From Dr James Wilsdon Director, Royal Society Science Policy Centre:
I am pleased to announce the launch of the Society’s report Hidden wealth: the contribution of science to service sector innovation, which is available for download at http://royalsociety.org/downloaddoc.asp?id=6511. Services make up about three-quarters of the UK economy. The report highlights the wider significance of science, technology, engineering, and mathematics (STEM) to the services sector, and makes a number of recommendations that I hope will be of interest to you.
We conclude that STEM is deeply embedded within the UK service sectors and has an extensive impact on service innovation processes, which is often hidden. Although STEM is important in services sector innovation now, it is also likely to play an important part in the future of services, as many services are on the cusp of a transition to more personalised and interconnected systems, which will require significant advances in STEM.
I would particularly like to draw your attention to the following recommendations that identify ways in which the contribution of STEM to innovation in services can be strengthened:
· A need for greater engagement between the academic services community and services forms, in order to ensure that opportunities to exploit STEM in services are properly recognised, and to align research and market opportunities. We recommend that the Technology Strategy Board (TSB) and Research Councils initiate services-related Grand Challenges to address these issues. · The Sector Skills Councils should undertake a large-scale exploration of STEM skill needs in services sectors to inform the development of more suitable undergraduate and postgraduate courses that better meet the needs of service sectors. This should be overseen by the UK Commission for Employment and Skills. · An increase in the scale of knowledge exchange between services organisations and the academic STEM community through the creation of specific services Knowledge Transfer Partnerships by the TSB. · With regards to financial services: o The creation of world-leading centres of modelling and risk assessment that are relevant to and actively engaged with financial services institutions. o The Bank of England, Financial Services Authority and the Research Councils should explore ways for the science base to contribute to more effective modelling of systemic risk in financial services. o The Financial Services Authority and the Financial Services Skills Council should institute and mandate competency levels for those with managerial roles in the understanding of mathematical modelling and risk in complex systems. o Finally, the Funding Councils should review the contents of financial engineering and related courses in the UK and, in association with Higher Education Institutions, ensure the provision of appropriate curriculum elements such as considerations of risk, safety tolerances, testing, adherence to published standards, wider understanding of economic contexts, and also any ethical considerations. · Improving the understanding of services and service innovation models supported by STEM by policymakers, researchers and funders through the development of a greater body of academic research into services innovation. This initiative should be led by the Economic and Social Research Council, with other research funders providing additional support. · The need to foster innovation in the public services is high on the government’s agenda at present. We urge the Cabinet Office and the Department for Business, Innovation, and Skills (BIS) should establish a team to undertake detailed work on how STEM can be exploited more successfully to foster public sector innovation. · Finally, because the sector is mutating rapidly we recommend that official statistics on the services sector be improved.
I hope you find the report useful and would welcome your comments on it. If you wish to discuss issues in the report further I would be happy to arrange a meeting with members of the working group. We will be monitoring the implementation of these recommendations. If you wish to make any comments on the report or would like any hard copies, please contact Dr Rochana Wickramasinghe (
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).
Science publications
Want to know what's going on in the world's research labs? Then try browsing CFC's electronic library.
We provide all the reference details you need to find the full version. These details include authors, title, publisher, date, and (where available) the paper abstract.
Your in-house research team can get full value from interacting with the bibliography using the following features:
upload of BibTeX files (to add to the library, for your use and for the benefit of other members)
browse, search and filter (either the whole library, or just those items you have previously uploaded)
view summary or full details
download the results of a search as a BibTeX file
In future, we also hope to use the bibliography to drive many other useful resources (such as the ten authors who appear most often in the bibliography, the ten research groups which appear most often, and so on).
Darwin, DNA & Financial Evolutionary Computing
Darwinian evolution is being used by computer scientists to provide solutions to a wide range of problems in finance, from non-linear factor models for stock-picking to adaptive load-balancing for dynamic grids.
By simulating the processes of evolution, scientists are able to "evolve" complex equations that match observed data distributions, thereby avoiding one of the pitfalls of mathematical models which rely on unrealistic assumptions such as the Normal or Gaussian distribution (also known as the "bell curve").
Genetic and evolutionary approaches are also able to produce solutions that are robust in the face of market volatility and that (via continuous evolution) are able to adapt to a dynamic and unpredictable market. Continuous adaptation can also be harnessed for tasks such as adaptive load balancing and adaptive agent-based simulations.
To learn more, search the CFC bibliography using the keywords "genetic" or "evolutionary". Also see the chapter on genetic algorithms in "The Encyclopedia of Trading Strategies" by Jeffrey Katz and Donna McCormick
Focus Group Meeting on Market Simulation
Advancing Collaboration Between Industry & Academia and Exploring Innovation Challenges
Thought Leadership Focus Group on Market Simulation
Workshop Venue: Holborn Bars, 138-142 Holborn, London EC1N 2NQ
18 March 2010, 5:30pm - 7:30pm
Following the Thought Leadership in Trading technology workshop on the 20th January 2010, this will be the first meeting of the Market Simulation focus group. Our aim is to produce a manifesto that will be presented at the Trade Tech conference in April.
Theme for this Focus Group
Key Observations:
◦ The financial markets are highly complex and constantly changing.
They are non-linear and dynamically adaptive
Players do not behave rationally
Dark pools and other trading mechanisms are deliberately employed to hide the market impact of certain transactions
Markets are often unstable, and often lose the ability for self-regulation
The markets are very difficult to model using standard closed-form techniques
◦If we could successfully model the markets, to a level of detail that captures behaviours of individual firms and individual traders, we could:
Assess market impact of different trading strategies
Assess the market impact and market stability consequences of - New products - Multiple competing algos - New order types - New market microstructure (semi-lit books, smaller tick sizes)
Explore the modes of failure of the global markets - Discover early warning indicators of critical market transitions - Explore strategies to survive a liquidity crisis
Investigate whether the better economic stimulus is (i) tax reduction or (ii) public spending
Key Questions:
◦ What science can we use from other sectors? eg. Can we draw insights from other research such as stability of eco-systems?
◦ What answers do we want to get from the simulator?
◦ Can market simulation provide market alerts?
◦ Is it possible to predict the value of a stock?
◦ Is it possible to make meaningful statements about current trends?
◦ How can we include behavioural aspects into a new model/simulation?
Registration
We are grateful to our sponsors who have covered the costs of the room and refreshments. We will ask two participants (selected at random) to take notes during the meeting, to avoid the need to employ a technical secretary. As a result, this meeting is free of charge.
Please email Lucinda Kingswood (
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) if you are interested in this focus group meeting.
Thought Leadership in Trading Technology
Advancing Collaboration Between Industry & Academia and Exploring Innovation Challenges
Thought Leadership in Trading Technology
Workshop Venue: Holborn Bars, 138-142 Holborn, London EC1N 2NQ
20 January 2010
Following Dave Cliff's two very successful workshops organised at Trade Tech 2008 and Trade Tech 2009, it was agreed that an interim Thought-Leadership Workshop should be held before Trade Tech 2010. We are now delighted to announce that the interim workshop will be held on January 20th in London. As in the previous workshops, delegates and speakers will include leading representatives from technology-based equity trading, industry analysts, academic innovators, and research funders.
This workshop will dig deeper into themes and industry challenges developed previously and aims to turn thought into action - to identify practical next steps and who will be involved from industry and academia. It is hoped and expected that all delegates will be active participants in round-table discussions.
The final schedule for the workshop is:
1:30pm
Arrival
2:00pm
Welcome - Dave Cliff
2:05pm
Presentation - Systems Latency (Matt Dangerfield)
2:25pm
First Discussion Session (Systems Latency): delegates join round-table discussion. The round-table is tasked to prioritize the various challenges and identify the two or three most important, together with named individuals who will be involved in further activities to find solutions. Issues relating to missing parties ("who else needs to be involved?"), project management, and exploitation of results should be noted. The key theme of this discussion is "Systems Latency", but can if necessary or appropriate be widened to encompass other performance issues such as inter-core contention and data movement.
2:45pm
Potential projects and sources of funding (Systems Latency)
Second Discussion Session (TCA): as before, delegates join round-table discussion. As before, the round-table is tasked to prioritize the various challenges and identify the two or three most important, together with named individuals who will be involved in further activities to find solutions. Issues relating to missing parties ("who else needs to be involved?"), project management, and exploitation of results should be noted. The key theme of this discussion is "Transaction Cost Analysis", but can if necessary or appropriate be widened to encompass other related issues such as historical data sets.
4:05pm
Potential projects and parternships (TCA)
4:15pm
Summary of findings from the two discussions, next steps and final remarks.
4:30pm
Drinks and Canapes. Drinks reception, sponsored by Pipeline Financial Group
5:00pm
End
Each round-table will be provided with a technical secretary to take notes, and following the workshop delegates will receive a brief report covering all discussions, noting further actions and next steps.
Registration
To cover costs, including the technical secretariat, there will be a registration fee of £95 for industry and £20 for academics. To register, please first sign up as a member of the Centre for Financial Computing.
Want to know what's going on in the world's research labs? Then try browsing CFC's 
Darwinian evolution is being used by computer scientists to provide solutions to a wide range of problems in finance, from non-linear factor models for stock-picking to adaptive load-balancing for dynamic grids.
