Beach sand ripples can be fingerprints for ancient weather conditions

When a coastal tide rolls out, it can reveal beautiful ripples in the temporarily exposed sand. These same undulating patterns can also be seen in ancient, petrified seabeds that have been exposed in various parts of the world and preserved for millions or even billions of years.

Geologists look to ancient sand ripples for clues to the environmental conditions in which they formed. For instance, the spacing between ripples is proportional to the depth of the water and the size of the waves that molded the underlying ripples.

But sand ripples aren’t always perfectly parallel, carbon-copies of each other, and can display various kinks and sworls. Can these more subtle, seemingly random deviations or defects tell us something about the conditions in which a sandy seabed formed?

The answer, according to researchers from MIT and elsewhere, is yes. In a paper published online and appearing in the Oct. 1 issue of Geology, the team reports that some common defects found in both ancient and modern seabeds are associated with certain wave conditions. In particular, their findings suggest that ripple defects resembling hourglasses, zigzags, and tuning forks were likely shaped in periods of environmental flux — for instance, during strong storms, or significant changes in tidal flows.

“The type of defect you see in ripples could tell you about how dramatic the shifts in weather conditions were at the time,” says Taylor Perron, associate professor of geology and associate head of MIT’s Department of Earth, Atmospheric and Planetary Sciences (EAPS). “We can use these defects as fingerprints to tell not just what the average conditions were in the past, but how things were changing.”

Ripple defects in ancient sandbeds may also influence how fluids flow through sedimentary rocks, including underground reservoirs that hold water, oil and gas, or even stored carbon dioxide, according to Perron.

In addition, he says, ripple patterns in modern sand act to roughen the seabed, slowing down ocean currents near the shore. Knowing how ripples change in response to shifting waves and tides may therefore help predict coastal erosion and flooding.

Perron’s co-authors are on the paper are former MIT graduate student Kimberly Huppert ’11, PhD ’17, former undergraduate and current postdoc Abigail Koss ’12, Paul Myrow of Colorado College, and former undergraduate Andrew Wickert ’08 of the University of Minnesota.

Wrinkles preserved

The team began looking into the significance of ripple defects several years ago, when Myrow, who at the time was spending his sabbatical at MIT, showed Perron some photos that he had taken of sedimentary rocks etched with ripples and grooves. The rocks were, in fact, ancient sandbeds that were hundreds of millions of years old.

Wave-sculpted ripples form as waves travel across the surface of a body of liquid. These waves cause water beneath the surface to circle around and around, generating oscillating flows that pick up sand grains and set them down in a process that eventually carves out troughs and grooves throughout the sandbed.

But how could such delicate patterns be preserved for millions of years? Perron says that various processes could essentially set ripples in place. For instance, if the water level suddenly dropped, it could leave a sand bed’s ripples exposed to the air, drying them out and hardening them to some extent, so that they retained their patterns even as more sediment slowly layered itself on top of them over billions of years.

Similarly, if a finer sediment like mud or silt covers a sand bed, such as after a large storm, these sediments could blanket the existing ripples. As Perron explains, this would essentially “armor them, keeping the waves from eroding the ripples before more sediment buries them.” Over time, the sediments turn into rock as they are buried deep below Earth’s surface. Later, the rock overlaying the ripples can naturally erode away, exposing the preserved ripples at the surface again.

In looking through photos of sand ripples, Perron and Myrow noticed small defects resembling tuning forks, zigzags, and hourglasses, across both ancient and modern sandbeds.

“People have noticed these defects before, but we wondered, are they just random, or do they actually contain some information?” Perron says.

Paddling through waves

The researchers set out to study the various wave conditions that generate certain ripple patterns and defects. To do this, they built an acrylic wave tank measuring 60 centimers wide, 50 centimers deep, and 7 meters long. At one end of the tank, they attached a motor-driven paddle, which swished back and forth to generate waves that traveled across the tank.

At the other end of the tank, they erected an artificial sloping “beach” covered in a polymer mesh. This setup served to minimize any wave reflections: As a wave crashed onto the artificial beach, the energy dissipated within the mesh instead of splashing back and influencing oncoming waves.

The team filled the tank with a 5-centimeter-thick bed of fine sand and enough water to reach 40 centimeters in depth. For each experiment, they set the paddle to swish back and forth at a constant distance, and recorded the sand bed as ripples formed. At a certain point, they observed that the ripples — and in particular, the spacing between the ripples — reaches a stable, consistent pattern. They recorded this spacing, along with the speed and amplitude of the paddle, and then, over 32 experimental runs, either increased or decreased the paddle’s motion, causing the ripples to morph again to either a wider or narrower spacing.

Interestingly, they found that, in the process of adjusting to a new spacing, ripples formed intermediary defects resembling zigzags, hourglasses, and tuning forks, depending on the wave conditions set by the tank’s paddle.

As the researchers shortened the paddle’s back-and-forth motion, this created shorter waves, narrower ripples, and patterns that resembled hourglasses. If the paddle’s motion was shortened even further — creating faster, shorter waves — a pattern of “secondary crests,” in which existing ripples appeared to form temporary “shadow” ripples on either side, took over. When the researchers widened the paddle’s motion, generating longer waves, the ripples formed zigzag patterns as they shifted to a wider spacing.

“If you see these types of defects in nature, we argue that the seabed was undergoing some kind of change in weather conditions, tides, or something else that affected water depth or waves, probably over the course of hours or days,” Perron says. “For instance, if you’re seeing lots of secondary crests, you can tell there was a pretty big change in the waves as opposed to a smaller change, which might give you hourglasses instead.”

The researchers observed that in all scenarios, patterns resembling tuning forks cropped up, even after ripples had reached a new, stable spacing.

“These tuning forks tend to stick around for a long time,” Perron says. “If you see these in modern or ancient rock, they suggest a seabed experienced a change, but then the conditions remained steady, and the bed had a long time to adjust.”

Going forward, Perron says geologists can use the team’s results as a blueprint to connect certain ripple defects with the water conditions that may have created them, in both the modern environment and in the ancient past.  

“We think these small defects can tell you a lot more about an ancient environment than just what the average size of the waves and water depth was,” Perron says. “They could tell you if it was an environment that had tides that were large enough to change ripples by this much, or if a place was experiencing periodic storms, even billions of years ago. And if we find ancient wave ripples on Mars, we’ll know how to read them.”

This research was supported, in part, by the National Science Foundation.

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For collecting weather data, tiny satellites measure up to billion-dollar cousins

Big storms are getting bigger. Typhoon Jebi became the strongest tropical cyclone to hit Japan in 25 years and killed at least 10 people this past summer. Hurricane Florence awed even veteran meteorologists with its powerful combination of high winds and extreme moisture when it made landfall in North Carolina on Sept. 14.

Now, some MIT researchers say that the best way to study and understand these monster storms is to make the satellites that track them smaller.

A group of researchers from MIT’s Department of Aeronautics and Astronautics, led by PhD candidate Angela "Angie" Crews and Associate Professor Kerri Cahoy, in collaboration with Vince Leslie and William Blackwell at MIT Lincoln Laboratory, have published a new study comparing weather data collected by a CubeSat — a low-cost satellite about the size of a shoebox — with data from a traditional weather satellite.

“The bottom line is that this tiny satellite collected data that is as good as the data from a billion-dollar government satellite,” says Crews, the lead author of the paper, “Calibration and Validation of Small Satellite Passive Microwave Radiometers: MicroMAS-2A and TROPICS.” The research was presented at a conference of SPIE, the international society for optics and photonics.

CubeSats have a number of advantages over larger cousins like the NOAA-20 satellite, which weighs nearly 2,300 kilograms, while the diminutive MicroMAS-2A weighs less than 4 kg. NOAA-20 took eight years from the time the contract was awarded to when it was operational in space, while CubeSats can be built and deployed in a year or two.

“You can build them faster, which means you can put new technology on quicker instead of waiting 10 years for new technology infusion on a government program,” Cahoy says.

Big satellites also need their own dedicated launch vehicle, but CubeSats can stow away as secondary payloads whenever a launch vehicle has a little extra payload space.

CubeSats do have some drawbacks when compared with their larger kin, such as a shorter lifespan and the fact that they carry a more limited array of instruments. The MicroMAS-2 satellite, which measures temperature, water vapor, and cloud ice in the atmosphere, is basically a platform for a single 10-channel scanning microwave radiometer mounted in a rotating cube at one end of the satellite.

Yet the most important thing about weather CubeSats isn’t necessarily what they can do alone, it’s what multiple CubeSats can accomplish in concert. When oxygen and water vapor naturally emit signals in the microwave portion of the electromagnetic spectrum and those signals are measured at different heights by multiple satellites in a low-earth orbit constellation, they have the combined impact of the instruments on a larger satellite, and fed into weather models where the data are used for enhanced modeling and forecasting of hurricanes, tropical storms and thunderstorms, including 3-D reconstruction.

“A constellation of CubeSats lets you get data over the same spot multiple times on the same day, which is not possible with the standard government weather satellites right now, which maybe give you data over the same spot once a week,” Cahoy says. “If you’re tracking a tropical storm or a hurricane and you want to use data to update your forecasting models, that’s not as good as you would like it.”

That’s where MIT Lincoln Laboratory’s TROPICS (Time-Resolved Observations of Precipitation structure and storm Intensity with a Constellation of Smallsats) project comes in. TROPICS, led by Bill Blackwell, comprises a constellation of six CubeSats in three low-Earth orbital planes expected to be fully deployed sometime in 2020.

“TROPICS, in particular, is really aimed at looking at tropical cyclones, where the inner core conditions can change very rapidly,” says Crews. “So, if we have the constellation up there we can learn a lot more about tropical life cycles, and we can learn about factors that affect the intensity and just get a lot more data and really characterize these tropical cyclones better.”

Another advantage that bigger satellites have over the CubeSats is that they are easier to calibrate. But Crews, Cahoy and the MIT team found a novel way to improve calibration in the MicroMAS-2A. Because the MicroMAS-2A is carrying a radiometer spinning 30 times a minute, they found it was experiencing solar and lunar intrusions (times when the sun or the moon entered the scanning field and affected the satellite’s measurements) at a much higher rate. Where the NOAA-20 instrument would experience perhaps 44 intrusions over the course of a year, MicroMAS-2A would experience 5,700. So instead of discarding the data or correcting for it, they plan to use the intrusions as a calibration source because they are so frequent.

The researchers say they are just scratching the surface of what CubeSats can do, and that in the coming years they could have mean groundbreaking advancements in commerce, shipping, and military applications.

“CubeSats will continue to let us test new and better technologies — new chips, new electronics, new sensors  —  faster because we can get on orbit more quickly to see how they work, and do a better job of designing these instruments, cost everyone less money and get us more data,” Cahoy says.

Adds Crews: “It’s an exciting time to be in the field.”

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MIT Press, Media Lab launch Knowledge Futures Group

The MIT Press has announced the launch of the Knowledge Futures Group (KFG), a first-of-its kind collaboration between a leading publisher and a world-class academic lab to transform how research information is created and shared.

The joint initiative of the MIT Press and the MIT Media Lab seeks to redefine research publishing from a closed, sequential process into an open, community-driven one. The goal is to develop and deploy technologies that form part of a new open knowledge ecosystem, one that fully exploits the capabilities of the web to accelerate discovery and the transmission of knowledge.

The effort has thus far received $1.5 million for its initial year of operation, through the generous support of Reid Hoffman, the co-founder of LinkedIn and a member of the MIT Media Lab’s Advisory Council, as well as smaller project-specific gifts from the Siegel Family Endowment, the John S. and James L. Knight Foundation, the Alfred P. Sloan Foundation, Protocol Labs, and several individual donors.

Hoffman says he is supporting the effort “because I believe our future depends on how effectively we can combat the spread of misinformation and democratize access to trustworthy, verifiable sources of information.”

“It is imperative that we must move quickly toward a more open system of knowledge creation and sharing,” he says.

Several months ago, Media Lab Director Joi Ito and MIT Press Director Amy Brand began exploring the creation of an incubator at MIT for tools and technologies that could enable a more open model of research.

“We’ve created this space for pure experimentation,” says Brand. “And we’ve already seen the benefits of sharing ideas between our core publishing groups and the KFG in innovative projects like Frankenbook, JoDS, and our Works in Progress Open Access book community. We believe these examples are just the beginning of what will come from continued testing, development, and cross-collaboration.”

Ito, a member of the MIT Press Management Board, says publishing models “need to get better at aligning academic incentives with societally beneficial outcomes.

“We’d also like to serve as a model for others of what institutional ownership of this essential infrastructure looks like and how it can succeed at amplifying the impact of investment in basic research,” he says.

Terry Ehling, director of strategic initiatives at the MIT Press, says the need to promote the efficient and equitable dissemination of research information has never been more urgent.

“The press is in a unique position among mission-driven publishers to take a disciplined and transparent approach to open collaboration and experimentation,” says Ehling, who also serves as managing director of the Knowledge Futures Group.

One of the KFG’s first projects is PubPub, an open authoring and publishing platform that was developed by Travis Rich and Thariq Shihipar while they were graduate students at the Media Lab. The platform socializes the process of knowledge creation by integrating conversation, annotation, and versioning into a digital publication.

The KFG is also incubating the Underlay, an open, distributed knowledge store that was conceived by Danny Hillis and Sam Klein and is being developed with Joel Gustafson. The Underlay is architected to capture, connect, and archive publicly available knowledge and its provenance.

The initiative will be based in close proximity to both the Media Lab and MIT Press at the Cambridge Innovation Center in Kendall Square.

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Math Prize for Girls competition helps to close the gender gap in mathematics

When Glenn Ellison coached his daughters’ all-girl math team all the way to the state finals, he noticed that his team was vastly outnumbered by boys.

Ellison, the Gregory K. Palm (1970) Professor of Economics at MIT, turned his dismay into research. With Ashley Swanson of the Wharton School at the University of Pennsylvania, Ellison published a paper that showed a huge gender gap in high school mathematics.

In the paper, “Dynamics of the Gender Gap in High Math Achievement,” distributed in August by the National Bureau of Economic Research, they reported that of the top 5,000 9th graders participating in the American Mathematics Competitions (AMC) from 1999 to 2007, just 30 percent were girls. By senior year, the number drops to 22 percent. High-achieving female math students were so discouraged they either dropped out of math contests, or saw their scores droop by their senior year.

The research confirmed and quantified what others had already come to know. Back in 2009, in an attempt to address this trend, Ravi Boppana ’86, a research affiliate with MIT’s Department of Mathematics, helped launch the Advantage Testing Foundation Math Prize for Girls. This past weekend marked the 10th anniversary of the contest, as a record 285 middle and high school female students from the United States and Canada arrived at MIT to compete for $60,000 in cash prizes.

Helping female “mathletes” thrive

“It is imperative to bridge the gender gap in math and science so that the best and brightest women as well as men reach their fullest academic and professional potential,” said Arun Alagappan, Advantage Testing’s founder and president. “Even as we help empower young women to believe in and express their abilities, we are helping build a more robust group of leaders in the STEM professions, and a more competitive economy as well.”

Advantage Testing’s goal is to bring girls with strong math skills together to encourage their talent, build a network lasting into college and beyond, and inspire them to mentor girl math students. “We want to give these girls the opportunity to thrive in an environment where their sense of belonging is never in question," said Alagappan.

Boppana added: "Girls perform as well as or better than boys in math classes in grade school, but there is an alarming drop-off in the number of young women who study math in college and pursue math-related careers. We created the Math Prize for Girls to help debunk gender stereotypes, and to support young women who see higher-level mathematics as a pursuit that is challenging, fun, and incredibly rewarding."

Contest and community

“The Math Prize is far more than a prestigious math competition,” said Maria De Vuono-Homberg, associate director for the Math Prize for Girls. “It is a weekend-long event which encourages the girls who attend to get to know each other and forge connections for their future in college, industry, and research.”  

Young female “mathletes,” who qualified with a top score on the American Mathematics Competition exam in February, arrived last Saturday for a campus tour and an MIT admissions informational session, followed by a non-competitive game night in the Math Department’s Norbert Wiener Common Room. The next morning, while parents attended a panel by Math Prize alumnae, contestants took a 2.5-hour exam with 20 multistage problems in geometry, algebra, and trigonometry.

While the results were reviewed by a panel of judges from MIT and Advantage Testing, MIT students and Math Prize alumnae Justina Yang and Emma Kerwin helped host the awards ceremony. The MIT Muses entertained the participants, and Associate Professor Moon Duchin of Tufts University’s Department of Mathematics gave the Maryam Mirzakhani keynote lecture: "Random walks in theory and practice.”

First prize was a tie, with 17 out of 20 questions answered correctly, between Yuxuan Zheng, a Princeton International School of Math and Science Junior from New Jersey, and Catherine Wu, a senior at Saratoga High School in California. Seventh grader Jessica Wan of Puerto Rico took third place. A list of the winners can be found at the Art of Problem Solving website.

Honorable Mention awardees received $250 merit scholarships to the Canada/USA MathCamp summer program, and MIT Department of Mathematics Head Michel Goemans presented awards to the 2017 Advantage Testing Foundation Math Prize Olympiad winners, including Gold medalists Wanlin Li of New York and Yuting “Emma” Qin of California. The top 35 Math Prize performers are invited to compete in the next Olympiad in November 2018.

Emma Kerwin, a senior management major, gave a talk on why girls should stay interested in math, even if, she said, they are “the only girl in the room.” The highlight of the event for her is the camaraderie. “They don't just have girls do the contest and then leave,” said Kerwin, who competed in the Math Prize competition during her junior and senior year of high school. “There is also a focus on having fun and being part of a supportive community. This provides a much more holistic experience for contestants.”

More importantly, she said, the competition gives contestants a chance to meet other girls who are interested in mathematics. “The overall nature of the event is very empowering and is focused on celebrating contestants' capabilities and unique interests.”

MIT supports girls in STEM

The Math Prize board of advisers includes Michael Sipser, dean of the MIT School of Science and the Donner Professor of Mathematics; Gigliola Staffilani, the Abby Rockefeller Mauze Professor of Mathematics; Lauren K. Williams ’05, a math professor at the University of California at Berkeley; and Ioana Dumitriu, ’03, a math professor at the University of Washington. This was MIT’s 8th year hosting the contest.

“These competitors are the future problem-solvers in our field,” said Sipser. “It is critical to the advancement of mathematics to keep the pipeline of women into STEM programs strong, here at MIT and elsewhere. This contest accords these talented students the visibility and community necessary to support women who have the potential to pursue mathematics at a professional level.”   

The contest also creates a pipeline of talent to MIT, to which more than half of the top awardees have matriculated. “Every year, the girls who participate in this event never fail to impress us with their creative problem-solving skills and their enthusiasm for mathematics,” said Goemans. “This competition encourages more women into studying mathematics, and this is much needed.”

Because many high school mathematics programs face challenges in reaching the level of study required in the MIT mathematics curriculum, the department has designed programs to prepare students, including women, with supplemental education opportunities. These include the Summer Program in Undergraduate Research (SPUR) and SPUR+, (Summer Program in Undergraduate Research); the Directed Reading Program; Undergraduate Research Opportunities Program (UROP)  and UROP+; MIT Summer Research Program (MSRP); and PRIMES (Program for Research in Mathematics, Engineering, and Science).

Once they are at MIT, the department continues to support female math majors by arranging dinners and lunch seminars, encouraging them to mentor future women in mathematicians at middle and high school, and supporting the Undergraduate Society of Women in Mathematics and MIT Black Women’s Alliance. The Department of Mathematics also hosted February’s Graduate Workshop in Algebraic Geometry for Women and Mathematicians of Minority Genders.  

“The Department of Mathematics aims to be a strong advocate on behalf of girls and women interested in a STEM career,” Goemans said.

Math Prize board member Ioana Dumitriu recalled feeling supported as a doctoral student in MIT’s Department of Mathematics, but she also said she recalls being very aware of a dearth of women math majors and faculty. Now a math professor at the University of Washington, she said she has grown dismayed over how girls and boys are taught STEM in the United States. “Girls are getting the short end of the stick in this country,” she said. “I see that there is definitely disparity between the levels of encourage we give to boys and the encouragement we give to girls with respect to math and STEM-related fields.”

This need for encouragement is why she is passionate about her involvement in the Math Prize for Girls contest, as well as a driving force behind her involvement as a coach for the William Lowell Putnam Mathematical Competition.

“I see a huge difference self-confidence makes,” Dumitriu said. “It’s hard to attract female students (to the Putnam) because they come in and they see self-confident boys. That somehow discourages them from participating.”

The key to change this is faculty involvement, she said. “Seeing top mathematicians acknowledging your talents and your merits and congratulating you, that’s when you believe in yourself,” she said. “Role models are very important. I think that self-confidence is one of the biggest differences that one can make at this level.”

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3Q: David Simchi-Levi on advancing global retail operations through analytics and machine learning

Three technology trends are quickly changing global supply chains, revenue management, and the retail industry as a whole: digitization, analytics, and automation. But digital innovation does not come easily. Challenges include internal resistance to change, the siloing of data, and difficulty providing companies with the skills required to understand, predict, and change behavior.

The Accenture and MIT Alliance for Business Analytics has been collaborating with entities across multiple industries to take advantage of these technology trends to impact their business performance. Implementing machine intelligence and digital processes is a substantial opportunity for companies who are willing to innovate. Indeed, the difference between the companies that take advantage of these technology trends and those who do not is the difference between industry performance leaders and industry followers.

Data suggest delaying digital innovation could be a risk to a firm’s long-term health. The Alliance for Business Analytics recently collected data from hundreds of companies and found clear and definable differences between companies that are truly data-driven and those that either have not been successful in using data or have not made a serious attempt to use data in their business. Their study reports a direct relationship between the adoption of machine intelligence and digital business innovation and leading business performance indicators, independent of the industry. In the end, digital innovation not only impacts cost reduction, revenue, profit, and market share but it also affects customer satisfaction, retention, and experience. David Simchi-Levi, professor of engineering systems and of civil and environmental engineering, leader of the Alliance for Business Analytics, and member of the MIT Institute for Data, Systems, and Society, recently sat down to discuss the alliance's work.

Q: How are you working with industry to advance your research and application of your models?

A: Our research has been applied in many companies including Groupon, Rue La La, and a few airline carriers. This has resulted in improved efficiencies, risk mitigation, and significant revenue increase. We are actively working with most of the largest global retailers in the world. This is very exciting, as we're helping to shape the digital retail experience and improve results for both the industry as a whole and the consumer.

Students and postdocs in my analytics lab collaborate with companies across various industries to combine data science, machine learning, and optimization modeling. Together with these companies, we conduct in-depth research on supply chain, business-to-business and business-to-consumer demand prediction improvement, supply chain revenue, and operations optimization using data from across a company’s enterprise.

The companies we work with bring their challenges to us and our focus is on the integration of machine learning and optimization techniques in a way that solve these problems and create competitive opportunities. We work with each company’s internal data and relevant external data and their application environment where our team conducts the research. This enables the development of new approaches that decipher supply chain demand, increase proactive cognitive supply chain responses, predicts consumer demand and optimizes pricing.

This joint research environment is designed to yield powerful new capabilities to exploit data, machine learning and new innovative processes to deliver improved customer service, experience, and retention.

Once these new techniques have been implemented, companies have a new powerful data-driven platform that continues to learn, predict and optimize process and outcomes across the enterprise.

Q: How is technology affecting global supply chains and the retail industry?

A: Digitization, advanced analytics, and automations each enable three business opportunities: First is to improve operations. For example, the work I've done with my research team has provided Ford with the technology that applies data and analytics to identify hidden supply chain risks and develop the appropriate mitigation strategies. Similarly, the work I've conducted through the alliance has provided one of the largest mining companies in Latin America with analytics that uses data from thousands of sensors to improve product quality.

The second opportunity is to provide dynamic and customized offerings. Many retailers, both brick-and-mortar and online, use cost-plus when pricing their products, a simple strategy whereby price is determined by adding a pre-determined markup percentage to the product cost. In recent years, my lab has taken advantage of new opportunities provided by technology trends by applying them to optimize price at Boston-based flash sales retailer Rue La La, online market maker Groupon, and the largest online retailer in Latin America, B2W Digital (B2W). These examples are on-line businesses, which have readily available data and can change prices dynamically, but we also implemented similar methods for brick-and-mortar retailers in applications such as promotional pricing, new product introduction, and assortment optimization.

Finally, the third opportunity is to introduce new business models that were not possible before. This is nicely illustrated with the story of companies such as Rolls-Royce, General Electric, and United Technology. In all of these cases, the companies continuously monitor thousands of engines on commercial aircraft and use analytics to identify problems before they occur. They charge the carriers based on usage time while they are responsible for all maintenance and repairs. This allows the carriers to cut costs, engine downtime, and increase airline safety.

Q: Looking ahead, what do you suggest brick-and-mortar and online retailers should do to take advantage of current trends?

A: Recent trends present significant opportunities for many companies, particularly in the retail industry. But there is no one standard approach for digitizing the supply chain and becoming a data-driven organization. So, it's hard for executives to know where to start and how to integrate the various processes into an end-to-end strategy. That said, doing nothing is no longer a sustainable choice in the fast-paced digital world.

My experience is that to achieve value and scale, companies need to start a journey that involves defining the vision and value targets; identifying changes to the operating model, and organizational structure; and defining data and technology strategies. More importantly, these companies need to realize the future of their businesses requires attracting, motivating, and promoting people with new skills, people who can apply the data and analytics in an effective way.

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Does free flow of capital make the economy more efficient?

David Thesmar is an MIT professor who studies the growing influence of the financial sector over large economies. But here’s another way of summarizing his work: Thesmar is a scholar of the turbulence these changes have created.

“My main research topic is the anatomy of financialization,” says Thesmar, “and how the contractual arrangements that get made in the financial sector trickle down to the rest of the economy.”

By that, Thesmar means he studies the consequences of the global wave of financial development since the 1980s. This “financial deepening,” as he puts it, came from a combination of deregulation and technological change; it led to the emergence of hedge funds, private equity funds, the promotion of shareholder value maximization, and deeper and more liquid stock markets. 

Advocates of such financialization contend that it improves the allocation of funds to worthy firms, and that hard-nosed management helps productivity and output. Opponents suggest it damages viable firms and needlessly leaves workers unemployed.

Through careful empirical study of his native France, Thesmar has found that, true to conventional wisdom, “Banks are accelerating the failure of failing firms and accelerating the [growth] of expanding firms. Professional financiers basically reallocate capital, and you get more creative destruction in the economy.”

As a result, Thesmar adds, “the [effect] of finance is very similar to that of technical change or international trade, in the sense that it does the same thing: It creates more turbulence within the economy. It destroys and creates more, and it creates winners and losers all the time, at a faster rate. It churns people more.” The churn is the cost of having a better allocation of finance to firms.

But Thesmar’s research about all this turbulence also turns up some unexpected results. The improved allocation coming from financial deepening may not be as enormous as many would expect, an issue Thesmar is continuing to study.

“But how big [an effect] is it?” Thesmar asks. “What I seem to be finding is that it’s not that big a difference.” Yes, better finance decisions take funds out of poorly performing firms and reallocate them to better firms. But the aggregate size of this reallocation tends to be rather small, partly because successful firms already generate a significant amount of internal funds to finance their operations.

“It turns out the reallocations we observe are not from bad firms to the best firms,” Thesmar says. “It goes from the next-best firm to the better firm, and so the difference in productivity between the classes of firms, the losers and the winners, is not big.”

After years of influential work on such questions, Thesmar recently joined MIT, where he is the Franco Modigliani Professor of Financial Economics, a prestigious chair (Modigliani was an MIT economist and Nobel laureate), and a professor in the MIT Sloan School of Management.

Physics and finance

Thesmar’s presence in the U.S. economics orbit would have been hard to predict when he was young. He grew up in Paris, where his father was an art appraiser, and his mother was a lawyer.

“I guess I was much more into science than my parents were,” he says wryly. Thesmar had a long-running interest in physics, and he received his BA in 1995 in both physics and economics at the École Polytechnique. But eventually Thesmar became more interested in economics, and he earned his PhD from the Paris School of Economics, in 2000.

“What I found attractive about economics was its combination of rigor, like in physics, and of social science, because I was an avid history reader and follower of current affairs,” Thesmar says. Moreover, he adds, in his formative years as a student, “I had great teachers when I was at school, which is probably what also led me to study economics.”

Still, Thesmar did not immediately become an academic economist. First, he took a job at France’s statistical office, INSEE, where he studied business activity. This  turned out to be a crucial component of Thesmar’s career. INSEE had singularly comprehensive statistics on French firms. Before long, Thesmar was developing from-the-ground-up knowledge of the data — and formulating the kinds of research questions that information could address.

Finally, in 2005, Thesmar took a professorship at HEC Paris, a prominent French business school. He soon began publishing some influential papers, including two in 2007 that he still cites as being touchstones of his work.

Why family firms thrive

One of those papers, “Banking Deregulation and Industry Structure: Evidence from the French Banking Act of 1985,” written with two co-authors (including Antoinette Schoar, now an MIT professor as well), found that when France gave its banks more latitude to invest in other businesses, they aggressively reallocated capital away from struggling firms, giving empirical confirmation to the popular image.

On the other hand, another paper, “Performance and Behavior of Family Firms: Evidence from the French Stock Market,” found that family-run firms, which constitute two-thirds of publicly listed stocks in France, perform better than other corporations. Why? Essentially, these firms were “more parsimonious” in their spending, Thesmar found.

“Family firms tend to be productive and profitable,” Thesmar says. “The reason why they are profitable is they tend to pay their workers a little bit less, and the reason why they do that is, they take fewer risks. Because a company does not take risks, they are not having to fire their employees, and that is a kind of an insurance that people are willing to pay for, in the form of lower wages. They’ve got more job security.”

As deeply as Thesmar has dug into the financialization of firms, it is not the only subject he analyzes. He has also extensively studied the systemic shocks created by the market meltdowns in 2008; the effects of technological change on employment; and issues in the subfield of behavioral finance, especially how the structure of firms affects the decisions they make.

Thesmar’s move to the Institute has been made easier, he adds, because “I have great colleagues,” including several he currently works with, and others he has worked with in the past. And he looks forward to expanding his research portfolio at MIT. 

“It’s a fantastic place. It’s the center of innovation,” Thesmar says. “It’s something you feel very strongly when you come here, the energy around campus. People are very serious about the progression of academic science.”

de MIT News https://ift.tt/2NLXDT9

One man’s flying car dream is taking off, thanks to MIT

Most children dream about fabulous flying machines. For electrical engineer Felipe Varon, it was a flying car. Now, a prototype he's developed is making test flights in his native Colombia, thanks to his experience with MIT Professional Education.

“As a child, I dreamed about flying,” says Varon, a graduate of MIT Professional Education’s Professional Certificate Program in Innovation and Technology. “But I don’t want just a cool toy. I want something with social impact to help people and cities. Something people can use today, not in some future time.”

Varon says MIT Professional Education (PE) provided the knowledge, training, and ideas he needed to upscale his invention in size, power and capability, and for strategies to finance, market, and mass produce it. In 2018, he completed courses including Beyond Smart Cities and Radical Innovation, Mastering Innovation and Design-Thinking, and Precision Engineering Principles for Mechanical Design.

MIT PE Executive Director Bhaskar Pant says entrepreneurs and innovators like Varon “are at the heart of our student population.”

“He is a great example of how people use knowledge gained from our certificate programs to drive innovation and leadership towards meaningful change,” Pant says.

A flying car was the subject of Varon’s 2006 graduate thesis at the Universidad Externo de Colombia.

“I put together this machine,” he says. “I knew a motor and propellers could make it fly, kind of like a table with four legs.”

Varon could be describing a drone, and the skies were already full of them. But he took drone technology to the next level. The company he founded with two partners, Varon Vehicles Corporation, built a prototype flying car designed to travel in its own lane, at low altitudes, safely clear of both land-bound and aeronautic traffic.

The car looks like a shiny red, two-seated blend of a Batmobile and Agent 007’s Aston Martin. The vehicle is entirely electric, with neither wheels nor wings, and Varon’s company logo — a multi-layered “V” — on the hood.

“It’s very simple,” he says. “It doesn’t have any dials, buttons or strange pilot stuff. It steers just like a car. We’re trying to make it drivable by anybody. A computer does all the work.”

The design of the car has the sheen of power and luxury, which belies the high-flying altruistic purposes Varon and his partners foresee for their low-flying dream pod.

“We’re not focused on designing and building flying cars to sell them,” Varon says. “It would be for a service. And if I can get away with it, I would like the service to be free.”

He says it could go where traffic and congestion are a problem, or there’s a lack of public transportation.

“In developing countries, you have areas with low accessibility, low quality of life,” he says. “Nutritious food and other necessities can’t get to those in need. It would take an hour and a half to reach them. A flying car would take only 17 to 20 minutes.”

Varon and his partners did a soft-launch for the prototype in Colombia and received positive feedback. He says he’s also been invited to launch it in European countries and is in conversation with aeronautical regulatory authorities there. Similarly, he hopes to approach the Federal Aviation Administration in the U.S., and is looking at a possible test site in Texas.

“We’ve tried to identify a market niche within an industry that hasn’t even appeared yet,” Varon says. 

Varon is still searching for a clean power source. 

“We’re clean at the point where we charge,” he says, “but what happens behind the grid?”

He envisions someday sharing assets with a hydro-electric power entity. “We don’t want to have a (negative) environmental impact,” he says. “We want to have a favorable social and economic impact, even providing jobs. We’re going to have a fleet of cars, so we’re going to need a fleet of drivers.”

de MIT News https://ift.tt/2OSDvvg