Hal Varian, Chief Economist from Google, and Tim O'Reilly had a conversation centered around real time economics and being able to measure outputs to gauge success in a data-driven world. Hal has championed adaptive forecasting, or revising forecasts to take account of updated information where governments, or citizens, will have a real-time flow of data.
He makes the case that government should stop looking into the future and try better to understand what's going on now. For example, using Google Trends, a tool that analyzes search queries, we could see a spike in interest for the Cash for Clunkers program. It was clear to the Google that demand was likely to surpass the amount of vouchers the government had available. Sudden spikes in search queries can be used in predictive analysis of what might be on the horizon.
It's the kind of data analysis that companies like Visa and Wal-Mart are doing now. From the moment someone at a Walmart store brings a T-shirt to the checkout, the company automatically orders more of that shirt. Visa and Mastercard have loads of information on what individuals are buying and are building composite sketches of what consumers demand, Hal said. Google has launched a program called "Predicting the Present" using its tool Google Trends, where they take indicators from search queries and develop a snapshot on the health of the economy.
Take a few moments and watch this video:
This conversation can open your mind to some great possibilities!