From addressing climate change to adjusting interest rates, just about every job, in every industry, is dependent on technology – and those who understand it. For this, mathematical proficiency is a crucial prerequisite.
As Europe emerges from the grip of a heatwave – its worst on record – the reality of climate change is getting uncomfortably close. This is a uniquely human challenge, but solving it will require some deft mathematics.
Climate change poses a severe economic challenge to our future. Aside from direct losses due to floods, earthquakes and droughts, there are potentially substantial losses involved in financing the green revolution. Not only does capital need to be allocated for new technologies to reduce emissions, but there may be losses arising from existing capital investment in infrastructure and assets that are no longer needed. All of which will involve a massive re-allocation of financial flows. One of the big questions besetting the world economy now is how fast can this be done in such a way that it does not cause financial instability?
This was also one of the questions that a postgraduate student team wrestled with at the 6th Financial Mathematics Team Challenge (FMTC) hosted by the African Institute of Financial Markets and Risk Management (AIFMRM) at UCT this July. This annual event assembles teams of talented students from global universities to solve pressing real-world problems – and the scope of the challenges they engage with are indicative of the all-pervasiveness of mathematics in the world today.
Mathematics is an essential component in understanding the science of climate change and most other areas of commerce and industry. Professor Matheus Grasselli, Chair of the Department of Mathematics and Statistics at McMaster University in Canada, says that his team of FMTC students were examining and analyzing the many variables of climate change, and the complex interactions between them and the economy. Any plausible model resulting from their efforts may provide a mechanism to manage the effect. “This is essential for proposing policy changes or providing scenario planning for industry.”
You might think that this work is highly specialised and has nothing to do with securing a “regular job” or choosing a career in a creative field. However, the days of only needing a good mathematics degree for a career in the financial sector are gone, says Professor Andrea Macrina, Director of the Financial Mathematics programme at University College London and Adjunct Professor at AIFMRM.
Today’s world is dependent on technology – and the mathematical skill that underpins it, he asserts. “This is completely pervasive. For example, social media is a gigantic mathematical machine, and any business needs people who understand how it works. In the UK, large online retailers are hiring or consulting mathematicians and statisticians – not marketing specialists or graphic designers – to understand their target market better and how to reach them.”