Abstract: YER: We would like to cover three topics today: your work, the future of IT, and macroeconomic trends. Let's start with the obvious. You used to be a UC Berkeley Professor but you are now Google's Chief Economist. What are you working on day-to-day? VARIAN: One way to define my job is that I want to answer the questions that management is going to ask next month. There are three main areas that my team researches. First - ad auctions. Google generates revenues by selling ads using an auction mechanism. I do research to better understand auctions, analyze data, and make tweaks in the market design. Second - company forecasting. We look at query growth for capacity planning, examine strategic issues, and analyze revenue growth across sectors and geographies. Finally - policy work. There's debate involving antitrust, privacy, copyright, intellectual property and a myriad of areas where economics is a useful lens. YER: One argument that is often made with knowledge distributors like Google is that as information becomes ubiquitous each individual becomes 'stupider.' While myopic, such arguments raise an interesting question: what is the future of education in the digital world? VARIAN: We have this view in academia that the student is supposed to know everything, the teaching assistant is supposed to know where to look everything up, and the professor is supposed to know where to find the teaching assistant. Being able to look everything up is itself a very valuable skill. There are cases where memorizing formulas for taking square roots and similar tasks may be technologically obsolete - since square roots are pretty cheap these days. The hope for the educational future is that you can use your mental energy for tasks that are really suited to human understanding. The computers are merely tools that you can use to better analyze data and come to good decisions. I don't see that the tools will really destroy the capabilities of thought any more than eyeglasses destroyed eyesight. YER: Your writings highlight the importance of data analysis. Where else should we be realigning our curricula? VARIAN: It is a cliche in educational circles, but critical thinking is absolutely crucial. There's this whole line that 'in Washington, nobody pays any attention unless it fits on a bumper sticker; in business, nobody pays any attention unless it fits on a one-page memo; and in academia, nobody pays any attention unless it's a 50 page single-spaced article with 50 footnotes.' Students and adults alike need to manage to navigate this spectrum from oversimplified statements to executive summaries to deeper analysis and find out how we can convey information in an accurate and succinct way. YER: Directing your attention to the intersection of intellectual capital industries and social policy. As the Internet continues to expand, the privacy risks become exceptional. Is security risk a negative externality of the networked system? VARIAN: There are many large companies that people can identify who have a significant brand and try to behave in a responsible way to prevent damage to their image. But egregious activities of just a few small fly-by-night companies can precipitate an entire set of legislation. So it's in the interest of Google and other large companies to try to set industry standards and to police behavior to ensure that we're using data responsibly. You trust your lawyer, your accountant, your tailor, not to convey embarrassing information - information about yourself- and, of course, they are likely to conform to your wishes to stay in business. Every now and then, you will get a Bernie Madoff. But that doesn't mean that you abandon all trust in people who are your agents, those who are working for you. And Google is like your agent. In terms of social policy, it's crucial that we educate people about what's a public act and what's a private act on the Internet. …
Publication Year: 2010
Publication Date: 2010-10-01
Language: en
Type: article
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