The forecasting fallacy

Curated on Posted on by Stefaan Verhulst

Essay by Alex Murrell: “Marketers are prone to a prediction.

You’ll find them in the annual tirade of trend decks. In the PowerPoint projections of self-proclaimed prophets. In the feeds of forecasters and futurists. They crop up on every conference stage. They make their mark on every marketing magazine. And they work their way into every white paper.

To understand the extent of our forecasting fascination, I analysed the websites of three management consultancies looking for predictions with time frames ranging from 2025 to 2050. Whilst one prediction may be published multiple times, the size of the numbers still shocked me. Deloitte’s site makes 6904 predictions. McKinsey & Company make 4296. And Boston Consulting Group, 3679.

In total, these three companies’ websites include just shy of 15,000 predictions stretching out over the next 30 years.

But it doesn’t stop there.

My analysis finished in the year 2050 not because the predictions came to an end but because my enthusiasm did.

Search the sites and you’ll find forecasts stretching all the way to the year 2100. We’re still finding our feet in this century but some, it seems, already understand the next.

I believe the vast majority of these to be not forecasts but fantasies. Snake oil dressed up as science. Fiction masquerading as fact.

This article assesses how predictions have performed in five fields. It argues that poor projections have propagated throughout our society and proliferated throughout our industry. It argues that our fixation with forecasts is fundamentally flawed.

So instead of focussing on the future, let’s take a moment to look at the predictions of the past. Let’s see how our projections panned out….

Viewed through the lens of Tetlock, it becomes clear that the 15,000 predictions with which I began this article are not forecasts but fantasies.

The projections look precise. They sound scientific. But these forecasts are nothing more than delusions with decimal places. Snake oil dressed up as statistics. Fiction masquerading as fact. They provide a feeling of certainty but they deliver anything but.

In his 1998 book The Fortune Sellers, the business writer William A. Sherden quantified our consensual hallucination: 

“Each year the prediction industry showers us with $200 billion in (mostly erroneous) information. The forecasting track records for all types of experts are universally poor, whether we consider scientifically oriented professionals, such as economists, demographers, meteorologists, and seismologists, or psychic and astrological forecasters whose names are household words.” 

The comparison between professional predictors and fortune tellers is apt.

From tarot cards to tea leaves, palmistry to pyromancy, clear visions of cloudy futures have always been sold to susceptible audiences. 

Today, marketers are one such audience.

It’s time we opened our eyes….(More)”.

The Post-pandemic Future of Trust in Digital Governance

Curated on Posted on by Stefaan Verhulst

Essay by Teresa Scassa: “Even prior to the COVID-19 pandemic, “trust” was a key concept for governments as they asked citizens to make a leap of faith into an increasingly digital and data-driven society. Canada’s Digital Charter was billed as a tool for “building a foundation of trust.” Australia’s Data & Digital Council issued Trust Principles. Trust was a key theme in “Strengthening Digital Government,” a statement from the Organisation for Economic Co-operation and Development. Yet, in spite of this focus on trust, a 2017 study suggested disturbingly low levels of citizen trust in government’s handling of their data in the United Kingdom, the United States and Australia.

The COVID-19 pandemic has further laid bare this lack of trust in government. In the debates around contact-tracing apps it became clear that Western governments did not enjoy public trust when it came to data and technology. When they sought to use technology to support public health contact tracing during a pandemic, governments found that a lack of trust seriously constrained their options. Privacy advocates resisted contact-tracing technologies, raising concerns about surveillance and function creep. They had only to refer to the post-9/11 surveillance legacy to remind the public that “emergency” measures can easily become the new normal.

Working with privacy advocates, Google and Apple developed a fully decentralized model for contact tracing that largely left public health authorities out of the loop. Not trusting governments to set their own parameters for apps, Google and Apple dictated the rules. The Google-Apple Exposure Notification system is limited to only one app per country (creating challenges for Canada’s complicated federalism). It relies on Bluetooth only and does not collect location data. It requires full decentralization of data storage, demands that any app built on the protocol be used voluntarily and ensures post-pandemic decommissioning. Governments that saw value in collecting some centralized data — and possibly some GPS data — to support their data analyses and modelling found themselves with apps that operated less than optimally on Android or iOS platforms or that faced interoperability challenges with other apps in the “return to normal” phase….(More)”.

Using behavioral insights to make the most of emergency social protection cash transfers

Curated on Posted on by Stefaan Verhulst

Article by Laura Rawlings, Jessica Jean-Francois and Catherine MacLeod: “In response to the COVID-19 pandemic, countries across the globe have been adapting social assistance policies to support their populations. In fact, since March 2020, 139 countries and territories have planned, implemented, or adapted cash transfers to support their citizens. Cash transfers specifically make up about half of the social protection programs implemented to address the pandemic. Now more than ever, it’s crucial that such programs are designed to maximize impacts. Behavioral insights can be mobilized as a cost-effective way to help beneficiaries make the most out of the available support. The World Bank and ideas42 partnership on behavioral designs for cash transfer programs is helping countries achieve this goal.

Cash transfers are a key response instrument in the social protection toolkit—and for good reason. Cash transfers have been shown to generate a wide variety of positive benefits, from helping families invest in their children to promoting gender equality. However, we know from our previous work that in order to make the most out of cash transfers, recipients of any program (already facing challenging circumstances that compete for their attention) must undertake complex decisions and actions with their cash. These challenges are only magnified by the global pandemic. COVID-19 has wrought increased uncertainty around future employment and income, which makes calculations and planning to use cash transfer benefits all the more complex.

To help practitioners design programs that account for the complex thought processes and potential barriers recipients face, we mapped out their journey to effectively spend emergency social protection cash transfers. We also created simple, actionable guidance for program designers to put to use in maximizing their programs to help recipients use their cash transfer benefit to most effectively support families and reduce mid- to long-term financial volatility. 

For example, the first step is helping recipients understand what the transfer is for. For recipients who have not yet been impacted by financial instability, or indeed have never encountered a cash transfer before, such funds might seem like a gift or bonus, and recipients may spend it accordingly. Providing clear, simple framing or labelling the transfer may signal to recipients that they should use the cash not only for immediate needs, but also in ways that can help them protect investments in their family members’ human capital and jumpstart their livelihood after the crisis wanes….(More)”.

Winter is coming. Can cities use innovation to save ‘streateries’?

Curated on Posted on by Stefaan Verhulst

Bloomberg Cities: “Outdoor dining has been a summer savior in these COVID times, keeping restaurants and the people they employ afloat while bringing sidewalks and streets once hushed by stay-at-home orders back to life.

But with Labor Day now behind us, many city leaders and residents alike are asking, “What’s next?” “What becomes of the vibrant ‘streateries’ once winter comes rolling in?”

Perhaps it’s no surprise that Chicago, notorious for its frigid winters and whipping lakefront winds, is at the forefront of the hunt for an answer. The city recently launched the City of Chicago Winter Dining Challenge to get everyone from designers to dishwashers thinking up new ideas for how to do outdoor eating in the cold in a way that is both appealing and safe for customers and restaurant workers.

More intriguing is just how much interest the competition has generated, including nearly 650 entries from all over the world. There are dozens of takes on warming large patios and small dining pods, including approaches likened to greenhouses, igloos, and yurts; ideas for repurposing parking garages and city buses; furniture-based concepts with heated tables, seats and umbrellas, and even a Swiss-style fondue chalet.

The goal, said Samir Mayekar, Chicago’s Deputy Mayor for Economic and Neighborhood Development, is to surface ideas city leaders would never have thought of. Three winners will get $5,000 each and see their ideas piloted in neighborhoods across the city in October….(More)”.

The Road Back to College Is Paved with Barriers, but Behavioral Science Can Help Smooth the Way

Curated on Posted on by Stefaan Verhulst

Blog by Katherine Flaschen and Ben Castleman: “In order to create the most effective solutions, policymakers and educators need to better understand a fundamental question: Why do so many of these students, many of whom have already made substantial progress toward their degree, fail to return to college and graduate? …

With a better understanding of the barriers preventing people who intend to finish their degree from following through, policymakers and colleges can create solutions that meaningfully meet students’ needs and help them re-enroll. As states across the country face rising unemployment rates, it’s critical to design and test interventions that address these behavioral barriers and help thousands of citizens who are out of work due to the COVID-19 crisis consider their options for going back to school.

For example, colleges could provide monetary incentives to students for taking actions related to re-enrollment that overcome these barriers, such as speaking with an advisor, reviewing upcoming recommended courses and developing a course plan, and making an active choice about when to return to college. In addition, SCND students could be paired with current students to serve as peer mentors, both to provide support with the re-enrollment process and to hold them accountable for degree completion (especially if faced with difficult remaining classes). Community colleges could also encourage major employers of the SCND population in high-demand fields, like health care, to provide options for employees to finish their degree while working (e.g., via tuition reimbursement programs), translate degree attainment into concrete career returns, and identify representatives within the company, such as recent graduates, to promote re-enrollment and make it a more salient opportunity….(More)”.

Synthetic data: Unlocking the power of data and skills for machine learning

Curated on Posted on by Stefaan Verhulst

Karen Walker at Gov.UK: “Defence generates and holds a lot of data. We want to be able to get the best out of it, unlocking new insights that aren’t currently visible, through the use of innovative data science and analytics techniques tailored to defence’s specific needs. But this can be difficult because our data is often sensitive for a variety of reasons. For example, this might include information about the performance of particular vehicles, or personnel’s operational deployment details.

It is therefore often challenging to share data with experts who sit outside the Ministry of Defence, particularly amongst the wider data science community in government, small companies and academia. The use of synthetic data gives us a way to address this challenge and to benefit from the expertise of a wider range of people by creating datasets which aren’t sensitive. We have recently published a report from this work….(More)”.

Double image of original data and synthetic data in a 2D chart. The two images look almost identical

International Public Participation Models 1969-2020

Curated on Posted on by Stefaan Verhulst

Sally Hussey at BangTheTable: “Last year, Sherry R. Arnstein’s  “A Ladder of Citizen Participation” celebrated its 50th anniversary. Originally published in the Journal of American Planning Association (JAPA) and one of its most cited articles to date, the longevity and impact of Arnstein’s Ladder can be recognised in the emergence of 60 public participation models since its inception. 

Yet, Arnstein’s vision from 50 years ago bridges decades in more ways than one. Not only through its dynamic iteration in the history of public engagement frameworks and practices. Indeed, it provides a foundation for many of the central concepts that shape public engagement research and practice today. For just as current public participation spectrums continue to engender the work of shifting power in public decision-making – central to Arnstein’s vision – they also open out onto theories, methods and ideas that exist between the spectra.   

But the inception of Arnstein’s Ladder in 1969 coincided with a shift in focus of the role of ‘citizens’, or public, and the conception of ‘participation’. Published at a “major inflection point” in the United States, with the Civil Rights Revolution, Vietnam war protests, the devastation of urban renewal, urban riots (Watts Riots and Newark Riots, for instance) and the increasing awareness of global environmental and ecological disasters, it demarcates the shift in the activation of citizens. Outgoing JAPA editor, Professor of Community and Regional Planning, University of Texas, Austin, Sandra Rosenbloom recently notes: “One result of the tumultuous events and major societal changes challenging the country at that time was a greater focus on the role of citizens in determining their own destiny and that of the neighborhoods and communities in which they lived. Citizen participation became both a duty and a rallying cry, but one that Arnstein viewed with great scepticism.” 

While, in some countries, terminology has evolved to address exclusivity and divisive categorisation in the shift to from ‘citizen participation’ to ‘public engagement’, the link to contemporaneous challenges is evident in the need for people to determine their own destiny – to have their say – cutting across major changes posed by Black Lives Matter, climate chaos and increasing inequity resulting from population densification and urbanisation – not to mention the coronavirus pandemic that, in forcing a reset, prioritises equity considerations for marginalised and other equity-seeking groups and renewed efforts at fortifying community resilience. With democracy in crisis, public participation, it can be argued, has again become a “rallying cry” as governments scramble to connect to a disconnected public and, in a wake-up call to correct the balance of widespread mistrust, strive towards transparency, increased trust and legitimisation of public decisions.

As democratic societies across the globe increasingly commit to collaborative governance, public participation has thereby emerged as a rich arena. This includes the “deliberative wave” that has gained ground since 2010 that seeks ongoing, continuous and open dialogue and engagement between the public and public decision-makers. The recent focus on democratic innovations as a result of increased digitisation, too, emphasises a concern for the deepening of public participation in decision-making, where inclusive online engagement is one of the ways in which governments can engage communities. For benefits of online public engagement include improved governance, greater social cohesion, informed decision-making, community ownership, better responsiveness and transparency as well as increasing legitimacy of public decision-making. 

Grounded in the democratic notion that public decisions should be shaped by people and communities affected by those decisions, public participation models have emerged not only to better map engagement in practice and theory but to ensure that people can shape decisions that affect their everyday lives….(More)”.

How Integrated Data Can Support COVID-19 Crisis and Recovery

Curated on Posted on by Stefaan Verhulst

Blog by Actionable Intelligence for Social Policy (AISP): “…State and local leaders are called upon to respond to the immediate harms of COVID-19. Yet with a looming recession threatening to undo gains among marginalized groups — particularly the Black middle class — tools to understand and disrupt long-term impacts on economic mobility and well-being are also urgently needed.

Administrative data[3] — the information collected during the course of routine service delivery, program administration, and business operations — provide an essential tool to help policymakers, community leaders, and researchers understand short- and long-term impacts of the pandemic. Several jurisdictions now have the capacity to link administrative data across programs in order to better understand how individuals interact with multiple systems, study longitudinal outcomes, and identify vulnerable subpopulations. As the COVID-19 crisis reveals weaknesses in the U.S. social safety net, states and localities with integrated administrative data infrastructure can use their capacity to identify populations and needs otherwise overlooked. Youth who “age out” of the child welfare system or individuals experiencing chronic homelessness often remain invisible when using traditional methods, aggregate data, or administrative records from a single source.

This blogpost demonstrates how nimble state and local data integration efforts have leveraged their capacity to quickly respond to and understand the impacts of COVID-19, while also reflecting on what can be done to mitigate harm and shift thinking about social welfare and the safety net….(More)”.

Personal data, public data, privacy & power: GDPR & company data

Curated on Posted on by Stefaan Verhulst

Open Corporates: “…there are three other aspects which are relevant when talking about access to EU company data.

Cargo-culting GDPR

The first, is a tendency to take this complex and subtle legislation that is GDPR and use a poorly understood version in other legislation and regulation, even if that regulation is already covered by GDPR. This actually undermines the GDPR regime, and prevents it from working effectively, and should strongly be resisted. In the tech world, such approaches are called ‘cargo-culting’.

Similarly GDPR is often used as an excuse for not releasing company information as open data, even when the same data is being sold to third parties apparently without concerns — if one is covered by GDPR, the other certainly should be.

Widened power asymmetries

The second issue is the unintended consequences of GDPR, specifically the way it increases asymmetries of power and agency. For example, something like the so-called Right To Be Forgotten takes very significant resources to implement, and so actually strengthens the position of the giant tech companies — for such companies, investing millions in large teams to decide who should and should not be given the Right To Be Forgotten is just a relatively small cost of doing business.

Another issue is the growth of a whole new industry dedicated to removing traces of people’s past from the internet (2), which is also increasing the asymmetries of power. The vast majority of people are not directors of companies, or beneficial owners, and it is only the relatively rich and powerful (including politicians and criminals) who can afford lawyers to stifle free speech, or remove parts of their past they would rather not be there, from business failures to associations with criminals.

OpenCorporates, for example, was threatened with a lawsuit from a member of one of the wealthiest families in Europe for reproducing a gazette notice from the Luxembourg official gazette (a publication that contains public notices). We refused to back down, believing we had a good case in law and in the public interest, and the other side gave up. But such so-called SLAPP suits are becoming increasingly common, although unlike many US states there are currently no defences in place to resist these in the EU, despite pressure from civil society to address this….

At the same time, the automatic assumption that all Personally Identifiable Information (PII), someone’s name for example, is private is highly problematic, confusing both citizens and policy makers, and further undermining democracies and fair societies. As an obvious case, it’s critical that we know the names of our elected representatives, and those in positions of power, otherwise we would have an opaque society where decisions are made by nameless individuals with opaque agendas and personal interests — such as a leader awarding a contract to their brother’s company, for example.

As the diagram below illustrates, there is some personally identifiable information that it’s strongly in the public interest to know. Take the director or beneficial owner of a company, for example, of course their details are PII — clearly you need to know their name (and other information too), otherwise what actually do you know about them, or the company (only that some unnamed individual has been given special protection under law to be shielded from the company’s debts and actions, and yet can benefit from its profits)?

On the other hand, much of the data which is truly about our privacy — the profiles, inferences and scores that companies store on us — is explicitly outside GDPR, if it doesn’t contain PII.

Image for post

Hopefully, as awareness of the issues increases, we will develop a more nuanced, deeper, understanding of privacy, such that case law around GDPR, and successors to this legislation begin to rebalance and case law starts to bring clarity to the ambiguities of the GDPR….(More)”.

The EU is launching a market for personal data. Here’s what that means for privacy.

Curated on Posted on by Stefaan Verhulst

Anna Artyushina at MIT Tech Review: “The European Union has long been a trendsetter in privacy regulation. Its General Data Protection Regulation (GDPR) and stringent antitrust laws have inspired new legislation around the world. For decades, the EU has codified protections on personal data and fought against what it viewed as commercial exploitation of private information, proudly positioning its regulations in contrast to the light-touch privacy policies in the United States.

The new European data governance strategy (pdf) takes a fundamentally different approach. With it, the EU will become an active player in facilitating the use and monetization of its citizens’ personal data. Unveiled by the European Commission in February 2020, the strategy outlines policy measures and investments to be rolled out in the next five years.

This new strategy represents a radical shift in the EU’s focus, from protecting individual privacy to promoting data sharing as a civic duty. Specifically, it will create a pan-European market for personal data through a mechanism called a data trust. A data trust is a steward that manages people’s data on their behalf and has fiduciary duties toward its clients.

The EU’s new plan considers personal data to be a key asset for Europe. However, this approach raises some questions. First, the EU’s intent to profit from the personal data it collects puts European governments in a weak position to regulate the industry. Second, the improper use of data trusts can actually deprive citizens of their rights to their own data.

The Trusts Project, the first initiative put forth by the new EU policies, will be implemented by 2022. With a €7 million budget, it will set up a pan-European pool of personal and nonpersonal information that should become a one-stop shop for businesses and governments looking to access citizens’ information.

Global technology companies will not be allowed to store or move Europeans’ data. Instead, they will be required to access it via the trusts. Citizens will collect “data dividends,” which haven’t been clearly defined but could include monetary or nonmonetary payments from companies that use their personal data. With the EU’s roughly 500 million citizens poised to become data sources, the trusts will create the world’s largest data market.

For citizens, this means the data created by them and about them will be held in public servers and managed by data trusts. The European Commission envisions the trusts as a way to help European businesses and governments reuse and extract value from the massive amounts of data produced across the region, and to help European citizens benefit from their information. The project documentation, however, does not specify how individuals will be compensated.

Data trusts were first proposed by internet pioneer Sir Tim Berners Lee in 2018, and the concept has drawn considerable interest since then. Just like the trusts used to manage one’s property, data trusts may serve different purposes: they can be for-profit enterprises, or they can be set up for data storage and protection, or to work for a charitable cause.

IBM and Mastercard have built a data trust to manage the financial information of their European clients in Ireland; the UK and Canada have employed data trusts to stimulate the growth of the AI industries there; and recently, India announced plans to establish its own public data trust to spur the growth of technology companies.

The new EU project is modeled on Austria’s digital system, which keeps track of information produced by and about its citizens by assigning them unique identifiers and storing the data in public repositories.

Unfortunately, data trusts do not guarantee more transparency. The trust is governed by a charter created by the trust’s settlor, and its rules can be made to prioritize someone’s interests. The trust is run by a board of directors, which means a party that has more seats gains significant control.

The Trusts Project is bound to face some governance issues of its own. Public and private actors often do not see eye to eye when it comes to running critical infrastructure or managing valuable assets. Technology companies tend to favor policies that create opportunity for their own products and services. Caught in a conflict of interest, Europe may overlook the question of privacy….(More)”.