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The Risk Management Angle on Time’s “10 Ideas for the Next 10 Years”

Each year, Time magazine does a story on “10 ideas that are changing the world.” This year, the editors have made it a more forward-thinking feature, labeling it “10 Ideas for the Next 10 Years.” And as is the case with most everything these days, I managed to see several risk management-related angles in some of the trends they expect to shape the coming decade.

Here is a run-down with some thoughts.

time 10 ideas for the next 10 years

Time’s Idea: Remapping the World
“Good borders make good neighbors. Bad ones make wars”

This idea basically says that physically redrawing some national borders — or at least minimizing their importance over logistical factors like multi-national infrastructure — will cause less international and intra-national conflict. Obviously, the risk management benefits here would come from less political risk across the globe.

If Sudan could be divided, the civil wars there may become less intractable and economic opportunities may open up to multinationals — which could help both companies otherwise too concerned about conflict to set up shop in-country and the people living there who desire jobs and better access to goods. A world full of “good neighbors” also clearly benefits any utilities or other companies trying to lay down the transnational pipelines or internet cables that will be increasingly necessary in our increasingly globalized future.

Particularly in the Middle East.

Time’s Idea: Bandwidth Is the New Black Gold
“And it’s a scarce resource”

An under-reported risk, the dependence on bandwidth for real-time information exchange is increasingly vital to all companies and organizations. Whenever this is interrupted, so is business. Today, aside from major disaster situations, this interruption is mostly an inconvenience. But in the future, as more and more of this bandwidth is taken up by video and other resource-intensive applications, there may be real problems.

In time, the mere slowdowns we see today may be eclipsed by full-scale information traffic jams. But beyond that, the deeper problems will be with high prices and possible profiteering. As demand for bandwidth goes up, suppliers will logically be able to charge more, as happens in energy markets.

Can we rely on private industry — the cable and telephone companies — to build its way out of these problems? In a word, maybe.

It will be difficult to manage this risk individually, but organizations need to be thinking about these “information jams” in years to come. Tim Wu of the New American Foundation explains it further in this video.

Time’s Idea: In Defense of Failure
“Making mistakes is a great American freedom”

This idea centers on the idea that the great innovation that marked the United States’ ascendence to the front of the global economy in the 20th century was greatly aided by the fact that its citizens were not afraid to fail. They took big chances knowing that even if they failed, they would have a chance “to try, try again” without being entirely wiped out.

The article worries that this courageousness is waning, mainly due to macroeconomic realities, and that “rather than launch a quixotic war on failure” as the author argues has been done against complex financial instruments on Wall Street, “we should be using what we’ve learned to build a system that fails better.”

This, of course, is the new tenant of risk management: We should never try to avoid all risks — we just need to make sure we are taking calculated risks with contingencies built in for failure.

Time’s Idea: TV Will Save the World
“In a lot of places, it’s the next best thing”

Globally, the biggest impediment to better disaster preparedness and building codes is poverty. Places like Haiti and rural China just don’t have the resources to mandate and enforce developed world standards for things like foundations and reinforced concrete.

Somewhere lower on the list of challenges — but no less worth striving to overcome — is the educational gap. More so than in the developing world, the United States and Europe have learned from their past disasters. A lot of this has come from in-depth, post-mortm investigations of disasters. And a lot of the demand for such investigations has always come from the proliferation of TV news and the fact that citizens are generally outraged that such calamities could happen. People want to know why people were allowed to die or houses were permitted to burn, and the impetus behind that outrage often comes from seeing the tragic images in moving picture form on TV.

Too much TV has been associated with violence, obesity and social isolation. But TV is having a positive impact on the lives of billions worldwide, and as the spread of mobile TV, video cameras and YouTube democratize both access and content, it will become an even greater force

Sure, a lot of TV is more candy than vegetables (think Jersey Shore, SportsCenter or American Idol), but if you are still among those who erroneously think that television will rot your brain, you obviously haven’t seen The Wire. Or Spike Lee’s When the Levees Broke, which premiered on HBO.

In related news, The Wire creator David Simon’s upcoming HBO show Treme will focus on the music scene in post-Katrina New Orleans. Expect something amazing that will speak on what was the worst “natural” disaster to hit this country.

And, yes, this was mostly just an excuse to make you watch the new trailer for Treme embedded below. (via Video Gum) (UPDATE: That trailer is no longer available … replacement video below. Don’t worry, it’s just as good. Probably even better.)

You can also view the other six “ideas for the next 10 years” over at Time.com. Let us know of any other major risk management-related concepts that stand out to you.

Global Hacking Scheme Broken Up

virus keyboard

Spanish officials are calling it the world’s biggest network of virus-infected computers. That’s right — 13 million computers were hacked and infected with a program that allowed for the theft of personal and financial data of unwitting citizens worldwide, in what investigators have termed the “Mariposa botnet.”

The culprits? Three Spaniards, ages 31, 30 and 25 who were arrested last week in Spain’s northern Vizcaya province. During a search of their homes and computers, police found personal information from more than 800,000 users.

The suspects “copied personal and financial data of individuals, companies and official institutions in more than 190 countries,” the Civil Guards’ statement said. In addition to gaining illegal access to personal and financial information, the virus would have permitted those controlling the system to mount a large cyberattack from the infected computers, a U.S. official said.

Apparently, the hacking was first detected in May by Defence Intelligence, a Canadian firm that develops software to monitor incoming and outgoing transmissions of every computer on a corporate network.

The botnet [or, a network of computers infected with a virus that can be controlled remotely without owners’ knowledge] included infected machines inside the offices of more than 40 major banks and a vast majority of the top companies on the Fortune 1000 index. Since its creation, Defence Intelligence has identified and helped to protect its customers against dozens of botnets and malicious software programs — with Mariposa botnet being the jewel in its crown.

Authorities are searching for a fourth suspect in this massive cybercrime. “Juan Salon of the Spanish Civil Guard’s cybercrime unit told reporters Wednesday investigators have learned the suspect’s Internet handle and that this person might be Venezuelan.”

Facebook Posts + Tweets = Possible Lawsuit

You may remember back in May when a Chicago resident tweeted about her property management company being OK with moldy apartments. That resident, Amanda Bonnen, was subsequently sued by Horizon Group Management for publishing a false and defamatory tweet on Twitter May 12.

The tweet read: “Who said sleeping in a moldy apartment was bad for you? Horizon realty think it’s okay.” Those two sentences sparked the suit in which Horizon sought $50,000 in damages, mostly reputation-related. The case was eventually dismissed this past January, with the judge claiming the tweet was “too vague to meet the legal standards of libel.”

Though it was dismissed, this one lawsuit opened the door to Twitter-related legal action. Soon to follow? Most likely lawsuits related to Facebook posts. Not only can tweeting or posting about another company get you in trouble, doing the same about the company for which you work can also pose a risk. As an article on MainJustice.com states:

“Our board members are talking about things like Facebook and Twitter, so we are definitely paying attention to social media,” said Haydee Olinger, the chief compliance officer for McDonald’s Corporation. Grace Renbarger, the chief ethics and compliance officer for Dell Computer, said she is constantly worried that something her employees say on Facebook or Twitter could hurt the company. “You don’t want people out there saying things that could be attributed to the company for liability purposes,” Renbarger said.

Because of the risk social media poses, the role of the chief compliance officer has grown to encompass the occasional or, in some cases, often, monitoring of employee’s Facebook and Twitter accounts. Tweeters and posters beware: big brother is watching!

wall of eyes

Billion-dollar Suit Against Chinese Gov, PC Makers

In what could be seen as a test case for U.S. companies, a small California-based software firm has filed a $2.2 billion copyright infringment suit against the People’s Republic of China, two Chinese software makers and seven major computer manufacturers.

The plaintiff in this groundbreaking case is Solid Oak Software, a family-owned firm in Santa Barbara. They make, among other things, software called CYBERsitter, which prevents children from viewing pornographic or violent content on the internet. Solid Oak claims that Chinese software makers and computer manufacturers stole 3,000 lines of code from their CYBERsitter program to create Green Dam Youth Escort software, which works similar to CYBERsitter in that it prevents users from viewing certain web pages. After Green Dam was created, the Chinese government mandated that all manufacturers bundle the software into any computer sold in China after July 1, 2009. This was the government’s way of restricting the public, young and old, from viewing various political and religious web sites.

The suit names the following defendants:

  • Sony
  • Toshiba
  • Lenovo Group
  • Acer
  • ASUSTeK Computer
  • BenQ Corp.
  • Haier Group
  • Zhengzhou Jinhui Computer System Engineering
  • Beijing Dazheng Human Language Technology Academy
  • The People’s Republic of China

Though the mandate involving Green Dam software’s installation on all new computers was lifted after the Obama administration warned China that the requirement could violate free-trade agreements, 56.5 million copies had been distributed by June 2009 alone. And with a $39.95 price on each CYBERsitter product, it seems that whether they win or lose the case, Solid Oak is losing out on profits. But we should also remember that win or lose, this case has the potential to pave the way for future copyright infringement cases of this nature.