The lightbulb is often thought to be Edison’s most notable invention. However, it is not often understood that his real genius was understanding that it would have no impact without the electrical generation and transmission system, so he invented that too. Edison thought broadly of the invention and conceived of a fully developed market place. This approach is an exemplar of modern innovation practices and what some call ‘design thinking’. Today, these practices have evolved to a much greater maturity and we understand how to innovate reliably in many contexts.
In his masters dissertation, Kavi considers the future of innovation specifically with regard to data science, and by extension actuarial science.
Going beyond the usual A/B testing used in many innovative product management teams, modern data science practices have been used recently to allow innovators to consider many many more solutions to problems and, using artificial intelligence techniques such as neural networks, has helped them find innovative solutions by analogy completely unrelated fields. This is just one example of how data science is changing innovation practices.
On the other hand, there is much that actuaries and data scientists may gain from innovation practices. Applying these techniques is often a useful way to explore the question ‘How might we get more value from our data?’ a common question asked by CEO’s of financial services companies in 2020. The paper discusses these applications but goes further to consider how these techniques will benefit actuaries and data scientists is more day-to-day operations e.g. financial reporting. Case studies of local work that EY has done are used as examples.
Ultimately, in the face of automation, remote work, and other threats to the status quo of actuarial and data science practice, the time to embrace innovation is now. In developing his solution, Edison did more than light the world, he paved the way for generations of innovators. And perhaps now for actuaries and data scientists too.