Big Picture or Big Pain?

I always felt engineers could do it better, after owning a business with engineers on staff, I have to disagree, I thought I was bias but no.

They should have input to build off the base for marketing, but do not stretch engineers too thin. Have them do what thier good at. And not what they (the engineers themselves) think thier good at.

To the statement "We've seen how mathematical models from the physicists have affected the global economy" I have to reply (with a tinge of sarcasm) "Which global economy are we talking about? The September, 2008 one or the November, 2008 one? If the current differences of opinion in leading economists is any indication I'd say that analytical approaches are not helping much.

I don't mean to disparage the potential role of mathematics in marketing. There's plenty of room for good mathematical models in that world. The problem is that the underlying principles in marketing are not well understood in a numerical sense and the necessary metrics are at best crude. And I suspect this goes for much of the world of economics (Poor babies, these economists; they are not having much fun this month.)

They are where most of the traditional engineering disciplines were 100 plus years ago. They build their mathematical models to fit the data they collect only to find that some new situation comes along that doesn't fit. Occasionally one comes up with a good solution and he gets a Nobel prize for it. This is some indication of the rarity of such tools in that world.

I'm reminded of a late 19th century engineering handbook in my library. It is full of empirical algebraic formulas for commonplace mechanical problems and with coefficients, exponents and forms unlike any mathematical solution we use today. I guess it was the practice back then to take a data set for a particular situation whose fundamental principals were not well understood and simply develop a formula that fit the points in the available test curves.

To answer the question about whether engineers should get involved I'd say "yes". A few engineers should get interested in marketing for the very reason that better mathematical analysis is needed there. But it will be a very long slog for the solution of marketing problems to be based on any serious mathematical analysis beyond what a good CPA can bring to the party today. For one thing the world of economics has barely touched the principles of control theory with a few scholarly papers and dissertations on the subject. Ask most non-engineer marketing types what they know about control theory and they will tell you something like "my theory is that I want to control the price we can make the most money".

I'm watching something like this going on in the head of a young engineer who has tired of the design engineering working environment in our area. Personally I think he is a bit far ahead of his time. I suggested he go back to school and get himself an advanced degree in economics. But a cursory look at universities offering graduate level economics programs shows little opportunity for study in the area I know he is interested in.

Ed Weldon

Traditional engineering generally deals with "equilibrium" analysis- even dynamic systems have focused on only small deviations from the "equilibrium" state. True, in recent decades (actually, over the past century, if one goes back to pure mathematics rather than practical engineering), there has been a strong emphasis in studying larger deviations- fractal and chaos theory. Engineering theory draws on a wide body of proven rules that have been validated by several centuries of test, measurement, failure and success. One should also note that all mathematics tends to over-simplify a model to make it easier to handle, with a "fudge factor" to account for the effects of unknown inputs (usually called noise).

The problem with utilizing such processes to analyze economic activity is that the economy is not a closed system. Once a model has been built that "explains" current trends, someone will figure out how to manipulate the system to personal advantage (i.e., buy/sell models in the stock market), others adopt the system, and the model itself becomes the driver. So someone must come up with a new model to account for the unanticipated input to the system. Spectacular profits are accrued when one has a better understanding of the "noise" than one's competitors. Furthermore, the economy in which we live did not exist 100 years ago. The old saw about building a better mousetrap and the world beating a path to your door has lost its validity, partly due to the fact that mice are not the problem they once were.

Many organizations see marketing as "creating" a perceived need for a product they have developed, rather than developing a product to address a real need. I read a book a while back- unfortunately, I do not currently have access to a reference to this at hand- that studied successful innovation in a variety of fields, from sporting equipment to computer and software technology. The basic conclusion was that the "early adopters"- those beyond the mass market vale- would start with a "standard" product and modify it, tweak it, to bring it closer to meeting their personal needs (this was, of course, a volume somewhat biased in favor of Open Source software and such). Companies that proved really successful in promoting innovation were those that would support and work closely with these early adopters to insure that the needs perceived by users were actually incorporated into future design iterations (or, early adopters starting up a company to manufacture a product more appropriate than the "market leaders" were willing to provide). The lesson presented was that one should listen to one's customers, not the marketing gurus that study trends, surveys and other hype produced for the purpose of justifying yesterday's business decisions.

I guess this is a long-winded way of saying that engineers and economists/marketeers deal with totally different universes, and draw on totally different concepts. It appears easier for an engineer to transfer to other disciplines rather than, say an economist to become an engineer. But this does not mean an engineer is a natural for the economics profession.

Now a disclaimer- these opinions are based on personal observation over many years in different fields of endeavor, and may or may not be valid foro those with a perspective on the workings of the universe somewhat different from my own...