November 2, 2009
Five months of late nights spent analyzing North Dakota rainfall, crop yields and soil conditions paid off last fall for a team of economics graduate students. For the second year, SMU’s data mining team captured the national championship at the 2009 SAS Data Mining Shootout by solving a real-world business problem.
Winners of the 2009 SAS Data Mining Shootout (from left) Steven Gregory, Jingjing Ye and Michael Fulmer with their faculty sponsor, Tom Fomby, chair of the Department of Economics.
The students used computer science, economics and statistics skills to analyze the competition’s challenge – identify the three counties in the United States best suited to grow EnergyGrass, a biomass source for ethanol production.
Students Michael Fulmer, Jingjing Ye and Steven Gregory studied a typical business situation, says faculty adviser Tom Fomby, professor and chair of economics. “Their job was to use less than pristine data to find the location for ethanol production centers that would generate the most profit for the company.”
The SMU team competed against 48 other colleges and universities for the $5,000 prize.
“Putting a project together from scratch was a rare opportunity,” says team member Michael Fulmer, a Ph.D. candidate in economics. “We thought like members of a business team by adding variables such as location of railroad lines, potential tax revenues for cities and profits for farmers.”
In 2004, the Department of Economics in Dedman College was one of the first universities to create an economics graduate-level data mining course, Fomby says. Data mining, or business analytics, is the ability to extract business insights from large amounts of data. Data mining courses are more likely to be found in engineering or business programs, he says.
“We saw a market developing for economists with business analytics skills,” Fomby says. “Economists bring businesses a unique understanding of profit maximization, efficiency and resource allocation.”
According to The New York Times, IBM recently announced it plans to invest more than $10 billion nationwide to build its capabilities around business analytics. A recent Information Week magazine ranks advanced analytics second on top 10 list of strategic technologies for 2010.
SMU undergraduate students’ interest in economics also supports a growing demand for business analytics skills. The number of students majoring in economics in Dedman College has increased from 150 to 500 in the last 10 years.
“We know there is a demand for these skills,” Fomby says. “We’re training the people to meet that demand.”