When you are sixteen years old, you know everything. At least I thought I did.
It was the summer before my freshman year of college at the University of Delaware. My Dad took the day off of work to take me to the main campus in Newark for freshman orientation.
We met with counselors, took a tour of the campus, signed up for meal plans and went to the parent/new student barbecue. Over hot dogs and corn on the cob – my Dad asked me a question –
Soon you will be in college. What will you study and what will you do with it?
With the unbounded certainty of youth, I declared.
I want to be an Economist.
I had done my home work, researched careers, done summer internships to rule out what I did not want to be and to uncover what I did. I was going to study the science of business, of nations, of the the funds that flow through them, and the people who drive them… I was going to learn to predict the future.
It was not until my senior year of college that I was introduced to a then comparatively new field of economic application – econometrics. The link will take you to a broader definition, courtesy of Wikipedia, but in short, econometrics combines the theory of economics with quantification and statistics to actually measure and predict economic outcomes. Using punch cards and a Burroughs 7700 (a computer you now find only in museums) we learned to model past and present outcomes of the national and world economy. We learned about variables and assumptions and the impact they would have when combined together. And then came the rub. The greatest variables all of – perceptions of outcomes and the changes in people’s behavior that would result from them.
That’s when it hit me. Once economists tell people what will happen – using their computerized crystal balls – people react to that information and change their behaviors. And, in that case, your model and your predictions would often be WRONG.
Maybe I didn’t want to be an economist after all – I hate to be wrong!
And so on graduation, I went into the world of business. Starting in banking, moving on to the emerging field of electronics and technology, and later into entrepreneurship.
Almost 20 years after freshman orientation, I went back to school again. This time at Arizona State University in their executive MBA program. I did not go back to get my MBA for the degree – but for the learning. After almost 20 years in business – things had changed – the rules were different, and my crystal ball was in jeopardy of getting cloudy. And I began to see that it was not just my crystal ball that was flawed. We were at the peak of the Dot.Com Bubble – soon for many of us in the technology industry, the bubble would burst and our crystal balls would clear to show some serious cracks.
In class, we learned about the many bubbles throughout history from Dr. Stephen Happel and the Blue Chip Forecasts from Dr. Lee McPheters. We went to Washington D.C. to see how it worked from the inside, and later to Europe and China to see the changes in our world first hand. But equally important, I learned what was happening in a wide range of businesses from my fellow students , leaders in healthcare, investments, and industry.
It was a reminder of what I had learned long ago. That economics is not a subject but a study… of business, of nations, of the funds that flow through them, and the people who drive them. And so I began to study economics again on my own.
As business people, perhaps we all should pay more attention to economics.
You see, it’s not what we study or even the answers that makes a difference.
But what we do with the knowledge, once we find it, that most surely will.
Thanks for stopping by. Stay tuned.