The Digital Revolution is Happening......Again
Pat Bajari’s love of numbers and data started early.
A native of small-town Minnesota, Pat grew up in Annandale (population 1,234 at the time) about an hour west of campus. He knew by age 19 that he wanted to pursue a PhD in economics. He fondly recalls hanging out on Friday nights at Blegen Hall running regressions with his friends. During his undergrad years, Pat spent the summers working for his father’s construction company. Even in that setting, his mathematical aptitude quickly became evident. Before long, the foreman was asking Pat to run the week’s numbers. One thing led to another, and as a graduate student he was digging into data on project bidding by construction firms to understand how firms operate and wrote his PhD thesis based on his knowledge of the industry.
Today, Patrick Bajari works as Chief Economist at Amazon. At Amazon, Pat helped the company to recruit nearly 300 economists who employ data science, econometrics, cloud computing and machine learning to better serve Amazon’s customers.
Last month, the Minnesota Economics Big Data Institute (MEBDI) hosted Pat, who gave a lecture titled “The Use of Big Data in Industry: A View from the Front Lines.” Pat gets excited about the prospects for data and science to change trends in productivity in the coming decades. During his lecture, Pat pointed out that a quarter of trucks on the road are empty and, in some agricultural sectors, a third of produce may be plowed under or discarded. Pat sees a world where many businesses still use decade-old heuristics and rules of thumb to dictate decision making, a practice that causes tremendous waste.
Pat has built data-based decision technologies at Amazon for more than a decade. Still, he points out that past technologies, like electricity, took nearly 30 years to diffuse into the economy. It will take decades more for sectors dealing with transit, supply chains, and agriculture to adopt the technology that companies like Amazon pioneered over the past decade.
While businesses like Google and Facebook may garner the most headlines, Pat points out that industries like transportation, warehousing, and agriculture are a larger fraction of GDP. Fractionally changing the productivity of these sectors could slowly shift the pattern of decreasing productivity in the US. However, changing the attitudes of CEOs, managers, and staff will take time, leadership, and effort. Companies will need teams with different skillsets. Employees will need to collaborate differently and utilize new software. Management practitioners will confront new challenges in organizational alignment as data and science drives more decisions. These technical and managerial challenges mean that the digital revolution will continue into the 2020s, 2030s, and 2040s, and alumni like Pat and organizations like MEBDI will drive that progress forward.
