Thursday, January 30, 2014

Needed More Than Ever

The enthusiasm for big data often results in overshoot [bold added]:
once the quants come into an industry and disrupt it, they often don’t know when to stop. They tend not to have decades of institutional knowledge about the field in which they have found themselves. And once they’re empowered, quants tend to create systems that favor something pretty close to cheating. As soon as managers pick a numerical metric as a way to measure whether they’re achieving their desired outcome, everybody starts maximizing that metric rather than doing the rest of their job.
Examples of overshoot, according to author Felix Salmon, can be found in police work (exclusive focus on number of arrests), education ("teaching to the test"), and finance (risk algorithms did not actually minimize risk). The amazing advances that have resulted from big data and quantitative analyses have made it tempting to focus on single measures, like net income or cholesterol count, as the measure of overall health. But widespread technology also amplifies the magnitude of potential disasters.

Judgment, experience, and human wisdom are harder to come by and appear to be needed more than ever.

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