With the debut of Nate Silver’s FiveThirtyEight web site for ESPN, readers of TIME magazine read Jack Dickey’s story about Silver to learn more about his empirical method of forecasting pro sports and election results. Using this approach, Silver has a track record of very accurately predicting results, often decisively beating intuitive expertise and informed opinion. The same Predictive Analytics technology is becoming more commonplace, also being applied to business problems such as identifying unhappy customers, and reliably anticipating factory floor breakdowns.
It’s no coincidence that just a few weeks prior, TIME ran another Predictive Analytics story. This one, written by Bill Saporito, was about the Cancellator, an algorithmic program used by American Airlines that “…use(s) predictive models to cancel flights early, before people even leave for the airport.”
It’s that difference between what has happened and what will happen that is capturing the mainstream media’s attention. It’s the astonishing degrees of accuracy that is also making business executives sit up and take notice as well. Silver correctly predicted the 2012 presidential election winner in all 50 states and the District of Columbia.
While some businesses, and pro sports teams and scouts, will continue to make some decisions based on observation and intuition, Predictive Analytics is going mainstream.