Econometrics and credibility

Over the last few decades econometrics has grown from a niche marketing tool to a ‘must have’ for many. This growth has reflected the fact that it is a rich and rewarding technique that allows us to understand why consumers respond in the way that they do. It shows us what works, what doesn’t, and how to plan a more effective campaign.

Those of us who have been around a long time will have noticed how this small and specialised industry has changed. In the early pioneering days, many of the econometrics agencies that you see today were independent and smaller in size. They were finding their feet in a new world and employing a range of skillsets to solve the marketing questions of the day with data, statistics and clever thinking.

Fast forward to today and the industry looks very different, with most of those independent specialists now owned by the larger media groups and often embedded within planning teams. The company name might not have changed but ownership, priorities and ways of working often have.

Of course this is nothing more than a new industry maturing, consolidating and becoming more focused. It is perfectly normal and natural. However, with it comes a problem.

Automation makes us dumb 

There are many theories about how automation and artificial intelligence will affect the world we live in; one interesting idea came from an article in the Wall Street Journal a few years ago. The crux of their argument is that automation, and computers more specifically are changing the way work gets done.  

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This is nothing new: in the 1950s a Harvard Business School Graduate named James Bright studied the impact of automation in mechanical industries. He concluded that the overriding effect of automation was to “de-skill” workers rather than to “up-skill” them. He went on to say that: “Highly complex equipment” does not require “skilled operators”. The ‘skill’ can be built into the machine”.  

Wall Street Journal: “Yesterday’s machine operators are today’s computer operators” 

If we look back to ancient times we see progressive new ideas, such as writing, causing similar concerns for Socrates.     

“…this discovery of yours [writing] will create forgetfulness in the learners’ souls, because they will not use their memories; they will trust to the external written characters and not remember of themselves.” 

What do we see here? A very similar concern from a father of western philosophy that being able to write down our thoughts would erode our brains and our memories will fade into nothing. Now ask yourself when you write, or more likely type something today, do you wonder if it causing your memory to worsen? 

Credibility and human-centred automation  

We think econometrics has lost a little of its past pioneering spirit: systems and processes have taken over from the talents of people. Wouldn’t we all rather see attentive, engaged and ultimately challenged analysts, sharpening their skills and delivering rich insight? 

As the respected architect Juhani Pallasmaa noted: there is a danger that [through automation] we fall into the trap of “banal, lazy and uneventful designs that are void of intellect, imagination and emotion”. 

Econometrics has always been one for embracing technology and facing challenges in a thoughtful and occasionally provocative way. It’s important we don’t lose sight of the skills of people in our rush to automate. 

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