Last week we run the first workshop of the Forecasting Forum Scandinavia, hoping to start an ongoing discussion between academia and practice around forecasting and predictive analytics. The vision is for this to be the catalyst in:
- providing innovative solutions to real business problems, at a rigorous scientific standard;
- shorten the path to implementing innovative and impactful research to practice;
- create consortia between and within industry and academia to facilitate ambitious research by sharing know-how, resources, and risk.
The topic of the workshop the use of information from the business and market environment to enhance forecasts. You can find slides and recordings of all the talks in the forum’s LinkedIn group.
My talk focused on the academic perspective, and a gave a non-technical overview of:
- What are the elements of a “good” forecast? (I keep the quotation, as I did not touch upon loss functions and objectives.)
- Limitations of extrapolative forecasting and some motivations for using external predictors. (You won’t get me saying causal models! We are still so far away from being able to claim causality!)
- Potential variables to enhance your forecasts and relevant considerations.
You can find the slides here and a recording of the talk below.
A few words on the “we”. With David Fagersand, who is the CEO of Indicio Technologies, we share the view that there is a substantial gap in the interaction between academia and industry on forecasting and predictive analytics, at least in Sweden and neighbouring Scandinavia – although my experience is that this is a wider challenge (more on that below!). We both recognise that there is strength in putting different perspectives and objectives together, to keep some balance between academia and practice. I do not think it is contested that academia can be “too academic” at times, and practice “too practical” (see a previous opinion piece co-authored with Fotios Petropoulos here). Obviously, Indicio is a company and therefore for-profit. I nowadays work at a Skövde university in Sweden, that is a public university, which in line with my ethos for freely accessible knowledge and open-source. My personal view is that bringing these two sides together can only be beneficial! My view for the ideal evolution of initiative is to be less driven by individuals, and more by the interaction in the community. It would be great if organisations would openly speak about the challenges they face and provide the means to universities to help them solve them. It would also be great if more academics would get their hands dirty! And obviously outstanding if it is widely acknowledged that such an initiative to run requires both resources and speakers! So, a call for action for current and future members!
I will expand a bit on this. Over my academic career I had the luck to work with many great colleagues and some of the biggest companies internationally. Naturally, at every country the business culture and the academic attitude differs. It will come as no surprise than some foster impactful research and innovation more than others. I find Sweden to be a great place for this, with both companies and universities focusing more into how to get exciting work done, rather than how to split the pie – necessary, but let’s get the priorities right when you involve academia: we are not consultants (at that point!). I find that organisations (and that includes universities ironically!) often do not understand how resource intensive research has become. It needs time, very skilled people, computing resources, data and time. Did I mention time? More importantly, training new academics is critical, and that requires the investment by all industry, academia and state. Let me also add that the skill often does not come solely from academia. We are all smart people, so if we ask someone/a team to outsmart us all and solve a very difficult problem, at least let’s give then the resources!
I would not expect from academics to always get the economics right (unless they are economists? – of course we have the responsibility to get it right!), but if companies are into money making, they surely understand that there is no free lunch! We face great societal challenges, and we all need to play our part. Improving forecasts is not just fun (for academics), or impacting the bottom line (for companies), it is also important for a more sustainable society and environment in the large scheme of things, but also for meeting the needs of societies. The initiative is called Forecasting Forum Scandinavia, but I would so much like to see the name proving to be wrong and becoming an international community of people eager to solve problems, meet challenges, and contribute!