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NEW YORK (Reuters Breakingviews) - Harry Potter's upcoming 20th birthday is a good occasion to add some magic to predictive power. It's a well-worn tale that, before the boy wizard first hit British bookshelves on June 26, 1997, author J.K. Rowling was turned away by dozens of agents and publishers who couldn't see the value of investing in such a fantastical yarn. Similarly closed minds help explain why recent political upheavals have surprised many and economic outlooks are so often wrong. A little imagination could help.
The two-decade mark is a good time to take stock of the success spawned by occurrences at Hogwarts School of Witchcraft and Wizardry. More than 450 million copies of the seven books have been sold around the world. The global box office for the related movies is over $8 billion and rising.
NBC Universal's theme park revenue has grown strongly since it opened its Harry Potter attraction in Florida in 2010. A new TV deal with the Comcast-owned company will generate still more galleons. There are countless T-shirts and toy wands, as well as a West End play inspired by Rowling's characters.
Not even Albus Dumbledore could have seen it all coming, but just a bit of vision might have prophesied at least a modest-selling children's series. The same can be said for economists who failed to anticipate the dozens of downturns around the world in 2008 and 2009.
Even when Hollywood does the advance work by dreaming up disaster scenarios, risk assessors fail to pay attention. Low-probability tragedies such as the Deepwater Horizon debacle and the Fukushima earthquake and tsunami were widely underestimated by companies, politicians and investors. In Silicon Valley, where venture capitalists are generally open to some of the wildest ideas, many have rejected and missed out on big successes including Airbnb.
Bad data, modeling errors and general randomness all can easily be blamed. Just as often, however, confirmation biases and tendencies to fall back on conventional analysis or wisdom create blind spots. That is how world leaders and investors ended up so thoroughly bewildered by Donald Trump's election victory and Britons voting to withdraw from the European Union.
There are no spells to help Muggle forecasters get it 100 percent accurate. To encourage creative thinking, however, perhaps they should add a column to every spreadsheet labeled "Patronus," the positive force that acts as protection in the wizarding world. And when building a library of inspirational business books for 2017, be sure to add "Harry Potter and the Philosopher's Stone."
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