Do you remember when your high school math teacher talked about means, medians, variances, regression analysis and the like? Most of us were probably hoping that we never had to deal with these terms again after passing the exam. Here are the good news: nobody will ask you to calculate a standard deviation with just a pencil and an empty sheet of paper on your desk. We have software that does that job much quicker and more accurate. The bad news: statistics and its applications will become more and more important in the future and you should be able to understand the basic concepts.
No matter if you attend a business school, study electrical engineering or physics. All of these programs will have a statistics class waiting for you. The demand for college graduates that understand the basics of statistics has increased tremendously during the past decade as industry challenges have become more complex and more data needs to be taken into consideration to make decisions. Employers expect their analysts to understand the basic relationships between influencing factors on a business (e.g. the influence of interest rates on the demand of a product) or how to interpret a given set of box- and whisker plots.
IBM’s Smarter Planet initiative for example includes a growth play labelled ‘Analytics’. Analytics is the application of descriptive and other statistical measurements to address real-world challenges. The city of Singapore, for example, used statistical methods and tools to analyze the traffic flow in the metropolitan area and developed models to predict the flow (predictive analytics) to reduce traffic jams and pollution. Statistics can also be used to prevent blackouts by analyzing the correlation between population growth and energy consumption and making predictions for future demand. This allows energy providers to adjust their long-term investment plans for new power plants.
As our world get more instrumented (we can measure practically everything), interconnected (people, systems and objects interact) and intelligent (prediction of future events), statistics will play a major role in the future in all parts of our lives. Big Data, i.e. the collection of vast amounts of data, will require enterprises to find intelligent ways to use the information for their purposes. Being able to structure and analyze this data will become a critical skill for college graduates – statistics builds the foundation for these tasks.
Do you feel that you should recap on your statistics skills? Try this lecture of Khan Academy: Introduction to Descriptive Statistics
Guest blogger: Tobias Enders