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It was the Irish dramatist George Bernard Shaw who once wrote, “If all the economists were laid end to end, they'd never reach a conclusion.”

But at least in 2019 terms, Shaw was wrong.

These days, if you laid all the economists end to end, they’d likely end up in Seattle … because, as CNN reports, Amazon reportedly has hired “more than 150 PhD economists, making it probably the largest employer in the field behind institutions like the Federal Reserve, which has hundreds of economists on staff. It was the only company with a recruiting booth at the American Economics Association's annual conference in January, handing out free pens and logoed stress balls.”

To put that in context, the talent pool of PhD economists in the United States grows by about 1,000 new graduates every year.

Here’s how CNN explains the hiring strategy:

“Unlike economists in academia or government, the work of Amazon's economists is almost entirely secret, and staff are required to sign non-disclosure agreements to keep it that way. But according to background interviews and Amazon itself, integrating economists has been critical to the company's phenomenal growth in e-commerce.

“Amazon's economists game out real estate decisions, set the lowest prices that will deliver a profit, precisely determine what customers care about and whether advertisements are working — all using machine-learning algorithms that automate decisionmaking on a massive scale. It's the kind of asset that smaller companies can't always pay for, allowing Amazon to pull further and further away from the competition.”

The story notes that “economists are not new to private companies, where they've long helped forecast macroeconomic conditions to guide strategic decisions about what to produce, which markets to enter and where to source raw materials. They're not even new to the tech industry: Companies like IBM, Intel and Microsoft have had them for decades.”

At Amazon, the company deploys the economists across the company’s many divisions, using them to build risk models as well as “advise on product design and engagement tracking for devices like Alexa and Kindle, help target customers for its booming cloud services business, and forecast server capacity needs for the consumer website.”

And here’s the really good news for Amazon’s economists - the company pays really well, better than most places that hire economists: “Even rank-and-file economists make up to $160,000, which is where all Amazon employees top out in base salary, with stock options that make their total compensation a lot higher.”
KC's View:
This story plays into the common - and seemingly accurate - perception that while almost everybody else is playing checkers, Amazon seems to be playing three dimensional chess.

That’s not to say you cannot compete against such companies.

You can.