In an interview shortly after the American economist, Paul Milgrom won the 2020 Nobel Memorial Prize in Economic Sciences for improvements to auction theory and inventions of new auction formats, he said: “People had no clue of how… to even approach it, and so we put together a practical design which has subsequently been used round the world.”
Implicit in that sentence is the embracing of challenge, something that the Oxford-based Smith Institute does every day and why it has been awarded a prestigious 2021 Queen’s Award for international trade through its own pioneering work in spectrum auctions worldwide.
As the consultancy’s CEO, Dr Heather Tewkesbury said: “We’re not afraid to take on some of those really difficult challenges, where there is no prior art in how to solve some of them, and apply mathematics techniques, sometimes creating new ones, to try and address them. That’s what we love doing and creating value to our customers in doing that.”
The Smith Institute was set up in 1971 by Dr Bruce Smith (who worked on the moon landing mission in 1968) and its stated vision is to “bring the boundless potential of mathematical ingenuity to the everyday world.”
Beneficiaries of both that joy and ingenuity include a huge array of stellar clients, from Vodafone to Coca-Cola, from the National Grid to the French state owned EDF.
And last year the Institute supported the US Federal Communications Commission to deliver their most complicated auction to date, by providing Independent Verification and Validation Testing of algorithmic components in the auction bidding systems.
According to their Chief Technical Officer, Dr Robert Leese: “We become involved in difficult high value problems where some kind of fresh thinking is needed.
“What makes us different is that we are leveraging advanced mathematics to solve problems across multiple sectors and we have a team of PhD level mathematicians who like tackling hard industrial business problems.”
The Smith Institute doesn’t confine itself to particular sectors but has specialist domain knowledge in Energy, Telecoms, Transport, Security and FMCG. Mathematical ways of thinking are highly transferable and the team’s adaptability means that they often see the germ of a solution to one challenge in something that has been in a completely unrelated area, and they take advantage of that.
The organisation’s first foray into spectrum auctions was in 2007 with the UK regulator Ofcom, regarded as something of a pioneer in the field. They were therefore well placed from 2012 to bring their rigorous mathematical approach to similar opportunities arising overseas.
Dr Leese said: “There are some sectors that are a good fit to what we offer and that are undergoing major change, like telecommunications where the whole roll out of mobile services has gathered at pace over the last 20 years and shows no sign of letting up. That is behind the work for this award.
“Many sectors have a lot of difficult problems to solve – energy and renewables and transport for example, and the old ways don’t work anymore. So, areas that we naturally get involved in are where ‘business as usual’, for whatever reason, is not an option.”
As the world gets to grips with the fourth industrial revolution and big data and with telecommunications especially having turned into a highly competitive industry, the kudos and profile of a Queen’s Award for the Smith Institute is likely to see its insight in greater demand for years to come.
“I think it represents and reflects a lot of the work that we do,” said Dr Tewkesbury, “where we have staff who are really dedicated to trying to explore problems, find solutions using this very technical background and not being afraid to take on the most difficult challenges of our age.”
To find out more visit www.smithinst.co.uk