Revolutions in Big Data, Housing, and More – Boston News
Let’s explore some of the most interesting stories that have emerged from Boston business schools this week.
So Much For The Robocalypse – Everett
BU Questrom School of Business Richard C. Shipley Professor in Management Iain M. Cockburn, an expert in innovation, was recently interviewed by the business school’s magazine, Everett, about his new paper “The Impact of Artificial Intelligence on Innovation.” His research, written alongside members of Harvard and MIT and published in the National Bureau of Economic Research, explores the long-standing potential of artificial intelligence, which can become a more all-purpose technology, rather than a niche concept or simply a tool to replace every degree of human labor.
Cockburn argues that AI, if used wisely, can replace the menial tasks associated with white collar employment, such as legal services.
“What a lot of people are sitting up and noticing is that this form of automation or replacement of human work with a computer is now percolating into areas that have been largely unaffected by previous technological revolutions,” he says. “Take legal services. It turns out that by using this technology, you can create systems that will do a lot of low-level legal work, like scanning contracts, reviewing contracts, or reviewing documents.”
A pessimistic view could say developments like this could lead to job loss, which may be true. However, in the evolution of the modern job environment, flushing out repetitive tasks that do not require critical or imaginative thinking could allow people to focus on larger issues, rather than bogging down daily routines.
“Then there’s a second question: ‘If I didn’t have to spend so much of my day doing that, what could I be doing that involves imagination, insight, critical thinking?’ So, for some people, their jobs are going to get much more interesting.”
You can read more from the Everett interview of Cockburn here, and check out the “The Impact of Artificial Intelligence on Innovation.”
Could Big Data Replace the Creative Director at the Gap? – Harvard Business Review
Assistant Professor Ayelet Israeli, “an expert in channel management, pricing, online marketing, and eCommerce” took to HBS’s Cold Call Podcast to discuss Gap CEO Art Peck’s move to eliminate its creative director and “turn to big data to predict what the big next designs are going to be.”
Since Gap is now identified as a basics brand, Israeli explains that “maybe it’s okay to sell the trend that everyone else is selling. If you’re selling something that is more fashion forward, then you’re in a bigger problem because you need someone to create this new trend and not just spot the trend that everyone else is doing.”
“The other part of [Peck’s big data] strategy is essentially to shorten production cycles that they had at the Gap. They were from traditional companies that take about 10 months, almost a year, from when they decide on something and it reaches stores. Now they shortened it to about eight to 10 weeks for most of their product categories.”
You can find the full HBS article here.
Corcoran Center to Debut Housing Case Competition – Boston College News
BC Carroll’s Corcoran Center for Real Estate and Urban Action announced a new case competition and panel discussion moderated by Boston Capital Vice President and Director of Communications David Gasson entitled, “The Future of Housing.”
The competition is “intended to hone students’ analytical skills in the field, raise awareness about issues connected to affordable housing development, and offer an in-depth look at the Low-Income Housing Tax Credit as a tool that helps both communities and developers of affordable housing.”
Corcoran Center Executive Director Neil McCullagh writes, “This competition will be a way for students to understand that housing challenges are deeply connected to every facet of our lives. It will also provide them great vision into an industry where they can do well while doing good.”
“In the competition, students will be analyzing a real housing deal. They will need to present their best understanding of the policy and their analysis of the deal outlined in the case. They will then present their solution and recommendations to the judges. The best team will walk away with the grand prize.”
Read more about the “Future of Housing” case competition here and the full Boston College News article here.
Delaware Professor Warns Consumers About Store Promotional Credit
Despite the proliferation and ease-of-access eCommerce presents, many consumers still opt to wait in lines for hours, navigate packed parking lots, and push through herds of consumers to get Black Friday discounts. Thanks to research from Adnong Cheng, Assistant Professor of Marketing at the University of Delaware’s Alfred Lerner College of Business and Economics, bargain-hunters may be able to change their thinking and save more money—or rather, save any money at all.
In a paper in the Journal of Marketing Research titled, “Double Mental Discounting: When a Single Price Promotion Feels Twice as Nice,” Cheng warned consumers of the flawed thinking that can result from store credit.
“Let’s say you went to Ann Taylor Loft, you bought a sweater for $50 and received $10 of Loft credit to spend in the future. This purchase feels like it’s only $40 instead of $50. And then later, you spend the $10 on another shirt and feel like the shirt is free, because you’ve only been spending that merchandise credit instead of more money out of your pocket,” Cheng explains.
The consumer’s thinking in this situation is flawed, as they are factoring the single store credit into the cost of two separate items. Additionally, many people do not fully utilize their store credit, but operate under the mind set that they will.
In one of the studies, Cheng and co-author Cynthia Cryder, an Assistant Professor at the Washington University in St. Louis Olin Business School, cited an ice cream store gave certain customers a $3 discount, and other’s a $3 promotional credit. Consumers with the promotional credit bought more ice cream than those who received a discount, as they felt the night to come back to the store to utilize their credit. This is a phenomenon Cheng and Cryder referred to as “double mental discounting.” Consumers fallaciously applied their discount to two purchases.
Cheng advised consumers: “When you receive promotional credit, don’t think of the initial purchase as cheaper. Only take the money gained into account once you’re actually able to use the promotional credit.”
Haas Student Startups Snag Dean’s Seed Fund
UC Berkeley’s Haas School of Business recently published an article about this spring’s round of Dean’s Seed Fund grants, which awarded 11 student startups instead of the usual ten.
