Risk Management/Systems Thinking and Risk

Coral reefs are a highly productive marine ecosystem.

Rainforest ecosystems are rich in biodiversity

Human existence on earth is facing major risks. To accomplish risk mitigation,it necessary to maximize the impact of risk mitigation. Ecosystems, social systems, economics, humans and human behaviour are complex dynamic systems. A Systems Thinking analyse the system and its parts in their interactions and dependencies. Combining systems thinking and risk management has the objective to access risk mitigation in the probable impact on other risk factors that are connected by mutual dependencies and feedback loops. This leads to a more holistic assessment of a variety of available systems services.

Applied Systems Analysis for Risks

There are several ways how risk manangement involves systemic thinking include:

• System and its parts: a system is composed of parts and risk mitigation in one part may have an impact on the risk in other parts (e.g. use or larvicides, fogging reduces the risk of getting a vector-borne disease like Malaria, Dengue.
• a system is other than the sum of its parts: Even if all parts analysed independently show a impact on risk mitigation the system as a whole could show unexpected contrary impact due to the connectivity and feedback loop of the parts
• System Boundary: a system is encapsulated (has a boundary), the actors in the system have access to resources in the system. The impact on risk mitigation is determined by the access to the resources in the system (e.g. Application of Open Educational Resources (OER) reduces financial constraints and speeds up development and adaptation of risk mitigation strategies to local and regional requirments and constraints.)
• Nested Systems: a system can be nested inside another system, the risk in a nested system could have a non-linear and unexpected impact on the system that embeds the nested ones
• Overlap of Systems:a system can overlap with another system
• System life cycle: a system is bounded in time, but may be intermittently operational. Stopping and starting system activity can be triggered by risk assessment (e.g. in an agricultural system the application of pesticides to minimize the loss of harvest yield could be stopped due to major negative impact of agrochemicals to public health of farm workers)
• Spatial Boundary: a system is bounded in space, though the parts are not necessarily co-located. Communicable diseases can be spread via an air traffic network. Geographically separated communities can have strong connectivity (spreading of communicable diseases as an epidemiological risk)
• Input-Processing-Output (IPO): a system receives input from, and sends output into, the wider environment, so risk is also propagated in a wider environment may cause an unexpected and undesired systemic impact. The system consists of processes that transform inputs into outputs and interacts with IPO structures of nested systems. The risk management can attach a the risk analysis to certain inputs, outputs and transformation insight a system and the assessment of risk can determine the processing in a feedback loop.
• System Autonomy: a system is autonomous in fulfilling its purpose (a chemical risk mitigation activity is not a system. A team of a vector control unit that is able to perform the risk mitigation activity is a system)

Learning Activities - Risk

Learning Activities focus on basic understanding or risk

$Risk=Probability\times Impact$

by comparing two different events (flu epidemic and accident of an atomic power plant).

Accident in an Atomic Power Plant

Analyse the application of atomic energy first:

• Benefit: Who benefits from application of atomic energy?
• Responsibility: Who is responsible for any negative impact of atomic energy and covers the costs of the accident? Is an institution, company, government able to cover the costs of an accident?
• Drivers: Who pushes the application of technology and why?
• Impact: We had two major accidents (Chernobyl, Fukushima. Try to design a insurance and determine a rate for a single nuclear power plant to cover all the losses that occur by these such an accident described above. What would be the yearly rate for such an insurance by including economic, ecological, health-related, cultural, ... losses as good as you can? The purpose is not, to get the yearly amount of money for the issurance right! You learning task is meant to identify systemic links between the finance system, ecology, economy, social, cultural and health-related issues.* What are the losses if an accident like Fukushima, Tschenobyl occurs (loss of lives, medical impact on citizens, loss agricultural areas for production of food, loss of value of land, loss of economic productivity in a certain area for x years?
• The insurance will rise the costs per kilo watt hour. Estimate how much would the insurance fee increase the costs for electricity supply for customers?

Flu Epidemic in your Country

If we compare the probabilty of getting a flu and be sick for one week with the probability of accident in a atomic power plant, the probability of getting a flu is much higher. For the risk we have to consider the impact of the event as well. If a risk manager calculates both risks in financial terms, the loss of labor force can be calculated.

• Calculate a rough amount of working hours that are lost due to the illness of the workers for the population of your country of origine.
• Calculate the financial loss with an average salery and average time span of the illness you are considering (e.g. flu)

Comparison of Risks

• Compare the calculated risks for flu and an accident in an atomic power plant with each other.
• What are similarities and differences in quantification and response activities?

Learning Activity Page

Add your results to following learning activity page Atomic energy.

• Learner should provide scientific evidence for their results and add the references to the activity pages
• Other learner build on the document, add to the discussion about the topic and experience the collaborative content developement in a team of distriubuted learners

Learning Activities for Applied Systems Analysis

• Explore the concept of the International Institute for Applied Systems Analysis IASA and analyse the tools and resource, how they can support you for determining a systemic risk.

Upland rice field near Sundarbazaar Lamjung, Nepal

• Consider a introduction of wet rice agriculture in african country for food production. In the setting the seeds are sown in small seedbeds. The requirements of stagnant water for the seedlings extends the area of mosquito breeding places. The risk of hunger in the population is reduced while the health risk will increase due to stagnant water as mosquito breeding places. Systems thinking looks on a network a linked entities in system and on feedback loops. Instead of selecting the wet rice agriculture in which the seedlings are transplanted manually to prepared paddy fields, the Upland Rice approach uses dry soil. Analyse the systems risk in more detail by taking the United Nations Sustainable Development Goals as a framework.

Teachers and Institutional Support

During the evolutions of the risk management course a special analysis for requirements and constraints of the learning and capacity building material were discussed on the margins of AT6FUI.

A brief summary of educational requirements and constraints introduces the application of material in seminars at universities.