Archive for the 'Forecasting' Category

In defence of futures thinking

Published
by
peter
on 2010-08-18
in Argumentation, Computer Science, Decision theory, Forecasting, Marketing strategy, Planning, Prophecy, Religion and Uncertainty
. Closed

Norm at Normblog has a post defending theology as a legitimate area of academic inquiry, after an attack on theology by Oliver Kamm.  (Since OK’s post is behind a paywall, I have not read it, so my comments here may be awry with respect to that post.)  Norm argues, very correctly, that it is legitimate for theology, considered as a branch of philosophy to, inter alia, reflect on the properties of entities whose existence has not yet been proven.  In strong support of Norm, let me add:  Not just in philosophy!

In business strategy, good decision-making requires consideration of the consequences of potential actions, which in turn requires the consideration of the potential actions of other actors and stakeholders in response to the first set of actions.  These actors may include entities whose existence is not yet known or even suspected, for example, future competitors to a product whose launch creates a new product category.   Why, there’s even a whole branch of strategy analysis, devoted to scenario planning, a discipline that began in the military analysis of alternative post-nuclear worlds, and whose very essence involves the creation of imagined futures (for forecasting and prognosis) and/or imagined pasts (for diagnosis and analysis).   Every good air-crash investigation, medical diagnosis, and police homicide investigation, for instance, involves the creation of imagined alternative pasts, and often the creation of imaginary entities in those imagined pasts, whose fictional attributes we may explore at length.   Arguably, in one widespread view of the philosophy of mathematics, pure mathematicians do nothing but explore the attributes of entities without material existence.

And not just in business, medicine, the military, and the professions.   In computer software engineering, no new software system development is complete without due and rigorous consideration of the likely actions of users or other actors with and on the system, for example.   Users and actors here include those who are the intended target users of the system, as well as malevolent or whimsical or poorly-behaved or bug-ridden others, both human and virtual, not all of whom may even exist when the system is first developed or put into production.      If creative articulation and manipulation of imaginary futures (possible or impossible) is to be outlawed, not only would we have no literary fiction or much poetry, we’d also have few working software systems either.




As we once thought

Published
by
peter
on 2010-08-17
in AI, Computer Science, Computer technology, Computing-as-interaction, Forecasting, Logic and Mathematics
. Closed

The Internet, the World-Wide-Web and hypertext were all forecast by Vannevar Bush, in a July 1945 article for The Atlantic, entitled  As We May Think.  Perhaps this is not completely surprising since Bush had a strong influence on WW II and post-war military-industrial technology policy, as Director of the US Government Office of Scientific Research and Development.  Because of his influence, his forecasts may to some extent have been self-fulfilling.

However, his article also predicted automated machine reasoning using both logic programming, the computational use of formal logic, and computational argumentation, the formal representation and manipulation of arguments.  These areas are both now important domains of AI and computer science which developed first in Europe and which still much stronger there than in the USA.   An excerpt:

The scientist, however, is not the only person who manipulates data and examines the world about him by the use of logical processes, although he sometimes preserves this appearance by adopting into the fold anyone who becomes logical, much in the manner in which a British labor leader is elevated to knighthood. Whenever logical processes of thought are employed—that is, whenever thought for a time runs along an accepted groove—there is an opportunity for the machine. Formal logic used to be a keen instrument in the hands of the teacher in his trying of students’ souls. It is readily possible to construct a machine which will manipulate premises in accordance with formal logic, simply by the clever use of relay circuits. Put a set of premises into such a device and turn the crank, and it will readily pass out conclusion after conclusion, all in accordance with logical law, and with no more slips than would be expected of a keyboard adding machine.

Logic can become enormously difficult, and it would undoubtedly be well to produce more assurance in its use. The machines for higher analysis have usually been equation solvers. Ideas are beginning to appear for equation transformers, which will rearrange the relationship expressed by an equation in accordance with strict and rather advanced logic. Progress is inhibited by the exceedingly crude way in which mathematicians express their relationships. They employ a symbolism which grew like Topsy and has little consistency; a strange fact in that most logical field.

A new symbolism, probably positional, must apparently precede the reduction of mathematical transformations to machine processes. Then, on beyond the strict logic of the mathematician, lies the application of logic in everyday affairs. We may some day click off arguments on a machine with the same assurance that we now enter sales on a cash register. But the machine of logic will not look like a cash register, even of the streamlined model.”

Edinburgh sociologist, Donald MacKenzie, wrote a nice history and sociology of logic programming and the use of logic of computer science, Mechanizing Proof: Computing, Risk, and Trust.  The only flaw of this fascinating book is an apparent misunderstanding throughout that theorem-proving by machines  refers only to proving (or not) of theorems in mathematics.    Rather, theorem-proving in AI refers to proving claims in any domain of knowledge represented by a formal, logical language.    Medical expert systems, for example, may use theorem-proving techniques to infer the presence of a particular disease in a patient; the claims being proved (or not) are theorems of the formal language representing the domain, not necessarily mathematical theorems.

References:

Donald MacKenzie [2001]:  Mechanizing Proof: Computing, Risk, and Trust (2001).  Cambridge, MA, USA:  MIT Press.

Vannevar Bush [1945]:  As we may think.  The Atlantic, July 1945.

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Vale: Sol Encel

Published
by
peter
on 2010-08-06
in Forecasting, Market planning, Obituaries and Prophecy
. Closed

I have just learnt of the death last  month of Sol Encel, Emeritus Professor of Sociology at the University of New South Wales, and a leading Australian sociologist, scenario planner, and futures thinker.    I took a course on futurology with him two decades ago, and it was one of the most interesting courses I ever studied.  This was  not due to Encel himself, at least not directly, who appeared in human form only at the first lecture.

He told us he was a very busy man, and would certainly not have the time to spare to attend any of the subsequent lectures in the course.  Instead, he had arranged a series of guest lectures for us, on a variety of topics related to futures studies, futurology, and forecasting.  Because he was genuinely important, his professional network was immense and impressive, and so the guest speakers he had invited were a diverse group of prominent people, from different industries, academic disciplines, professions, politics and organizations, each with interesting perspectives or experiences on the topic of futures and prognosis.  The talks they gave were absolutely fascinating.

To accommodate the guest speakers, the lectures were held in the early evening, after normal working hours.  Because of this unusual timing, and because the course assessment comprised only an essay, student attendance at the lectures soon fell sharply.  Often I turned up to find I was the only student present.   These small classes presented superb opportunities to meet and talk with the guest speakers, conversations that usually adjourned to a cafe or a bar nearby.  I learnt a great deal about the subject of forecasting, futures, strategic planning, and prognosis, particularly in real organizations with real stakeholders, from these interactions.  Since he chose these guests, I thus sincerely count Sol Encel as one of the important influences on my thinking about futures.

Here, in a tribute from the Australian Broadcasting Commission, is a radio broadcast Encel made in 1981 about Andrei Sakharov. It is interesting that there appears to have been speculation in the West then has to how the so-called father of the Soviet nuclear bomb could have become a supporter of dissidents.   This fact worried, too, the KGB, whose answer was one Vadim Delone.  And here, almost a month after Solomon Encel’s death, is his obituary in the Sydney Morning Herald.  One wonders why this took so long to be published.

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Complex Decisions

Published
by
peter
on 2010-06-27
in Decision theory, Economics, Forecasting, Game theory, Joint-Action Society, Market planning, Military strategy, Planning, Project Management and Team working
. Closed

Most real-world business decisions are considerably more complex than the examples presented by academics in decision theory and game theory. What makes some decisions more complex than others? Here I list some features, not all of which are present in all decision situations.

Continue reading ‘Complex Decisions’

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Straitjackets of Standards

Published
by
peter
on 2009-09-23
in Computer Science, Computer technology, Creativity and Forecasting
. Closed

This week I was invited to participate as an expert in a Delphi study of The Future Internet, being undertaken by an EC-funded research project.   One of the aims of the project is to identify multiple plausible future scenarios for the socio-economic role(s) of the Internet and related technologies, after which the project aim to reach a consensus on a small number of these scenarios.  Although the documents I saw were unclear as to exactly which population this consensus was to be reached among, I presume it was intended to be a consensus of the participants in the Delphi Study.

I have a profound philosophical disagreement with this objective, and indeed with most of the EC’s many efforts in standardization.   Tim Berners-Lee invented Hyper-Text Transfer Protocol (HTTP), for example, in order to enable physicists to publish their research documents to one another in a manner which enabled author-control of document appearance.    Like most new technologies. HTTP was not invented for the many other uses to which it has since been put; indeed, many of these other applications have required hacks or fudges to HTTP in order to work.  For example, because HTTP does not keep track of the state of a request, fudges such as cookies are needed.  If we had all been in consensual agreement with The Greatest Living Briton about the purposes of HTTP, we would have no e-commerce, no blogging, no social networking, no easy remote access to databases, no large-scale distributed collaborations, no easy action-at-a-distance, in short no transformation of our society and life these last two decades, just the broadcast publishing of text documents. 

Let us put aside this childish, warm-and-fuzzy, touchy-feely seeking after consensus.  Our society benefits most from a diversity of opinions and strong disagreements, a hundred flowers blooming, a cacophony of voices in the words of Oliver Wendell Holmes.  This is particularly true of opinions regarding the uses and applications of innovations.   Yet the EC persists, in some recalcitrant chasing after illusive certainty, in trying to force us all into straitjackets of standards and equal practice.    These efforts are misguided and wrong-headed, and deserve to fail.

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Myopic utilitarianism

Published
by
peter
on 2009-09-23
in Computer Science, Computer technology, Forecasting, History, Logic, Mathematics and Rhetoric
. Closed

What are the odds, eh?  On the same day that the Guardian publishes an obituary of theoretical computer scientist, Peter Landin (1930-2009), pioneer of the use of Alonzo Church’s lambda calculus as a formal semantics for computer programs, they also report that the Government is planning only to fund research which has relevance  to the real-world.  This is GREAT NEWS for philosophers and pure mathematicians! 

What might have seemed, for example,  mere pointless musings on the correct way to undertake reasoning – by Aristotle, by Islamic and Roman Catholic medieval theologians, by numerous English, Irish and American abstract mathematicians in the 19th century, by an entire generation of Polish logicians before World War II, and by those real-world men-of-action Gottlob Frege, Bertrand Russell, Ludwig Wittgenstein and Alonzo Church – turned out to be EXTREMELY USEFUL for the design and engineering of electronic computers.   Despite Russell’s Zen-influenced personal motto – “Just do!  Don’t think!” (later adopted by IBM) – his work turned out to be useful after all.   I can see the British research funding agencies right now, using their sophisticated and proven prognostication procedures to calculate the society-wide economic and social benefits we should expect to see from our current research efforts over the next 2300 years  – ie, the length of time that Aristotle’s research on logic took to be implemented in technology.   Thank goodness our politicians have shown no myopic utilitarianism this last couple of centuries, eh what?!

All while this man apparently received no direct state or commercial research funding for his efforts as a computer pioneer, playing with “pointless” abstractions like the lambda calculus.

And Normblog also comments.

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Bonuses yet again

Published
by
peter
on 2009-09-09
in Africa, Corporate culture, Decision theory, Forecasting, Market planning, Planning and Project Management
. Closed

Alex Goodall, over at A Swift Blow to the Head, has written another angry post about the bonuses paid to financial sector staff. I’ve been in several minds about responding, since my views seem to be decidedly minority ones in our present environment, and because there seems to be so much anger abroad on this topic.  But so much that is written and said, including by intelligent, reasonable people such as Alex, mis-understands the topic, that I feel a response is again needed.  It behooves none of us to make policy on the basis of anger and ignorance.

Continue reading ‘Bonuses yet again’




Social forecasting: Doppio Software

Published
by
peter
on 2009-09-08
in Decision theory, Forecasting, Joint-Action Society, Manufacturing, Market planning and Prophecy
. 1 Comment

Five years ago, back in the antediluvian era of Web 2.0 (the web as enabler and facilitator of social networks), we had the idea of  social-network forecasting.  We developed a product to enable a group of people to share and aggregate their forecasts of something, via the web.  Because reducing greenhouse gases were also becoming flavour-du-jour, we applied these ideas to social forecasts of the price for the European Union’s carbon emission permits, in a nifty product we called Prophets-360.  Sadly, due mainly to poor regulatory design of the European carbon emission market, supply greatly outstripped demand for emissions permits, and the price of permits fell quickly and has mostly stayed fallen.  A flat curve is not difficult to predict, and certainly there was little value in comparing one person’s forecast with that of another.  Our venture was also felled.

But now the second generation of social networking forecasting tools has arrived.  I see that a French start-up, Doppio Software, has recently launched publicly.   They appear to have a product which has several advantages over ours:

  • Doppio Software is focused on forecasting demand along a supply chain.  This means the forecasting objective is very tactical, not the long-term strategic forecasting that CO2 emission permit prices became.   In the present economic climate, short-term tactical success is certainly more compelling to business customers than even looking five years hence.
  • The relevant social network for a supply chain is a much stronger community of interest than the amorphous groups we had in mind for Prophets-360.  Firstly, this community already exists (for each chain), and does not need to be created.  Secondly, the members of the community by definition have differential access to information, on the basis of their different positions up and down the chain.  Thirdly, although the interests of the partners in a supply chain are not identical, these interests are mutually-reinforcing:  everyone in the chain benefits if the chain itself is more successful at forecasting throughput.
  • In addition, Team Doppio (the Doppiogangers?) appear to have included a very compelling value-add:  their own automated modeling of causal relationships between the target demand variables of each client and general macro-economic variables, using  semantic-web data and qualitative modeling technologies from AI.  Only the largest manufacturing companies can afford their own econometricians, and such people will normally only be able to hand-craft models for the most important variables.  There are few companies IMO who would not benefit from Doppio’s offer here.

Of course, I’ve not seen the Doppio interface and a lot will hinge on its ease-of-use (as with all software aimed at business users).  But this offer appears to be very sophisticated, well-crafted and compelling, combining social network forecasting, intelligent causal modeling and semantic web technologies.

Well done, Team Doppio!  I wish you every success with this product!

PS:  I have just learnt that “doppio” means “double”, which makes it a very apposite name for this application – forecasts considered by many people, across their human network.  Neat!  (2009-09-16)

Article in The Observer (UK) about Doppio 2009-09-06 here. And here is an AFP TV news story (2009-09-15) about Doppio co-founder, Edouard d’Archimbaud.

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The future is not what it was

Published
by
peter
on 2009-06-07
in Computer technology, Consumer Behaviour, Culture, Forecasting, Prophecy and Telecommunications
. Closed

The Internet, as imagined in 1969, complete with free sexism. (Hat tip:  SW).




Black swans of trespass

Published
by
peter
on 2009-04-08
in Decision theory, Economics, Forecasting and Uncertainty
. Closed

gould-blackswan

Nassim Taleb has an article in the FinTimes presenting ten principles he believes would reduce the occurrence of rare, catastrophic events (events he has taken to calling black swans).  Many of his principles are not actionable, and several are ill-advised.  Take, for instance, # 3:

3. People who were driving a school bus blindfolded (and crashed it) should never be given a new bus.

If this principle was applied, the bus would have no drivers at all.   All of us are driving blindfolded, with our only guide to the road ahead being what we can apprehend from the rear-view mirror.  Past performance, as they say, is no guide to the future direction of the road.

Or take #6:

6. Do not give children sticks of dynamite, even if they come with a warning.  Complex derivatives need to be banned because nobody understands them and few are rational enough to know it. Citizens must be protected from themselves, from bankers selling them “hedging” products, and from gullible regulators who listen to economic theorists.

Well, what precisely is “complex”?  Surely, Dr Taleb is not suggesting the banning of plain futures and options, as these serve a valuable function in our economy (enabling the parceling and trading of risk).  But even these are too complex for some people (such as those farmers, dentists, and local government officials currently with burnt fingers), and surely such people need protection from themselves much more so than the quant-jocks and their masters on Wall Street.  So, where would one draw the line between allowed derivative and disallowed? 

Once again, it appears there has been a mis-understanding of the cause of the recent problems.  It is not complex derivatives per se that are the problem, but the fact that many of these financial instruments have, unusually, been highly-correlated.  Thus, the failure of one instrument (and subsequently, one bank) brings down all the others with it — there is a systemic risk as well as a participant risk involved in their use.   Dr Taleb, who has long been a critic of the unthinking use of Gaussian models in finance, I am sure realises this.

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