According to the Wikipedia article by the same name,

“The wisdom of the crowd is the process of taking into account the collective opinion of a group of individuals rather than a single expert to answer a question. A large group’s aggregated answers to questions involving quantity estimation, general world knowledge, and spatial reasoning has generally been found to be as good as, and often better than, the answer given by any of the individuals within the group. An intuitive and often-cited explanation for this phenomenon is that there is idiosyncratic noise associated with each individual judgment, and taking the average over a large number of responses will go some way toward cancelling the effect of this noise.

When Katharine Peacock, Managing Director of ComRes said to me after the “Capital 500” London Quarterly Economic Survey on 7/7/2014 that I should “follow the crowd” I was taken aback. After some introspection I now know why. I come from a Jamaican culture where following the crowd or “wagonism” is seen as the path of lesser minds. We have a history of being led by politicians who deceive and manipulate the crowd towards its own nefarious ends. There have been other times when through sheer incompetence, naivety or greed the mass of Jamaican society has been led astray. Who can forget the great ponzi scheme Cash Plus which wiped out many affluent Jamaicans. I was informed by this position and it was from this viewpoint that I had asked her “What if we are all wrong?”

I was referring to the confident if subdued picture painted by the results of a business survey of five hundred leading businesses in the capital, the Capital 500, which reflected a confident outlook on the economic prospects of doing business in the UK.

Of course we can’t all be wrong as we all make up society and if we all band together and say it is so then, barring the laws of nature, it will be so. But the small man can be wrong even in a sea of optimism and that was what I was concerned about. What if we are all wrong was my way of asking what if I am all wrong?   

With my fear and pessimism I almost left but Vicky Price, (Chief Economic Advisor, CEBR, and former Joint Head, Government Economic Service) called me back after noticing that I had been trying to catch her eye for a networking chat.

I put the same question to her in the light of the tendency towards group think. I also gave her a specific example. What if I encouraged my backers to invest in training and the government contracts did not materialize what would we do then? Her advice was to not look to economists as if they had all the answers. With research and through slow steady steps we should be willing to take risks. She also reassured me that based on the science of the wisdom of the crowd it was foreseeable that the UK would grow over the next two to three years.

What this means to you [Caribbean Professionals]

I can’t tell you to follow the crowd; even if the crowd is right. What I can tell you to do is to follow the research you have done including that of the thinking of the crowd and individual experts along with your own ability to take risk. Britain is a great place to work and it will become better over the next two to three years. The pound is doing well and what that means is that your family back home in the Caribbean could benefit from this.

With that bit, here are some facts from the “Capital 500”:London Quarterly Economic Survey. It tells us what the group is thinking.

Confidence figures for the next 12 months were up. The balance figure for turnover expectations was +32%, as 47% of the Capital 500 businesses anticipate an increase in turnover in the year ahead and 15% anticipate a decrease.

Asked about what they expected to happen to their company’s economic prospects over the next 12 months, 40% of the Capital 500 businesses expected an improvement and only 8% a deterioration, leaving a balance figure of +32%.

57% of the Capital 500 businesses expect the UK’s economic growth to improve over the next twelve months, while only 7% believe it will worsen, leading to a balance figure of 50%.

The balance figure for investment in training was +4% in Quarter two of 2014.

Only 6% expect their workforce size to decline, compared to 16% anticipate an increase.  

 

My name is Peter Campbell representing the people of the Caribbean here at the London Chamber of Commerce and Industry.