On November 9, 2017, The PRS Group (PRS) and Queen’s University announced the establishment of an Artificial Intelligence Initiative that will develop and use sophisticated analytical tools and methods to transform the way political and country risk analysis has been conducted by investors, transnational firms, and research scientists. This Initiative is the first of its kind globally, and early-stage testing results have proved to be remarkable.
The collaboration positions Queen’s University to be the research and development hub for The PRS Group. Under this five-year collaboration, The PRS Group will leverage the expertise of Queen’s faculty and students, through research contracts and student internships, as well as the expertise and resources of the Centre for Advanced Computing at Queen’s, to broaden and deepen the company’s analytical capabilities, and to develop a pipeline of talent for its operations. The PRS Group will promote its collaboration with Queen’s to attract joint research and service contracts from its roster of international clients, including the world’s largest institutional investors, central banks, sovereign wealth funds, multinational corporations, and leading academic institutions.
Established in 1979, and with offices in Charleston, Syracuse, London (England), and Vancouver, The PRS Group is a global leader in quant-driven political risk and country risk forecasts. Originally the Political Risk Services division of Frost & Sullivan, Inc. and then of UK-based IBC Group (now known as Informa), the firm occupies a unique and key role in the risk sector through the application of two proprietary, quantifiable, and back-tested methodologies: Political Risk Services (PRS) and the International Country Risk Guide (ICRG). The company’s methods have been shown to be predictive of risk realizations by scholars at Duke University’s Fuqua School of Business, are used regularly by the IMF in its Working Papers and Country Reports, and have been recognized by the courts as dispositive in commercial litigation.
Queen’s University, one of Canada’s highly respected degree-granting institutions, is well known for its transformative educational experience coupled with the provision of novel insights and services to governments, and the development of partnerships with industry, globally and locally, to advance cutting-edge research and technologies. Located in Kingston, Ontario, Canada, Queen’s is a mid-sized university with several faculties and schools, as well as the Bader International Study Centre located in Herstmonceux, East Sussex, United Kingdom, more than 22,000 students, 800 faculty members, and plans to hire 200 new faculty over the next 5 years. Queen’s was recently recognized as a North American leader in global research and outreach noting accomplishments like Dr. Arthur B. McDonald’s Nobel Prize-winning work in physics, among others. “I am delighted to announce The PRS Group | Queen’s University Artificial Intelligence Initiative, says John Fisher, Interim Vice-Principal (Research) at Queen’s. The newly established Office of Partnerships and Innovation has been working with The PRS Group for the past year to facilitate the development of relationships at the institutional level, with specific departments and researchers, and with our Centre for Advanced Computing (CAC) at Queen’s. The collaboration with The PRS Group will provide faculty and students with valuable opportunities to engage with numerous organizations that rely on political risk analyses to inform their decision making.”
The CAC is well positioned to support this Initiative; aside from supporting “traditional” high performance computing, the CAC offers many added benefits such as high availability, high security, advanced application support, and the recently formed Cognitive Development Hub. The CAC has many established relationships with partners such as SOSCIP, the Ontario Brain Institute and IBM, which further extend the CAC’s capabilities.
“Our collaboration with Queen’s University positions The PRS Group to be the only quant-driven political risk firm that interfaces four decades of independently back-tested proprietary risk data with sophisticated algorithms and artificial intelligence”, says CEO Christopher McKee, a PhD graduate of Queen’s, who worked under the guidance of Professor Ronald L Watts, completing a dissertation that employed the Coasian theorem to jurisdictional and proprietary disputes to offshore mineral resources. “Our initial collaborations with the Centre for Advanced Computing at Queen’s have delivered very insightful analyses. Given the demand for PRS’s products - which are coming increasingly from the Middle East and Asia - we will market our Artificial Intelligence Initiative internationally. Already there has been interest from major financial institutions in New York, London, Dubai, and Hong Kong.”
The Cognitive Development Hub of the CAC will be working closely with PRS over the next five years investigating promising directions using artificial intelligence, that include: building natural language understanding tools for extracting information from news websites to automate the calculations of political risk factors; developing machine learning models for predicting future risk rating fluctuations; finding hidden relationships among countries to understand why the risk factors of some countries behave so similarly; and, finding hidden relationships among the risk factors to remove redundancy and to validate the accuracy of some factors. Integrating artificial intelligence in PRS’s operations will identify risk factors faster and more accurately, thus providing PRS and its clients with more timely insights to help direct future investments.
Head of the Queen’s Economics Department (QED), Huw Lloyd-Ellis sees several opportunities for faculty and students to work with The PRS Group. Lloyd-Ellis says, “A number of QED faculty and PhD students are engaged in applied research and econometrics methods research. Several faculty have interest in empirical cross-country, economic and political issues and use related data, others are engaged in work on financial risk management and regulation, and several faculty and students focus on developing new econometric and computational methods for analyzing time-series and cross-sectional data. Masters students are well-trained in standard conometric methods, and are required to undertake a research project each year. The collaboration with The PRS Group will provide our students with meaningful projects that represent real-world opportunities.”