In recent years, economists have played an increasingly important role in high technology firms. Their understanding of economic systems and their experience disentangling causation from correlation in empirical data complement the skills of data scientists coming from other backgrounds. In addition, their knowledge of incentives and market structure makes them indispensable for organizations developing or operating in the new kinds of markets, platforms, and economies created by our digitized world.
These developments are not just restricted to the high tech sector--the explosion of digitized data is creating new challenges and opportunities for businesses, governments, and non-profits of all kinds.
As a result, economics training is expanding to include new areas such as computer programming and machine learning. As the premier economics department in San Francisco, the world's high-tech hub, we are taking the lead in updating economics education to reflect these new developments. Whether students hope to join the many established firms and numerous startups located within a few blocks of campus or want to find innovative ways to fight poverty in the developing world, our goal is to equip them with the tools they need.
Here are some resources for students interested in learning more about this developing sector:
- Podcast interview with USF Professor Peter Lorentzen, the director of our tech-economics-focused Applied Economics Master's program.
- Why Economists Are Flocking to Silicon Valley, in The Economist. (Sept 7, 2022)
- Two articles co-authored by the prominent academic economists Susan Athey (Stanford Business School) and Michael Luca (Harvard Business School) give the best overall analysis of this trend:
- The short version is Why Tech Companies Hire So Many Economists, appeared in the Harvard Business Review on February 12, 2019. A longer discussion, Economics (and Economists) in Tech Companies, was published in the Journal of Economic Perspectives in Winter, 2019.
- Two members of our advisory board who are labor economists at employment-oriented tech firms have also weighed in:
- Should your tech firm have an economist? by Jed Kolko, Chief Economist at Indeed.
- Newsletter on Tech Economics from Andrew Chamberlain (MSAE advisory board member, Chief Economist of Glassdoor.com
- Andrew Chamberlain's video "What do economists do in tech?" on a typical research project of an economist in tech
- A television special from May 2019: PBS Newshour: How data drives Uber's efficient but controversial business
To learn about academic research on the topic, read this review article on Digital Economics by Avi Goldfarb (University of Toronto's Rotman School of Management) and Catherine Tucker (MIT Sloan) in the Journal of Economic Literature, published in March 2019. For even greater depth, dig into the NBER Project on the Economics of Digitization, which contains reading lists, course syllabi, data sources, and other resources for PhD students and academic researchers working in this area.
Economists in the tech sector often are grouped into the broad category of "data scientists." This post about how Airbnb subdivides data science into Analytics, Algorithms, and Inference specialties may be helpful in understanding where they fit in. Economists tend to be strongest in inference and analytics. And here is a cool tour of how algorithms are used at Stitchfix.
The Tech Economics conference, organized by the National Association of Business Economists, has become the hub of interaction between economists in industry and academia, and a major forum for networking and hiring. This conference, sponsored by organizations including Amazon, Google, IBM, Microsoft, Netflix, Uber, Zillow, CBRE, CoreLogic, Facebook, Haver Analytics, Indeed, Realtor.com, and the University of San Francisco, alternates annual meeting locations between Seattle and San Francisco.
On the research side, closely related conferences include the Conference on Digital Experimentation (CODE) from MIT's Initiative on the Digital Economy and the ACM Conference on Economics and Computation.
News Articles on Tech Economics
Big Tech is Testing You. The New Yorker. March 2020. Discusses the growing role of experimentation in the tech sector, and the crucial role economist have played in showing firms how to use it effectively.
The new dot com bubble is here: it’s called online advertising. The Correspondent. November 2019.
Amazon gets an edge with its secret squad of PhD economists CNN Business, March 13, 2019
"Soon there may be more economists at tech companies than in policy schools" Quartz, October 31, 2018
"Uber's Secret Weapon is its Team of Economists" Quartz, October 14, 2018
"The World’s Top Economists Want to Work for Amazon and Facebook" Bloomberg.
"All of a Sudden, Economists Are Getting Real Jobs" Noah Smith on Bloomberg.
"Goodbye, Ivory Tower. Hello, Silicon Valley Candy Store." The New York Times.
"Economics in the age of big data" Science
"How Online Shopping Makes Suckers of Us All" The Atlantic
"How we all became lab rats for American corporations and theoretical economists" The Los Angeles Times
"Chief economists are the new marketers" The Washington Post
"Economists Adding Up At Amazon.com, Microsoft, Google" Investors Business Daily
Discussions in Online Forums
Quora: "Why do technology companies hire economists, and what is their contribution? What kinds of problems do they work on?"
Medium:"4 Reasons Why Economists Make Great Data Scientists (And Why No One Tells Them)"
What Can Uber Teach Us About the Gender Pay Gap? This great podcast from Freakonomics illustrates the potential for collaboration between high tech firms and economists to research important social issues.
Why Uber is an Economist's Dream, also from Freakonomics, provides another illustration of how new sources of data from the digitized economy provide new windows into classic economic questions.
Susan Athey on Machine Learning, Big Data, and Causation, from EconTalk.