Economic risks to preservation

15 Aug

(Draft 2)

Much effort has been put into digital preservation as a technical problem, and to addressing the technical risks. But apart from the Task Force, there has been little addressing preservation and curation as an economic problem. Part of that is addressing the economic risks.

Before discussing economic risks as such, it is worth rehearsing risk terminology. This is based on the ISO/IEC Guide 73[i]. The common language we use to discuss risk is ambiguous and confusing; in particular, the word “risk” is used in two different senses. It can mean simply the probability that something might happen (eg “there is a high risk of fire”). But in common speech “risk” is often extended to include the impact (eg “jaywalking is a big risk”, “nuclear power is too risky”, etc). To be clear, we aim to use the term “risk” as a combination of likelihood (or probability) and impact.

Strictly, risks are possible events that have likelihood and impact or outcome. It’s wrong to think of risks as always being bad: impact or outcome can be positive or negative. A risk with a positive outcome is the kind of risk we take when we invest in something (whether with money or personal time or effort), which is exactly what someone has to do for sustainable archives or information services! We must take risks; if we are too risk-averse we will stay in bed all day and die of bed-sores.

How do risks apply in this context?

In the context of economically sustainable digital preservation (curation?), risks could affect many different aspects. Risks could affect

  • The entire preservation service
  • All or some digital assets in the service
  • The creation of the service
  • The continuation of the service
  • The termination of the service
  • The succession or transformation from one incarnation of the service to another, whether in succession or in parallel, eg through the handoff process (including legal and other agreements), through migration of the assets, identifiers etc, through revised technology for the underlying service, or new owners or policies
  • The quality of the service

This list is inclusive rather than exhaustive.

What kinds of things are affected by economic risks?

We are most concerned with risks to resources, including funding, staffing, volunteer effort and so on. But risk can also affect:

  • Value perceptions, including returns on investment, tangible versus intangible value, differing “currencies” of value (versus cost), and the problem of public good versus private good.
  • Choices and decisions
  • Policies and policy changes.

Risks might include

  • Resource issues, eg failing to get sufficient initial investment, failing to get sufficient continuation resources, or resource timing problems, AKA “cash flow”
  • Value issues: uncertainty of value, or “soft” value; insufficient value, or poor return on investment (however calculated); losing perception of value; or lack of usable incentives
  • Demand issues: poor or low demand; unmeasured demand, or uncertain future demand
  • Rights issues: many, including orphan (unknown) rights; legal dispute on rights; rights needed but not available (eg request for rights denied)
  • Political/policy change.

Risk treatments

There are at least 4 things you can do about risk. They include:

  • Risk avoidance: stop the activity with the risk (eg only preserve PD material)
  • Risk reduction/mitigation: lower probability (eg improve procedures) or lower impact (eg get multiple resource streams)
  • Risk transfer: pass risk to another party (eg insurance!)
  • Risk acceptance: recognise the risk but decide to live with it.

Let’s emphasise again that the last of these, risk acceptance, is essential if you are even to run an archive or data service. Someone has to take the risk of starting this up and continuing it. If you’re sensible, however, you will certainly put in place some risk transfer and/or mitigation. Among other things, you should try to ascertain best practice for your mind of  service. And part of the point of our effort on economic sustainability is that you should also pay attention to expressing the value and impact of your service, and making sure this message gets through to the key decision-makers.

As usual, comments on these ideas are welcome. Thanks

[i] ISO/IEC. (2002). ISO/IEC Guide 73:2002 Risk management — Vocabulary — Guidelines for use in standards.

[Update to add links


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