Forecasting, Technological

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FORECASTING, TECHNOLOGICAL

In order to effectively prepare business strategies in the technologically fast-paced worlds of e-commerce, information technology, and the global economy, it has become important for companies and policy makers to look into the future with sophisticated models and techniques to determine the course of technological change. The field of technological forecasting, more commonly referred to as foresight studies, emerged as an energetic and vibrant area of study and practice in the 1960s. Although its methods and, more importantly, its purposes have shifted, it has continued to develop into the 21st century. By the early 2000s, the United States—and indeed much of the global economy—was entirely dependent on rapidly developing information technology and other sophisticated technologies, operating in the context of increased organizational complexity. Thus, technology was not only increasingly important and influential, but its pace of development was accelerating, rendering the task of foresight studies all the more significant and challenging.

While the 1960s witnessed the coalescence of various practices and techniques into a coherent and systematic field of study, the roots of technological forecasting reach back even further. According to Technological Forecasting and Social Change, perhaps the first organized and systematic attempt at comprehensive technological forecasting was the study—conducted under the auspices of President Franklin D. Roosevelt's National Resource Commission in 1935—of the likely future of 13 major inventions for the purpose of assessing their possible social and economic impacts. However, it was in the 1960s, when post-World War II economic development produced rapid and influential technological innovations, that researchers began to systematically organize the field and devise a number of standard observations and techniques.

The S-Shaped Logistic Curve is a technique that highlights an S-shaped technological development curve divided into three stages: the relatively lackluster period of initial growth, in which the emergent technology struggles to distinguish and assert itself as a viable force against its competitors; the subsequent period of accelerated growth once the technology has proven superior and proceeds to edge out existing technologies; and the maturation stage, characterized by a leveling off of growth patterns as the technology reaches an equilibrium with its economy. To take maximum advantage of the S-shaped curve, businesses employ sophisticated mathematical models. These pinpoint the most advantageous strategy of exploiting the technology's natural growth.

Envelope curves involve a series of S-curves based on the development of successive generations of particular technologies. In this scenario, each generation improves upon its predecessor, creating an overall envelope curve of the generations' individual S-shaped curves. In this way, analysts can study the development of technologies over time and devise methods for the extrapolation of knowledge into the future.

At the heart of foresight studies was the Delphi Method, which takes its name from the prophetic oracle of Greek antiquity. First developed by the Rand Corporation, the Delphi Method assumes that the best source of predictive information for any given technological field is the technical experts in that field. Thus, building a technological forecast begins with simply querying a committee of experts as to where they believe the technology is headed. To avoid the biases of or pressure from dominant players in the field, the Delphi Method insists that experts participate in such a committee anonymously. Once panel members are assembled—by virtue of peer selection, honors and awards, involvement and rank in a professional society, or other qualifications—the director of the Delphi procedure queries members individually on the course of development for that particular technology. For instance, the director may ask an expert his or her opinions as to the likely timing and impact of certain technological breakthroughs. After each round of questioning, the directors analyze the information derived from that round and organize it for panel members to consider in the next round. Panel members analyze the reasoning behind other members' predictions and reconsider their own views; through an iterative process, members come to reach a viable consensus in their predictions. After a satisfactory consensus is achieved, the director organizes the findings into a final report, upon which a company bases its own technological forecast and accordant strategies.

Technological forecasting covers a wide swath of analytical activities. In addition to the effort by businesses to map out commercially viable roadmaps for technological development, the field includes more social and diffuse measurements as well. For example, governments use national foresight studies to assess the course and impact of technological change for the purposes of effecting public policy. This includes what is known as technology assessment (TA) or social impact analysis, which examines the likely long-term effects of technological development as its impact spreads throughout society. Meanwhile, the uses of technological forecasting are influenced by the attitudes of companies, governments, and individuals about the nature and course of economic competition, the involvement of government in technological development, and so on.

For years, the thrust of technological forecasting was on assessing the likely development and characteristics of useful inventions, and forecasts were measured by the extent to which predictions proved accurate. According to Technological Forecasting and Social Change, the difficulties of forecasting amidst great uncertainty were partly responsible for the decline in foresight studies' popularity in the later 20th century. However, the needs of forecasters also shifted as the century drew to a close, with an increasing emphasis on the potential for market exploitation as the thrust of technological forecasts. Thus, the focus of technological forecasts in the 1990s and early 2000s extended beyond mere technical aspects to include more comprehensive views of particular market conditions and the effects of technological development thereon. In the economic environment of the early 2000s, driven as it was by the development of information technology, the criteria for evaluation of technological forecasts shifted to whether such forecasts gave executives useful information upon which to base their strategies. Technology forecasting is now likely to examine, first and foremost, how a company can most effectively make use of technology to respond to market dynamics and enhance profit margins. Foresight studies also can help companies to establish their priorities in light of long-term assessment of technological and market conditions.

Foresight studies not only encompass methods and techniques for technological predictions, but also the focus on strategic research and the benefits and potential disadvantages or ill effects of specific technologies. Foresight studies will try to incorporate all available information in order to devise a series of possible futures rather than one set course of development. In doing so, any successful foresight study will avoid too much certainty in its prediction of various influential conditions. In other words, studies need to account for a degree of uncertainty in their variables. Other factors foresight studies need to take into account include the independent development of technologies in other industries that could affect the market dynamics of one's own technological field. Most crucially, technological forecasts should take into consideration the possible development of technologies from other fields that could spill over and affect the course of development in the field directly studied.

Propelled in no small part by growing concerns over the environmental effects of technological developments, recent years have witnessed an expansion in the range of individuals consulted for useful forecasting information. Going beyond technical experts, this includes a sample of the individuals or groups that are likely to be affected by particular courses of development. For instance, a government undertaking a social impact analysis as an element of a national foresight study might consult with environmental and consumer groups to gauge the likely effect of development on their interests, behavior, and attitudes. Meanwhile, a corporation may choose to bring in customers and academics to balance the opinions of the fields' scientific experts.