Read this transcript and type the three things youv'e learned

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when Hurricane Katrina was about to hit

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the coast the United States a large

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retailer did a study to prepare

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themselves by asking what products they

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might sell out of and what they should

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stock up on a room full of intelligent

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and experienced executives thought

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through what those products might be and

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came up with reasonable answers such as

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flashlights batteries water canned food

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sandbags and more but when they ran the

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data in analytics the number one product

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turned out to be Budweiser beer this is

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the power of data to illuminate insight

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to take us beyond intuition and help us

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make data empowered decisions and has

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relevance for most everything we do more

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and more of our actions and interactions

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with the world's are becoming mediated

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by data this alters how we interact and

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the choices we make understanding and

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seeing data can completely change the

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ranking of a set of options available to

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us and hence how we allocate our

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resources both as individuals and

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collectively almost everything can be

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tested measured and improved and this is

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truly bringing about a quiet but

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fundamental cultural transformation in

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how we make decisions data fication

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brings about a more objective form of

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decision making what is called

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data-driven decision-making for example

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when it comes to choosing a movie we

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used to go to the store and pick up the

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movie browse through all the titles read

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the description and decide which one we

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want to see now we're confronted with

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algorithms that make recommendations

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based upon data from the last films that

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we've seen as well as who our friends

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are what films they have seen in lights

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and the aggregation of feedback from

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thousands of millions of other users

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Madeleine McIntosh from a book

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publishing house talked about the

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culture of publishing changing with the

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arrival of Amazon's data-driven approach

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the traditional culture publishing was

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what she called their culture of lunches

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a culture of conversations where people

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had hunches and ideas about books and

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then discussed them Amazon then brought

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a date

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even numbers and math driven approached

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this decision and was able to basically

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figure out much better what was working

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and what wasn't working with the result

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being that they've essentially taken

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over the markets this transformation is

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happening in many areas of our economy

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more traditional companies are being

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displaced by companies that have

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embraced this new technology and the

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cultural paradigm of data think about

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wine tasting which you might think of as

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a quintessentially human skill there are

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human experts who look at and smell the

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wine to tell you what it tastes like and

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if it's of good quality this is the

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highly refined skill and sensory ability

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but it's also true the wine is at the

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end of the day just certain molecular

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composition and you can analyze that

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with numbers the wine analytics company

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analytics have been able to figure out

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that you can predict how an expert will

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rate it before they've even tasted the

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wine with remarkable accuracy and this

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applies to more and more spheres of life

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all Street is no longer full of people

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on seats making trades based on

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intuition and hope but up to 70% of

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those decisions are now made by

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algorithms acting on data

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likewise decisions on healthcare

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diagnostics are increasingly made by our

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listicle systems sports decisions are

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based on big data extracted from cameras

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around the court all pitch and sensors

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in the shirts of players the implicit

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premise of big data is that decisions

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can be made based fully upon data and

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computerized models shifting the locus

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of decision-making for people and

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institutions to data and former models

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bill Schmid's o from EMC describes well

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how decisions are currently made based

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upon management's gut feeling one of the

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most critical aspects of Big Data is its

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impact on how decisions are made and who

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gets to make them when data is scarce

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expensive to obtain or not available in

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digital form it makes sense to that well

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place people make decisions which they

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do on the basis of experience they've

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built up and patterns and relationships

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observed and internalized intuition is

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the label given to this type of

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inference and decision-making people

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state their opinions about what the

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future holds what's going to happen how

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well something will work and so on and

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then plan accordingly the term hippo is

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an acronym now used to describe this

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type of corporate decision-making

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process where the highest-paid person in

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the room gets to make the final call

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much for approached decision-making has

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been a function of simply not having

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data and not knowing in the past we've

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had to make decisions about complex

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environments and complex systems without

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being able to see or know what they are

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really like just based upon some

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intuition but big data analytics offers

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this new telescope with which to

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actually see these systems and the

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difference between having a hunch and

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actually seeing the data can be huge in

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terms of the decisions that get made

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every minute the world loses an area

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forests the size of 48 football fields

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and deforestation in the Amazon basin

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accounts for the largest share of this

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contributing to reduce biodiversity

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habitat loss climate change and other

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ecologically devastating effects but

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better data about the location of

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deforestation and human encroachment on

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forests could help governments and local

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stakeholders respond more quickly and

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effectively a project called planets is

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currently developing the world's largest

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constellation of Earth imaging

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satellites

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it will soon be collecting daily images

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of the entire land surface of the earth

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at 3 to 5 meter resolutions while

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considerable research has been devoted

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to tracking changes in forests it

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typically depends on coarse resolution

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images furthermore these existing

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methods generally can't differentiate

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between human causes of forest loss and

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natural causes this project planets is

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challenging the analytics community to

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develop machine learning models for

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labeling satellite image scripts with

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atmospheric conditions and various

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classes of land cover and land use types

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resulting algorithms

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will help to better understand where how

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and why deforestation happens all of the

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world's a much clearer image of this

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complex system would enable action

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orientated decisions take place the

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switching the dynamic from hunches

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guesses and intuition to that of a

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data-driven decision-making approach

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data holds a huge potential to

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revolutionize how we make decisions to

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shake up existing inert patterns of

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thought and action taking to overthrow

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unquestioned bias to question

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established assumptions but data also

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has its limitations and this will we'll

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look at in the next module as we go

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further into the conceptual foundations

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of the big data paradigm talking about

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what's come to be called a tourism the

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belief in data