Category Archives: technology forecasting

Chinese economy, Federal Reserve policies and impacts, IT market analysis, Janet Yellen outlook, machine learning, technology forecasting

Links May 2014

May 8, 2014 Clive Jones

If there is a theme for this current Links page, it’s that trends spotted a while ago are maturing, becoming clearer.

So with the perennial topic of Big Data and predictive analytics, there is an excellent discussion in Algorithms Beat Intuition – the Evidence is Everywhere. There is no question – the machines are going to take over; it’s only a matter of time.

And, as far as freaky, far-out science, how about Scientists Create First Living Organism With ‘Artificial’ DNA.

Then there are China trends. Workers in China are better paid, have higher skills, and they are starting to use the strike. Striking Chinese Workers Are Headache for Nike, IBM, Secret Weapon for Beijing . This is a long way from the poor peasant women from rural areas living in dormitories, doing anything for five or ten dollars a day.

The Chinese dominance in the economic sphere continues, too, as noted by the Economist. Crowning the dragon – China will become the world’s largest economy by the end of the year

But there is the issue of the Chinese property bubble. China’s Property Bubble Has Already Popped, Report Says

Then, there are issues and trends of high importance surrounding the US Federal Reserve Bank. And I can think of nothing more important and noteworthy, than Alan Blinder’s recent comments.

Former Fed Leader Alan Blinder Sees Market-rattling Infighting at Central Bank

“The Fed may get more raucous about what to do next as tapering draws to a close,” Alan Blinder, a banking industry consultant and economics professor at Princeton University said in a speech to the Investment Management Consultants Association in Boston.

The cacophony is likely to “rattle the markets” beginning in late summer as traders debate how precipitously the Fed will turn from reducing its purchases of U.S. government debt and mortgage securities to actively selling it.

The Open Market Committee will announce its strategy in October or December, he said, but traders will begin focusing earlier on what will happen with rates as some members of the rate-setting panel begin openly contradicting Fed Chair Janet Yellen, he said.

Then, there are some other assorted links with good infographics, charts, or salient discussion.

Alibaba IPO Filing Indicates Yahoo Undervalued Heck of an interesting issue.

Twitter Is Here To Stay

Three Charts on Secular Stagnation Krugman toying with secular stagnation hypothesis.

Rethinking Property in the Digital Era Personal data should be viewed as property

Larry Summers Goes to Sleep After Introducing Piketty at Harvard Great pic. But I have to have sympathy for Summers, having attended my share of sleep-inducing presentations on important economics issues.

Turkey’s Institutions Problem from the Stockholm School of Economics, nice infographics, visual aids. Should go along with your note cards on an important emerging economy.

Post-Crash economics clashes with ‘econ tribe’ – economics students in England are proposing reform of the university economics course of study, but, as this link points out, this is an uphill battle and has been suggested before.

The Life of a Bond – everybody needs to know what is in this infographic.

Very Cool Video of Ocean Currents From NASA

survelllance society, technology forecasting

The Future, Technology, Hacking, Surveillance

April 24, 2014 Clive Jones

And now for something completely different.

As something of a technologist – at one time one of the few economists working directly in IT – I have this problem with revelations about surveillance of US citizens and the loss of privacy, threats from hacking, and so forth.

I basically believe that if something is technically possible, it will be done – somewhere, sometime.

So we can’t put the nuclear genie back in the box.

Similarly, I do not think that the full scope of bioengineering in the future is being considered or discussed. Science fiction is a better guide to the future, than are the usual sober discussions.

So when it comes to surveillance, security logic interfaces with almost limitless technical potential. “If we get all the cell phone data, we might find something that would save a city from a dirty bomb (or name your other threat).” Furthermore, with server farms and new storage capability, new encryption, it is technically possible to collect everything. So, “until that pesky Senator figures out this whole IT infrastructure (paid for out of black budget items), we’re just going to do it.”

So there you have it. The motives are to protect and to maintain standards of security we are used to. Of course, this entire system might be subverted to sinister purposes by a demagogue at some future time. “Sorry – no technical fix for that problem. But what the hey, we’re all good guys and regular gals and fellows here, eh?”

I find this discussion on Inventing the Future (on CoolTechNews) outstanding, well worth an hour or so. It’s easy to watch, as you get into it.

Obviously, there are going to be efforts to counter these invasions, even this annihilation, of privacy. For example, in England, listening in on the cell phone conversations of members of the Royal family is proving problematic to the Murdoch media combine. I wonder, too, whether Bill Gates appreciates having all his communications monitored by nameless persons and parties, despite his apparent support in a recent Rolling Stones interview.

But what about the privacy of business discussions? There’s got to be some pushback here, since there are moments in a negotiation or in putting together a takeover strategy, when leaking the mindset and details of one party could derail their efforts entirely.

So it seems to me that, in some sense, free market capitalism actually requires an envelope of privacy in dealings at some point. Otherwise, everything is reduced to a kind of level playing field.

So I do expect pushback to the surveillance society. Maybe new encryption systems, or an enclave concept – places or locales which are surveillance-free.

IT market analysis, technology forecasting

The Future of Digital- I

February 15, 2014 Clive Jones

The recent Business Insider presentation on the “Digital
Future” is outstanding. The slides are a paean to digital media, mobile, and more specifically Android, which appears to have won the platform wars – at least for the time being.

Here are some highlights.

BI charts the global internet population at just less than three billion, a figure which includes, however, almost all the more affluent consumers.

New media – Apple, Google, Amazon, Facebook, Yahoo – dominate the old media – 21^st Century Fox, CBS, Viacom, Time Warner, Comcast, and Disney.

Multiple devices and screens are key to the new media landscape from a hardware standpoint. As “connected devices,” smartphones and tablets now dominate PC’s. Sales of smartphones are still booming, and tablets are cannibalizing PCF’s.

Demand for “phablets” is skyrocketing, especially in Asia. PC manufacturers are taking a hit.

BI estimates one fifth of internet traffic is now via mobile devices.

The Chinese smartphone users are now twice the size of US market.

But it is with respect to the “platform wars” that the BI presentation takes the strongest stand. Their estimates suggest 80 percent of smartphones run Android, and 60 percent of tables.

They say Android has caught up in the app development department. The exhibit showing the “fragmentation” of Android caught my eye.

US digital advertising is now bigger than TV, and, according to BI, shows a 20 percent CAGR 2002-2012.

Newspaper ads have plummeted, as Google takes the lion’s share of digital advertising.

Here’ the link.

http://www.businessinsider.com/the-future-of-digital-2013-2013-11?op=1

You can convert the 134 slides in the BI presentation to a PDF file, if you register for a trial membership to BI services.

I’ll have more to say about these topics soon.

alternative technology, Big Data, Chinese economy, technology forecasting

Links – February 14

February 14, 2014 Clive Jones

Global Economy

Yellen Says Recovery in Labor Market Far From Complete – Highlights of Fed Chair Yellen’s recent testimony before the House Financial Services Committee. Message – continuity, steady as she goes unless a there is a major change in outlook.

OECD admits overstating growth forecasts amid eurozone crisis and global crash The Paris-based organisation said it repeatedly overestimated growth prospects for countries around the world between 2007 and 2012. The OECD revised down forecasts at the onset of the financial crisis, but by an insufficient degree, it said….

The biggest forecasting errors were made when looking at the prospects for the next year, rather than the current year.

10 Books for Understanding China’s Economy

Information Technology (IT)

Predicting Crowd Behavior with Big Public Data

Internet startups

Alternative Technology

World’s Largest Rooftop Farm Documents Incredible Growth High Above Brooklyn

bagging, Big Data, cell phone data analytics, data mining, data science, electric utility forecasting, ensemble forecasts, technology forecasting, utility load forecasting, Winters exponential smoothing

Analytics 2013 Conference in Florida

January 17, 2014 Clive Jones

Looking for case studies of data analytics or predictive analytics, or for Big Data applications?

You can hardly do better, on a first cut, than peruse the material now available from October’s Analytics 2013 Conference, held at the Hyatt Regency Hotel in Orlando, Florida.

Presented by SAS, dozens of presentations and posters from the Conference can be downloaded as zip files, unbundling as PDF files.

Download the conference presentations and poster presentations (.zip)

I also took an hour to look at the Keynote Presentation of Dr. Sven Crone of Lancaster University in the UK, now available on YouTube.

Crone, who also is affiliated with the Lancaster Centre for Forecasting, gave a Keynote which was, in places, fascinating, and technical and a little obscure elsewhere – worth watching if you time, or can run it in the background while you sort through your desk, for example.

A couple of slides caught my attention.

One segment gave concrete meaning to the explosion of data available to forecasters and analysts. For example, for electric power load forecasting, it used be the case that you had, perhaps, monthly total loads for the system or several of its parts, or perhaps daily system loads. Now, Crone notes the data to be modeled has increased by orders of magnitude, for example, with Smart Meters recording customer demand at fifteen minute intervals.

Another part of Crone’s talk which grabbed my attention was his discussion of forecasting techniques employed by 300 large manufacturing concerns, some apparently multinational in scale. The following graph – which is definitely obscure by virtue of its use of acronyms for types of forecasting systems, like SOP for Sales and Operation Planning – highlights that almost no company uses anything except the simplest methods for forecasting, relying largely on judgmental approaches. This aligns with a survey I once did which found almost no utilities used anything except the simplest per capita forecasting approaches. Perhaps things have changed now.

Crone suggests relying strictly on judgment becomes sort of silly in the face of the explosion of information now available to management.

Another theme Crone spins in an amusing, graphic way is that the workhorses of business forecasting, such as exponential smoothing, are really products from many decades ago. He uses funny pics of old business/office environments, asking whether this characterizes your business today.

The analytic meat of the presentation comes with exposition of bagging and boosting, as well as creative uses for k-means clustering in time series analysis.

At which point he descends into a technical wonderland of complexity.

Incidentally, Analytics 2014 is scheduled for Frankfurt, Germany June 4-5 this coming Spring.

Watch here for my follow-on post on boosting time series.

Big Data, financial forecasting, macroeconomic forecasting, technology forecasting

Links – 2014, Early January

January 4, 2014 Clive Jones

US and Global Economy

Bernanke sees headwinds fading as US poised for growth – happy talk about how good things are going to be as quantitative easing is “tapered.”

Slow Growth and Short Tails But Dr. Doom (Nouriel Roubini) is guardedly optimistic about 2014

The good news is that economic performance will pick up modestly in both advanced economies and emerging markets. The advanced economies, benefiting from a half-decade of painful private-sector deleveraging (households, banks, and non-financial firms), a smaller fiscal drag (with the exception of Japan), and maintenance of accommodative monetary policies, will grow at an annual pace closer to 1.9%. Moreover, so-called tail risks (low-probability, high-impact shocks) will be less salient in 2014. The threat, for example, of a eurozone implosion, another government shutdown or debt-ceiling fight in the United States, a hard landing in China, or a war between Israel and Iran over nuclear proliferation, will be far more subdued.

GOLDMAN: Here’s What Will Happen With GDP, Housing, The Fed, And Unemployment Next year Goldman Sachs chief economist Jan Hatzius writes: 10 Questions for 2014 – Jan Hatzius is very bullish on 2014!

Three big macro questions for 2014 Gavyn Davies – tapering QE, China, and the euro. Requires free registration to read.

The State of the Euro, In One Graph From Paul Krugman, the point being that the EU’s austerity policies have significantly worsened the debt ratios of Spain, Portugal, Ireland, Greece, and Italy, despite lower interest rates. (Click to enlarge)

Technology

JCal’s 2014 predictions: Intense competition for YouTube and a shake up in online video economics

Rumblings in the YouTube community in the midst of tremendous growth in video productions – interesting.

Do disruptive technologies really overturn market leadership?

Discusses tests of the idea that ..such technologies have the characteristic that they perform worse on an important metric (or metrics) than current market leading technologies. Of course, if that were it, then the technologies could hardly be called disruptive and would be confined, at best, to niche uses.

The second critical property of such technologies is that while they start behind on key metrics, they improve relatively rapidly and eventually come to outperform existing technologies on many metrics. It is there that disruptive technologies have their bite. Initially, they are poor performers and established firms would not want to integrate them into their products as they would disappoint their customers who happen to be most of the current market. However, when performance improves, the current technologies are displaced and established firms want to get in on the game. The problem is that they may be too late. In other words, Christensen’s prediction was that established firms would have legitimate “blind spots” with regard to disruptive technologies leaving room open for new entrants to come in, adopt those technologies and, ultimately, displace the established firms as market leaders.

Big Data – A Big Opportunity for Telecom Players

Today with sharp increase in online and mobile shopping with use of Apps, telecom companies have access to consumer buying behaviours and preference which are actually being used with real time geo-location and social network analysis to target consumers. Hmmm.

5 Reasons Why Big Data Will Crush Big Research

Traditional marketing research or “big research” focuses disproportionately on data collection. This mentality is a hold-over from the industry’s early post-WWII boom –when data was legitimately scarce. But times have changed dramatically since Sputnik went into orbit and the Ford Fairlane was the No. 1-selling car in America.

Here is why big data is going to win.

Reason 1: Big research is just too small…Reason 2 : Big research lacks relevance… Reason 3: Big research doesn’t handle complexity well… Reason 4: Big research’s skill sets are outdated… Reason 5: Big research lacks the will to change…

I know “market researchers” who fit the profile in this Forbes article, and who are more or less lost in the face of the new extent of data and techniques for its analysis. On the other hand, I hear from the grapevine that many executives and managers can’t really see what the Big Data guys in their company are doing. There are success stories on the Internet (see the previous post here, for example), but this may be best case. Worst case is a company splurges on the hardware to implement Big Data analytics, and the team just comes up with gibberish – very hard to understand relationships with no apparent business value.

Some 2013 Recaps

Top Scientific Discoveries of 2013

Humankind goes interstellar ..Genome editing ..Billions and billions of Earths

Global warming: a cause for the pause ..See-through brains ..Intergalactic Neutrinos ..A new meat-eating mammal

Pesticide controversy grows ..Making organs from stem cells ..Implantable electronics ..Dark matter shows up — or doesn’t ..Fears of the fathers

The 13 Most Important Charts of 2013

And finally, a miscellaneous item. Hedge funds apparently do beat the market, or at least companies operating in the tail of the performance distribution show distinctive characteristics.

How do Hedge Fund “Stars” Create Value? Evidence from Their Daily Trades

I estimate hedge fund performance by computing calendar-time transaction portfolios (see, e.g., Seasholes and Zhu, 2010) with holding periods ranging from 21 to 252 days. Across all holding periods, I find no evidence that the average or median hedge fund outperforms, after accounting for trading commissions. However, I find significant evidence of outperformance in the right-tail of the distribution. Specifically, bootstrap simulations indicate that the annual performance of the top 10-30% of hedge funds cannot be explained by luck. Similarly, I find that superior performance persists. The top 30% of hedge funds outperform by a statistically significant 0.25% per month over the subsequent year. In sharp contrast to my hedge fund findings, both bootstrap simulations and performance persistence tests fail to reveal any outperformance among non-hedge fund institutional investors….

My remaining tests investigate how outperforming hedge funds (i.e., “star” hedge funds) create value. My main findings can be summarized as follows. First, star hedge funds’ profits are concentrated over relatively short holding periods. Specifically, more than 25% (50%) of star hedge funds’ annual outperformance occurs within the first month (quarter) after a trade. Second, star hedge funds tend to be short-term contrarians with small price impacts. Third, the profits of star hedge funds are concentrated in their contrarian trades. Finally, the performance persistence of star hedge funds is substantially stronger among funds that follow contrarian strategies (or funds with small price impacts) and is not at all present for funds that follow momentum strategies (or funds with large price impacts).

Business Forecasting