I agree with you about the non-decision value of forecasting. My claim is that the decision value of forecasting is neglected, rather than that decisions are the only value. I strongly feel that neglecting the decisions aspect is leaving money on the table. From Ozzie:
My impression is that some groups have found it useful and a lot of businesses don’t know what to do with those numbers. They get a number like 87% and they don’t have ways to directly make that interact with the rest of their system.
I will make a stronger claim and say that the decisions aspect is the highestvalue aspect of forecasting. From the megaproject management example: Bent Flyvbjerg (of Reference Class Forecasting fame) estimates that megaprojects account for ~8% of global GDP. The time and budget overruns cause huge amounts of waste, and eyeballing his budget overrun numbers it looks to me like ~3% of global GDP is waste. I expect the majority of that can be resolved with good forecasting; by comparison with modelling of a different system which tries to address some of the same problems, I’d say 2⁄3 of that waste.
So I currently expect that if good forecasting became the norm only in projects of $1B or more, excluding national defense, it would conservatively be worth ~2% of global GDP.
Looking at the war example, we can consider a single catastrophic decision: disbanding the Iraqi military. I expect reasonable forecasting practices would have suggested that when you stop paying a lot of people who are in possession of virtually all of the weaponry, that they would have to find other ways to get by. Selling the weapons and their fighting skills, for example. This decision allowed an insurgency to unfold into a full-blown civil war, costing some 10^5 lives and 10^6 displaced people and moderately intense infrastructure damage.
Returning to the business example from the write-up, if one or more projects were to succeed in delivering this kind of value, I expect a lot more resources would be available for the pursuing true-beliefs-aspect of forecasting. I go as far as to say it would be a very strong inducement for people who do not currently care about having true beliefs to start doing so, in the most basic big pile of utility sense.
I agree with you about the non-decision value of forecasting. My claim is that the decision value of forecasting is neglected, rather than that decisions are the only value. I strongly feel that neglecting the decisions aspect is leaving money on the table. From Ozzie:
I will make a stronger claim and say that the decisions aspect is the highest value aspect of forecasting. From the megaproject management example: Bent Flyvbjerg (of Reference Class Forecasting fame) estimates that megaprojects account for ~8% of global GDP. The time and budget overruns cause huge amounts of waste, and eyeballing his budget overrun numbers it looks to me like ~3% of global GDP is waste. I expect the majority of that can be resolved with good forecasting; by comparison with modelling of a different system which tries to address some of the same problems, I’d say 2⁄3 of that waste.
So I currently expect that if good forecasting became the norm only in projects of $1B or more, excluding national defense, it would conservatively be worth ~2% of global GDP.
Looking at the war example, we can consider a single catastrophic decision: disbanding the Iraqi military. I expect reasonable forecasting practices would have suggested that when you stop paying a lot of people who are in possession of virtually all of the weaponry, that they would have to find other ways to get by. Selling the weapons and their fighting skills, for example. This decision allowed an insurgency to unfold into a full-blown civil war, costing some 10^5 lives and 10^6 displaced people and moderately intense infrastructure damage.
Returning to the business example from the write-up, if one or more projects were to succeed in delivering this kind of value, I expect a lot more resources would be available for the pursuing true-beliefs-aspect of forecasting. I go as far as to say it would be a very strong inducement for people who do not currently care about having true beliefs to start doing so, in the most basic big pile of utility sense.