balance and optimise the overall threat impact of
risks with a high probability of occurrence but lower loss -versus risks with
greater potential loss but lower probability of occurrence

• Aligning risk appetite and risk management strategy – Management considers the
enterprise’s capability to absorb risk (risk appetite) in evaluating strategic alternatives,
setting related objectives, and developing mechanisms to manage related risk groups.
• Enhancing risk response decisions – Enterprise Risk Management provides the rigor
to identify and select among alternative risk scenarios and responses –identification and
assessment of threats, risk avoidance, risk reduction, risk sharing and risk acceptance.
• Reducing operational surprises and losses – Entities gain enhanced capability to
identify potential threat events and establish threat responses - reducing their exposure
to surprises and “black swan” events and their associated unplanned costs or losses.
• Identifying and managing multiple and cross-enterprise risks – Every enterprise
faces a myriad of risks affecting different parts of the organization, and Enterprise Risk
Management facilitates effective response to the interrelated impacts, and integrated
management of multiple threat scenarios and exposure to groups of related risks.
• Seizing opportunities – By considering and mitigating a full range of potential threat
events, management is well positioned to identify and proactively realise opportunities.
• Improving deployment of capital – Obtaining robust risk exposure information allows
management to effectively assess overall capital needs and enhance capital allocation.

Risk Clusters and Connectivity
1
2
3
4
5
7
8
6
The above is an illustration of risk relationships - how risk events might be connected. A detailed and
intimate understanding of risk clusters and the connection between risks may help us to understand: -
• What is the relationship between Risks 1 and 8, and what impact do they have on Risks 2 - 7 ?
• Risks 2 - 5 and Risks 6 and 7 occur in clusters – what are the factors influencing these clusters ?
Answering questions such as these allows us to plan our risk management approach and mitigation
strategy – and to decide how to better focus our resources and effort on risk and fraud management.
Claimant 1
Risk Event
Claimant 2
Residence
Vehicle
Risk
Cluster

Risk Clusters and Connectivity
• Aggregated risk includes coincident, related, connected and interconnected risk: -
• Coincident - two or more risks appear simultaneously in the same domain – but
they arise from different triggers (unrelated causal events)
• Related - two more risks materialise in the same domain sharing common risk
features or characteristics (may share a possible hidden common trigger or cause
– and so are candidates for further analysis and investigation)
• Connected - two more risks materialise in the same domain due to the same
trigger (common cause)
• Interconnected - two more risks materialise together in a risk cluster or event
series - the previous (prior) risk event triggering the subsequent (next) risk event
• Aggregated risks may result in a significant cumulative impact - and are therefore
frequently identified incorrectly as Wild-card or Black Swan Events - rather than just
simply as risk clusters or event “storms”.....

Aggregated Risk
ATrigger A
Coincident Risk
BTrigger B
Risk Event
Risk Event
CTrigger
Related Risk
DTrigger
Risk Event
Risk Event
E
Trigger
Connected Risk
Risk Event
Risk EventF
GTrigger
Inter-connected Risk
Risk
Event
Risk
Event
H

Trigger
D
USA Sub-Prime
Mortgage Crisis
Trigger
F
CDO Toxic
Asset Crisis
K
E
Trigger
K
Sovereign
Debt Crisis
B
Trigger
I
Money
Supply
Shock
C
Trigger
H
Financial
Services
Sector
Collapse
D
Trigger
G
L
A
Trigger
J
Credit
Crisis
Global
Recession
Black Swan Events
Definition of a “Black Swan” Event
• A “Black Swan” Event is an event or
occurrence that deviates beyond what is
normally expected of any given situation
and that would be extremely difficult to
predict. The term “Black Swan” was
popularised by Nassim Nicholas Taleb, a
finance professor and former Investment
Fund Manager and Wall Street trader.
• Black Swan Events – are unforeseen,
sudden and extreme change events or
Global-level transformations in either the
military, political, social, economic or
environmental landscape. Black Swan
Events are a complete surprise when
they occur and all feature an inordinately
low probability of occurrence - coupled
with an extraordinarily high impact when
they do happen (Nassim Taleb). “Black Swan” Event Cluster or “Storm”

Market Risk
• MARKET RISK •
Market Risk = Market Sentiment – Actual Results (Reality)
• The two Mood States – “Greed and Fear” are primitive human instincts which, until now,
we've struggled to accurately qualify and quantify. Social Networks, such as Twitter and
Facebook, burst on to the scene five years ago and have since grown into internet giants.
Facebook has over 900 million active members and Twitter over 250 million, with users
posting over 2 billion "tweets“ or messages every week. This provides hugely valuable and
rich insights into how Market Sentiment and Market Risk are impacting on Share Support /
Resistance Price Levels – and so is also a source of real-time data that can be “mined” by
super-fast computers to forecast changes to Commodity Price Curves
• Derwent Capital Markets - the sentiment analysis provider launched by Paul Hawtin in May
2012 following the dissolution of his "Twitter Market Sentiment Fund", sold yesterday to the
highest bidder at the end of a two-week online auction. The winning bid came from a Financial
Technology (Fin Tech) firm, which Hawtin declined to name. Hawtin had set a guide price of
£5 million ($7.8m), but claimed at the start of the auction process that any bid over and above
the £350,000 ($543,000) cash he had invested would represent a successful outcome.....

Financial Markets around the world are driven by “greed and fear”.....
Derwent Capital Markets – Market Risk = Market Sentiment – Actual Results (Reality).....
• Derwent Capital Markets is using Twitter to figure out where the money is going - just like that. A hedge
fund that analyzed tweets to figure out where to invest its managed funds closed its doors to new
investors last year – after just one month in which it made 1.86% Profit – Annual Projection 21% reports
the Financial Times. “As a result we made the strategic decision to re-use the Social Market Sentiment
Engine behind the Derwent Absolute Return Fund – and invest directly in developing a Social Media on-
line trading platform” commented Derwent Capital Markets founder Paul Hawtin,
Info-graphic – Apple Historic Stock Data Analysis.....
• Investors and traders around the world have accepted the fact that financial markets are driven by
“greed and fear”. This info-graphic is an example of the kind of correlation we see between historic stock
price and social media sentiment data. A trading advantage can arrive if you spot a significant change in
sentiment which is a leading asset price indicator. Derwent Capital Markets are pioneers in trading the
financial markets using global sentiment derived from large scale social media analysis.
Mood states – “greed and fear”.....
• These two mood states are primitive human instincts which, until now, we've struggled to accurately
quantify. Social networks, such as Twitter and Facebook, burst on to the scene five years ago and have
since grown into internet giants. Facebook has over 900 million active members and Twitter over 250
million, with users posting over 2 billion "tweets“ or messages every week. This provides a hugely
valuable and rich source of real-time data that can be “mined” by super-fast computers.....
CFD Trading, Spread Betting and FX Trading using “Big Data”
Market Risk

Apple Historic Stock Data Analysis Info-graphic using “Big Data”
MARKET RISK = MARKET SENTIMENT – ACTUAL RESULTS (REALITY)
Market Risk

Example – Inter-connected Risk
A
Trigger
A
Freedom of Information Act (USA)
B
Trigger
B
Financial Services De-regulation Act (USA)
Employers can now view unspent convictions when
reviewing job applications from Convicted Felons
Convicted Felons can now apply for jobs
as Independent Financial Agents (IFAs)
C
Trigger
C
Risk
Event
Risk
Event
D
Related Risk Example – Sub-Prime Mortgage Crisis
The only jobs easily available to Convicted Felons is
as self-employed Independent Financial Agents (IFAs)
Risk
Event
Risk
Event
Independent Financial Agents (IFAs) miss-sell Sub
-prime Mortgages in Unregulated Financial Markets
Risk
Event
E
Mortgagees with miss-sold Sub -prime Mortgages cover year one and two repayments of
their low-start mortgage payment plan – but struggle as interest and monthly payments rise
Risk
Event
F
Mortgagees with miss-sold Sub -prime Mortgages begin to default
on repayments when their monthly payments rise at the end of the
low-start payment plan and increase in interest rates – so mortgages
are foreclosed , they are evicted and their homes become re-possessed.
Trigger
D
USA Sub-Prime
Mortgage Crisis

Related Risk Example – Credit Default Obligation (CDO) - Toxic Asset Crisis
Trigger
D
USA Sub-Prime
Mortgage Crisis
Example – Inter-connected Risk
G
Trigger
E
Risk
Event
Risk
Event
H
Rating Agencies (e.g. Standard and Poors etc.) award
AAA Rating to Credit Default Obligation (CDO) Products
Risk
Event
I
Investment Analysts in US and European Banks recommend that their clients
invest in sub-prime Credit Default Obligation (CDO) Products with AAA Rating
Risk
Event
J
US and European Banks invest heavily in sub-prime
Credit Default Obligation (CDO) Products with AAA Rating
In expectation of low risk / high returns on investments
Trigger
F
CDO Toxic
Asset Crisis
Merchant Banks rack-and-stack tranches of sub-prime
mortgages into Credit Default Obligation (CDO) Products
K
E
Trigger
K
Sovereign
Debt Crisis
B
Trigger
I
Money
Supply
Shock
C
Trigger
H
Financial
Services
Sector
Collapse
D
Trigger
G
L
CDO Products
A
Trigger
J
Credit
Crisis
Global
Recession

Risk Management Frameworks
Throughout eternity, all that is of like form comes around again –
everything that is the same must return again in its own
everlasting cycle.....

Risk Management Frameworks
Standard (Integrated) Risk Framework
• Systemic (external) Risk – Future Management Frameworks – Outsights / Eltville Model
• Operational (internal) Risk – CLAS, SOX / COBIT
• Market (macro-economic) Risk – COSO, Basle II / Solvency II, BoE / FSA
• Trade (micro-economic) Risk – COSO, SOX / COBIT, GAAP / IFRS
Event Risk
• Event Risk is the threat of loss from unexpected events. Event Risk measurement systems seek to quantify the
actual or potential (realised or unrealised) exposure of the total asset portfolio to unexpected Wild Card or Black
Swan Events. Event Risk may arise from Systemic (external) sources – such as Natural Disaster, Geo-political
Crisis, or the collapse of Local, Regional or Global Markets or the failure of Sovereign Nation States - or Operational
(internal) sources – such as Rogue Trading or the failure of Compliance or Disclosure systems and processes.
Market Risk
• Market Risk is the threat of loss from movements in the level or volatility of Market Prices – such as interest rates,
foreign currencies, equities and commodities. Market Risk measurement systems seek to recognise the actual or
potential (realised or unrealised) exposure of the total asset portfolio as a result of money supply or commodity price
shocks (sudden changes in the balance between supply and demand) and changes in market sentiment affecting
the attractiveness, desirability or value of the asset portfolio – as well as changes in the level of market intervention
(government legislation or market regulation).
Trade Risk
• Trade Risk is the threat of loss from erosion in the attractiveness, desirability or value of specific traded instruments
between individual counterparties – including contracts for foreign currencies, equities and commodities. Trade Risk
measurement systems seek to quantify the actual or potential (realised or unrealised) value of specific contracts or
traded instruments, Trade Risk does not cover Incremental Risk Capital Charge (IRC) due to Toxic Asset lock-in.

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