Intelligent Integrated Systems of Automated Designing Laboratory (IISAD)

1. Top-economics. Management of socioeconomic safety.
2. Risk management technologies in structural complex systems.
3. Management of safety, invalidity and survivability in engineering and economics.

   Academic discipline "Reliability" is studied in engineering, but it does not exist in economy, although failures, bankruptcies and crises happen not infrequently. Let's give a name to this discipline for economy "socioeconomic safety management of social and economic systems (SES)" and assign to it, similar to "microeconomics" and "macroeconomics" a short name - "top-economics".

   The safety of a country depends not only on its military, energy and information safety, but also on socioeconomic safety - the sustainable development of SES systems: anti-corruption and drug addiction in a country, the management innovation system and others. We have adopted as the basis the concept of a Chinese leader Li Keqiang according to which technological innovations are viewed as equal to innovations in management, including state management.

   At present, management of socioeconomic safety is considered "on concepts". Management on concepts is the management on the basis of different generated images that have different subjects of different and often changing. It is proposed to manage the socioeconomic safety on a common understanding of the rules on the basis of logical and probabilistic (LP) risk models. The LP-models of SES invalidity are built. To make the correction of the probabilities of initiating events in SES risk LP-models one can use the data of the monitoring of SES indexes and signal events concerning the changes in economy, politics, law, innovations, etc. The LP-models are used to conduct SES risk assessment, analysis and forecasting. Risk is managed by making decisions concerning the allocation of resources for the changes of initiating events probabilities in SES.

   We propose to manage the state of a country and its SES by risk and efficiency criteria. Logical and probabilistic (LP) risk models are built. The success of a state as an event has a certain probability. Invalid events are considered. They mean the deviation of SES parameters from certain requirements and norms. SES have common initiating events (IP), which ensure their connection. LP-risk models of different SES can be easily combined into one model.

   Priority fundamental scientific directions of the Russian Government and Academy of Sciences do not include any research on socioeconomic safety management.

   Nobel laureates James Buchanan and James Heckman studied the relationship of economics and politics in the development of a state on the basis of game theory, simulation and statistical data analysis.

   We consider the interconnection of economy and politics from a broader perspective. We have to assess the opportunities of the subjects (state, business, society) to solve the SES problem and bear in mind the signal events concerning the changes in economy, politics, law, innovations, as well as natural disasters and wars and the changes in the world market so as to correct the probabilities of initiating events in the SES risk LP-model.

   We choose the following concepts, principles and models for socioeconomic safety management of SES:

   1. The principle of management by the risk criterion with an estimation of possible losses;
   2. The concept of social justice in society by Nobel's principle. In fact, by Nobel's principle, significant portion of the profits they are spending on workers: Nobel pays decent wages, built homes, kindergartens and schools, provide free medical services, increase qualification of workers, invest in science and innovation;
   3. The concept of the Chinese leadership (Li Keqiang), consists in the fact, technological innovations and innovations in management, especially in state management, must be treated on the equal basis.
   4. The principle of system development management system as a complex object control with the motion on the program trajectory and correction in case of deviation.
   5. The management principle by signal events with correction of probabilities of initiating events of the risk LP-models of SES.
   6. The postulate. Socioeconomic problems are not solved without scientists and public opinion.
   7. The concept of American Lawyers: everyone can make actions fraudulent in a difficult life situation and if this fraud can be concealed, at least, temporarily.

   Principles are realized in mathematical models of socioeconomic safety management, concepts are realized in technologies of safety management of socioeconomic systems. The postulate is proved by modeling and experience.

   Top-Economics. Socioeconomic safety management

   Academic discipline "Reliability" is studied in engineering, but it does not exist in economy, although failures, bankruptcies and crises happen not infrequently. Let's give a name to this discipline for economy "socioeconomic safety management of social and economic systems (SES)" and assign to it, similar to "microeconomics" and "macroeconomics" a short name - "top-economics".

   The safety of a country depends not only on its military, energy and information safety, but also on socioeconomic safety - the sustainable development of SES systems: anti-corruption and drug addiction in a country, the management innovation system and others. We have adopted as the basis the concept of a Chinese leader Li Keqiang according to which technological innovations are viewed as equal to innovations in management, including state management.

   At present, management of socioeconomic safety is considered "on concepts". Management on concepts is the management on the basis of different generated images that have different subjects of different and often changing. It is proposed to manage the socioeconomic safety on a common understanding of the rules on the basis of logical and probabilistic (LP) risk models. The LP-models of SES invalidity are built. To make the correction of the probabilities of initiating events in SES risk LP-models one can use the data of the monitoring of SES indexes and signal events concerning the changes in economy, politics, law, innovations, etc. The LP-models are used to conduct SES risk assessment, analysis and forecasting. Risk is managed by making decisions concerning the allocation of resources for the changes of initiating events probabilities in SES.

   We propose to manage the state of a country and its SES by risk and efficiency criteria. Logical and probabilistic (LP) risk models are built. The success of a state as an event has a certain probability. Invalid events are considered. They mean the deviation of SES parameters from certain requirements and norms. SES have common initiating events (IP), which ensure their connection. LP-risk models of different SES can be easily combined into one model.

   Priority fundamental scientific directions of the Russian Government and Academy of Sciences do not include any research on socioeconomic safety management.

   Nobel laureates James Buchanan and James Heckman studied the relationship of economics and politics in the development of a state on the basis of game theory, simulation and statistical data analysis.

   We consider the interconnection of economy and politics from a broader perspective. We have to assess the opportunities of the subjects (state, business, society) to solve the SES problem and bear in mind the signal events concerning the changes in economy, politics, law, innovations, as well as natural disasters and wars and the changes in the world market so as to correct the probabilities of initiating events in the SES risk LP-model.

   We choose the following concepts, principles and models for socioeconomic safety management of SES:

   1. The principle of management by the risk criterion with an estimation of possible losses;
   2. The concept of social justice in society by Nobel's principle. In fact, by Nobel's principle, significant portion of the profits they are spending on workers: Nobel'a pay decent wages, built homes, kindergartens and schools, provide free medical services, increase qualification of workers, invest in science and innovation;
   3. The concept of the Chinese leadership (Li Keqiang), consists in the fact, technological innovations and innovations in management, especially in state management, must be treated on the equal basis.
   4. The principle of system development management system as a complex object control with the motion on the program trajectory and correction in case of deviation.
   5. The management principle by signal events with correction of probabilities of initiating events of the risk LP-models of SES.
   6. The postulate. Socioeconomic problems are not solved without scientists and public opinion.
   7. The concept of American Lawyers: everyone can make actions fraudulent in a difficult life situation and if this fraud can be concealed, at least, temporarily.

   Principles are realized in mathematical models of socioeconomic safety management, concepts are realized in technologies of safety management of socioeconomic systems. The postulate is proved by modeling and experience.

   1. Components of top-economics

   Discipline "top-economics" or "management of socioeconomic safety" in SES includes the following components:

   1. Methods: definitions of top-economics and invalidity in economics; LP-calculus with Boolean "events-propositions";
   2. Models: hybrid risk LP-models of difficult problems solution failure, invalid LP-models of SES state, conceptual LP-models of development forecasting, indicative models of SES state danger;
   3. Technologies of risk management in SES;
   4. The problems: assessment, analysis, forecasting and management of risk in SES;
   5. Objects of management: SES of groups SES-1, SES-2, SES-3;
   6. Special Software.

   2. Invalidity and top-economics

   1. Invalidity in economy is introduced by analogy with failure in reliability in technology. It has not two values (failure / non-failure), but a set (multi-state) of values to [0, 1].
   2. International standard ISO 9000-2001 uses the term invalidity for assessing the quality of works, rendered services, products and systems of management.
   3. The invalidity of a system or a parameter is a deviation of its states from the states given by technical requirements and specifications.
   4. An invalid state is considered as an event-proposition. The degree of invalidity has different values in the range [0, 1] and is considered a risk.
   5. Invalidity of a system as an event is calculated by the invalidity of its events-parameters.
   6. If a parameter is const, then it is not an event in the system state.
   7. Risk LP-models of SES can be combined by operations AND, OR, NOT.
   8. The number of indicators initiating risk is substantially less than the number of parameters describing a state of a system.

   Subjective and objective in invalidity. The central concept of the top-economics is the invalidity of socioeconomic system. Let us give a philosophical explanation of this concept by analogy with concept of safety in the engineering.

   Invalidity is an event that occurrence causes system perform a given purpose, but with the loss of quality. In practice, there can be difficulties in invalidity assessing which one person represents as deviation from the specified requirements, and the other person -- no. Why the same fact may have different opinions about the validity and invalidity of the system? What is objective and what is subjective?

   Every system (object) can be describe in various ways. One way is to describe the preparation of the final set of requirements to be satisfied by the object. If the object satisfies all requirements then it is valid.

   Drawing up a set of requirements to the system we associate with the activities of some people. Therefore it is a subjective act, depending on the completeness of the knowledge on system, experience and other facts. In this it is possible an error in the appointment of certain requirements, and omissions of some of them. Moreover, these requirements can change at the will of developers, i.e. they are dynamic.

   Despite on all the completeness of the system requirements, and the subjective nature of establishing, at any time one should be allocated and fixed some certain set of requirements (standards), in relation to which it is possible to objectively assume on validity or invalidity of the system. This is the dialectic of subjective and objective in the assessment of invalidity: we subjective set system requirements to the system and objective we consider its status with respect to these requirements.

   Events-statements of invalidity - a proposition rejecting the figure of zero or a predetermined value. Indicators and normalized values are in the range [0, 1]. The proposal that the value of the index q_i > 0, there is an event-proposition. The probability of event-statements equal to the value of the index. For normalized parameters will be used in the calculations one of two characteristics:

   1) parameter is invalid q_i > 0, if 0 is the lowest allowable value; then considered invalid and the risk parameter;

   2) a valid parameter q_i > 0, if 0 is the nominal value; then examines the efficiency and effectiveness of the probability parameter.

   Events of invalidity and events on efficiency parameters are logically connected in accordance with the structure of SES risk scheme. The system should be constructed as a monotonous in respect of the statements of events.

   3. The scientific and practical significance of the top-economics

   The scientific and practical significance of the top-economics determine its following features and benefits:

   1. Top-economy has interdisciplinary character, as it deals with economic, social, organizational, legal, information logical-probabilistic aspects.
   2. A system invalidity, unlike the reliability theory in technology, where there are only two states of system elements (failure and non-failure), has multi-states. The probability of invalidity as a event is calculated by values of states of invalidity of the system elements.
   3. SES economic safety management has integrated nature, as it depends on several department RAS and ministries. Due to this integrated nature there exist certain difficulties of SES socioeconomic safety management.
   4. The connection of different SES is performed by repeated initial events that occur in a different LP-model.
   5. LP-models dynamics of SES is provided by the correction of probabilities of initiating events: the emergence of new statistical data about system states; the appearance of new signal events related to the changes in economics, politics, law and innovations; the change of the situation in the world market; reforms in education, science and economy.
   6. Risk management technologies with logical-probabilistic models are employed. Those technologies have information, intellectual and innovative nature.
   7. We can build the invalidity LP-model of the system, using parameters of one state of the system.
   8. Transparency of methods, models, technologies and tasks in top-economy.
   9. We use the risk LP-model of SES to assess, analyze, predict and manage risk by allocating resources to reduce the risk of events.
   10. Management of economics can be expanded and improved, if in addition to the tasks of micro-economics and macro-economics such problems as the management of economic safety of systems SES-1, SES-2, SES-3 will be solved.

   4. Objects of top-economics

   Group SES-1 contains SES of the highest importance for the state, aimed at reducing the loss of funds and increasing revenues:

   1. Management of the innovations system state of a country,
   2. Counteraction to corruption,
   3. Counteraction to drug addiction in a country,
   4. Management of the banks risk and capital reservation by Basel,
   5. Systems and products quality management by WTO,
   6. Monitoring and management of credit provision to banks.

   Group SES-2 contains complex SES for the state and the regions that depend on several ministries, agencies and legislative bodies, for example, the following: the risk LP-model of fertility status in the country, LP-model of risk of failure solving the problems of education, LP-model of risk of failure solve the problem of information and others.

   Group SES-3 contains local SES for companies and firms whose success depends mainly on their desires and capabilities, for example, the following: the risk LP-management of the restaurant "Prestige"; LP-models of failure risk management company ZAO "Tranzas"; risk LP-model of "Logwin Road + Rail Rus" and others.

   Note that micro- and macroeconomics do not solve the problem of the socioeconomic safety management of socioeconomic systems of groups SES-1, SES-2, SES-3.

   5. New types Boolean events-propositions in socioeconomic safety

   We extend the concept of a Boolean "event-proposition", introducing new types of "events-propositions": events of subjects' failure, signaling events, invalid events, conceptual events, indicative events, etc. In the socioeconomic safety management of SES instead of the probabilities of true/false events we use the probabilities of success/failure and hazardous/non-hazardous events.

   I. Ryabinin evaluated the contribution of outstanding scientists G. Boole, P. Poretsky, S. Bernstein, A. Kolmogorov and V. Glivenko in LP-calculus. P. Poretsky discovered LP analysis. The probabilities of events-propositions are essentially fuzzy logic elements used in logical deduction machines.

   1. Events-propositions about the non-success of subjects. An event-subject is the failure of solving a difficult problem by a subject: the government, business, banks, academics, public opinion.
   2. Signal events-propositions. We use only the fact of their occurrence in economics, politics, rules and laws, innovations, natural disasters and changes in the global market for the correction of probabilities of initiating events (IE) by non-numerical, inaccurate and incomplete expert information.
   3. Event-proposition about invalidity is a proposition about the deviation of a parameter from zero or a given value. Parameters are normalized and have values within the range [0, 1]. Event-proposition about invalidity has the risk equal to the parameter value (the indicator).
   4. Conceptual events-propositions predict the system evolution. The probabilities of the truth of events-propositions are evaluated by expert information.
   5. Indicative events-propositions are considered as invalid events. Their measure of danger is the deviation of the parameter value from the given one.
   6. Events-propositions about latency. Probabilities of events-propositions are estimated by interviews and the data from social networks.
   7. Groups of incompatible events (GIE) in LP-risk models of SES are entered for gradations of parameters.
   
   
   Here you can read about Top-economics more detaily (PDF file).

   Risk management technologies in structural complex systems

   
   

   Risk Management Technologies (RMT) in structural complex systems are a set of LP-models, technologies, procedures, special software and examples of risk estimation and analysis. RMTs use informational, intellectual and innovative approach. Systems and processes are described as structural and complex with casual events. We introduce events of occurrence and failure of system's states, events for parameters and their grades, invalid events. In RMTs SCS risk and efficiency are considered as a whole.

   RMTs components include:

   1. LP-calculus,
   2. Classes of LP-risk and efficiency models,
   3. Procedures for the classes of LP-models,
   4. Special LP-software for the classes of LP-models,
   5. Applications examples,
   6. The training course.

   LP-calculus is a mathematical tool of RMTs. In risk management technologies the events have not two, but a finite set of values, statistical data contain events about the occurrence and failure of system states; the expanded definition of an event is considered. RMTs use the extended definition of an event and deal with 20 types of events-propositions.

   Classes of LP-risk and efficiency models:

   1. LP-modeling,
   2. LP-classification,
   3. LP-efficiency,
   4. LP-forecasting,
   5. Hybrid LP-risk models.

   Procedures for the classes of LP-risk models:

   1. Construction and orthogonalisation of L-risk models,
   2. Identification of LP-risk models by statistical data,
   3. LP-risk analysis by the scores of initiating events (IE),
   4. LP-risk management,
   5. LP-risk forecasting in the time and space of states,
   6. Synthesis of events probabilities in LP-models.

   The management of state and evaluation of systems includes the following steps:

4. Development of the scenario, L-model and P-model of the system risk,
5. Assessment and synthesis of the probabilities of initiating events,
6. Calculating the risk of the final event,
7. Risk analysis by the importance and contributions of IE,
8. System state risk management,
9. System evaluation risk management.

Classes of risk LP-models in Risk Management Technologies

There are five classes of risk models with regard to statistical data application, ways of calculating system risk, initial events probabilities and efficiency parameter, final Y and initial Z event links in RMT.

Unlike scoring models, these models not only fit statistical data, but also explain them. One can find up to 40 definitions of risk in different publications. They might be of some interest to philosophers dealing with poorly understood problems. The task of risk definition can be solved quite simply, if we try to answer the question: for which class of LP-models is risk viewed and to which event in the system does it refer to?

It should be noted that in the classes of LP-efficiency and LP-forecasting LP-risk models are used indirectly for building the functions of the system efficiency parameter distribution and definitions of allowed values of risk and efficiency.

LP-modeling class. Statistical data are not used. One final system state-event is considered (for example, company management failure risk, difficult problems solution failure risk, euro exchange rate fall risk, risk of the economic crisis in a country, etc.). Experts give the probabilities of initial events by experimental or statistical data. Risk and efficiency of an event are calculated.

Risk scenario is formulated and L- and P-functions of failure risk are built for the final event. Failure risk (probability) P of the final event takes only two values: 1 and 0 with probabilities P_i and Q_i = 1 - P_i .

Efficiency is calculated by the formula E = P * S, where S is damage range for a system when it fails completely. Structural and probabilistic contributions of initial events into the risk and efficiency system are calculated.

LP-classification class. We use statistical data from a set of system objects or states (for example, bank credits, banks ratings, system states, etc.).

Events failure states are considered. For each state the efficiency parameter is known, which equals 1 for good events and 0 for bad states. The statistical tabular database is transformed into a tabular knowledge base by inputting events-gradations for parameters, describing the state. L- and P-functions systems of a system failure risk are written down, which are databases. Events-gradations probabilities are determined by solving the identification task for the P-functions system by statistical data.

Then the risk of each system state P_i is calculated, admissible risk P_ad is given, average risk P_m is calculated (Fig. 1). Condition P_i ≤ P_ad divides the states into good ones (1) and bad ones (0). For all new states the values of risk and efficiency parameter 1 or 0 are calculated. Frequency and probabilistic contributions of events-gradations into risk states, average system risk and accuracy of LP-risk models are calculated.

LP-efficiency class includes LP-risk models, which use statistical data in which either the optimal efficiency parameter value (investments portfolio returns) is calculated, or the efficiency parameter is known from statistical data (a restaurant or a shop daily sales volume, etc.). For these LP-models frequency risk analysis is performed by contributions of initial events-gradations into the left or the right tail of the efficiency parameter distribution.

For example, investment portfolio states using stock prices data are calculated. For each state returns on equities Z₁, Z₂, ..., Z_n in the portfolio are well-known. The events of the states occurrence are considered. A statistical tabular database is transformed into a tabular knowledge base by introducing events-gradations for the returns on equities and portfolio.

The system of L- and P-functions for the occurrence of states, which are databases, is written down. Portfolio return Y is calculated for each state as a function from returns on equities Z₁, Z₂, ..., Z_n and capital shares x₁, x₂, ..., x_n invested in equities, and the portfolio return discrete distribution is built (Fig. 2).

State Y_i occurrence probabilities are calculated either (1) by the frequencies of events-gradations parameters, or (2) by the efficiency parameter frequency - by building a distribution bar graph. The frequency of events-gradations contributions into the risk and efficiency of the distribution tail is calculated. Contributions are used for managing the portfolio-taking a decision of excluding the shares from the portfolio or including new shares.

LP-forecasting class includes LP-risk models, using statistical data for forecasting failure risk. This is performed by the transition from the LP-model of LP-efficiency class to the LP-model of LP-classification class and by solving the identification task for defining the probabilities of events-gradations leading to a failure.

For example, the statistics of a restaurant's daily sales is considered. Each state is described by influencing parameters Z₁, Z₂, ..., Z_n (day, month, menu type, etc.). State occurrence events are considered. Statistical tabular data are transferred into a tabular database by inputting events-gradations for initial parameters and the efficiency parameter. The efficiency parameter Y for each state is known. L- and P-functions systems for the occurrence of states which are knowledge bases are written down. The distribution for efficiency parameter Y is built. The probabilities of states Y_i occurrence are calculated either (1) by the frequencies of parameters events-gradations, or (2) by the frequencies of the efficiency parameter - by building a distribution bar graph.

Forecasting is performed in the system states space. For forecasting purposes admissible risk P_ad of the efficiency parameter is selected. For the left or the right distribution tail of efficiency parameter risk as the tail area is calculated.

Then a transition from the LP-forecasting model to the LP-classification model is performed (Fig. 1 and 2). In order to do this, for example, states Y_i ≥ Y_ad are considered as good, and states Y_i ≤ Y_ad - bad. The identification task is solved, and the probabilities P_jr of events-gradations of initial parameters are determined. Now one can forecast the risk and efficiency of those states in a system which were absent from the statistical data.

We use following three factors for classification of subjects of research in LP-management of risk and efficiency in structural complex systems:

1. Classes of LP-models of risk and efficiency;
2. Procedures of informational technology of LP-management;
3. LP-management applications.

Classes of LP-models of risk and efficiency

1. LP-modeling. Probabilities of events are obtained from experimental data or assigned by experts, risk and efficiency of one event is calculated (the risk of EUR/USD exchange rate falling, failure in presidential election, economical crisis in a country, etc.). Statistical data is not used.
2. LP-classification. Statistical data is used, events of failure of states of the system are considered, systems of logical and probabilistic equations are used. Probabilities of failure of grade-events are determined in process of identification of the risk P-model under statistical data (for example, classification of credits, banks, states of the system, etc.)
3. LP-efficiency. Efficiency of states of the system is calculated, statistical data is used, events of appearance of states of the system are considered, systems of logical and probabilistic equations are used. Probabilities of appearance of grade-events are calculated as frequencies in statistical data and direct task of risk is solved (for example, LP-model of risk of security portfolio).
4. LP-forecasting. Efficiency of system's states is given under statistical data, events of appearance and failure of states of the system are considered, systems of LP equations are used. Probabilities of appearance of grade-events are calculated as frequencies in statistical data and as probabilities of failure, the direct and indirect tasks of risk are solved (for example, LP-models of risk of turnover in restaurant and shop, risk of bribes and corruption, forecasting of the state of compressor station in gas pipe line, etc.).

The procedures of informational technologies of LP management

Two types of methodical and theoretical research

Thus, 24 small subjects of research are selected and 10 large subjects of research: 4 subjects for every class of LP-models of risk and efficiency with consideration of all procedures of informational technology of LP-management of systems and 6 subjects for every procedure of informational technology of LP-management of systems considered for all classes of LP-models of risk and efficiency.

In engineering and economics the area of applications of risk LP-models is practically infinite. It is enough to present the system as the structural complex system and have statistical data. Subjects of research of LP-management of risk and efficiency can be chosen similarly with performed research.