Saturday, 16 March 2019

Why study economics? Amazon edition...

I've written a number of posts about opportunities for economics graduates in tech companies (see the list at the end of this post). Earlier this week, a CNN article covered economists in Amazon:
The company has turned so many businesses, from retailing to cloud computing, inside out. Now Amazon is upending the traditional role of economists within companies, as well as the field of economics...
At other companies, economists are often clustered in a small team, but at Amazon, they are integrated into many teams across the company. In a glossy recruiting brochure, Amazon describes how its economists help build risk models for lending to third-party sellers, advise on product design and engagement tracking for devices like Alexa and Kindle, help target customers for its booming cloud services business, and forecast server capacity needs for the consumer website.
Among the 46 jobs and internships currently posted for economists on Amazon's hiring website, there are positions open for economists to help fine-tune seller pricing, figure out the best way to route trucks through Amazon's vast distribution network and identify the characteristics of top-performing talent in order to make the best hires.
For example, Amazon runs a program called Connections, which sends out small questionnaires to employees: Does your work provide you with opportunities to learn new things? Does your team always put the customer first? How often does bureaucracy get in the way of your ability to deliver results?
To improve that feedback, Amazon tries out interventions like training managers to interact better with their subordinates. Originally, the company brought on a team of psychologists, other scientists and product managers, but before long, it became apparent that they weren't well suited to achieving what Amazon was ultimately after: Better performance. Economists, by contrast, were able to analyze which interventions led to higher worker productivity.
"The psychologists had a really hard time at Amazon, because they weren't trained in what economists are trained in, which is how this relates to profitability," said one former Amazon economist who spoke on the condition of anonymity. "Amazon is a very data-driven place, and if you can't prove that your program is beneficial to customers, you're at risk of having your program defunded."
In an age where there is substantial anxiety over whether certain jobs will exist in the future due to automation, jobs that are complementary to data and algorithms are among the safest. Include economists in that. And increasingly, as the CNN article notes, the most exciting economist jobs are in the tech sector.

Although the article focuses on PhD economists, there's many opportunities for graduates with an undergraduate degree in economics as well. Economics isn't going away - an understanding of economics is arguably more important than ever, especially if you want to differentiate yourself from the average business or social science graduate (note the comment above about psychologists). That's why you should study economics.

[HT: Marginal Revolution]

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