288 BELL SYSTEM TECHNICAL JOURNAL 



inevitable. The industry is not highly mechanized, however, and hence 

 its present cycle of inflation does not imply so large an expenditure for 

 plant as would be true in most manufacturing fields. For this reason, 

 the period of deflation may prove to be one of large war profits in the bank, 

 but insuflBcient orders to occupy the time of many competent technical 

 men whom the management would be reluctant to let go. If this should 

 occur, an almost explosive development of research may take place. 



Whether the development is explosive or not, however, it is probable 

 that the industry will soon become one of the largest employers of industrial 

 mathematicians. 



Industrial Statistics and Statisticians 



The subject of statistics enters the business world at points quite dis- 

 tinct from those touched by the rest of mathematics. Moreover, the types 

 of business activity to which it most frequently applies — insurance and 

 finance, economic forecasting, market surveys, elasticity of demand against 

 price, benefit and pension plans, etc. — belong to the field of economics which 

 is the subject of a separate report, and need not be touched on here. 



There are certain other respects in which statistical theory could be 

 of great service in industry, but they have been exploited to only a limited 

 extent. This report must therefore point out these hopeful fields rather 

 than record achievements in them. 



Statisticians in Industry 



By "statistician" we mean a person versed in and using the mathematical 

 theory of statistics, not one who collects, charts and scrutinizes factual 

 data. In the business world the word is more often used in the latter sense. 



There is a very great difference between the number of statisticians 

 in industry, and the number of men interested in some form of statistics. 

 How great the discrepancy is will be clear from a comparison of the mem- 

 bership of the American Statistical Association, which devotes itself to the 

 application of statistics in its broadest sense, and of the American Institute 

 of Mathematical Statistics, which confines itself narrowly to the develop- 

 ment of statistical technique. The former lists 277 names with industrial 

 addresses; the latter only 10. 



Statistics in Industry 



Dr. W. A. Shewhart, Research Statistician of the Bell Telephone Labora- 

 tories, has delineated broadly and succinctly the field in which statistics 

 may be expected to find application as follows: 



