Technology Forecasting: Technology Forecasting‐ Characteristics of
technology forecasting ; Technology forecast method; Principles of
technology forecasting, Technology Forecasting Process, Need and Role of
Technology Forecasting, Forecasting Methods and Techniques, Planning
and Forecasting.
Technological Forecasting
Technology forecasting is a group of techniques that predict the direction, character, rate,
implication, and impact of technological advances. It can also be defined as a prediction of
the future characteristics of useful machines, procedures, or techniques. Anticipation of the
character, intensity, and timing of changes in technology. Technology Foresight is a combination
of creative thinking, expert views and alternative scenarios to make a contribution to strategic
planning.
Why Technological Forecasting?
It is Indispensable
It improves Quality of Decision making
Scanning the technological environment
Anticipating emerging technological changes
Identifying suitable technologies by evaluating various alternatives
Planning for future technology needs.
Technological Forecasting Model
The development of a technology forecast can be divided into three separate actions:
Framing the problem and defining the desired outcome of the forecast,
Gathering and analyzing the data using a variety of methodologies, and
Interpreting the results and assembling the forecast from the available information.
Framing the problem concisely is the first step in generating a forecast. This has taken the form of a
question to be answered. In addition to devising a well-defined statement of task, it is also important
to ensure that all concerned parties understand what the ultimate outcome, or deliverable, of the
forecast will be. If a forecast is to be successful, the decision maker needs to be provided with a
product consistent with what was expected when the process was initiated. One of the best ways to
assure that this happens is to involve the decision maker in the forecasting, so he or she is aware of
the underlying assumptions and deliverables and feels ownership in the process.
Data are the backbone of any forecast, and the most important characteristic of a data set is its
credibility. Using credible data increases the probability that a forecast will be valuable and that
better decisions will be made from it. Data can come in a variety of forms, but the data used in
forecasting are of two types: statistical and expert opinion.
For statistical data, the criteria are these:
Currency. Is the timeliness of the data consistent with the scope and type of forecast?
Historical data are valuable for many types of forecasts, but care should be taken to
ensure that the data are sufficiently current, particularly when forecasting in dynamic
sectors such as information technology.
Completeness. Are the data complete enough for the forecaster(s) to consider all of
the information relevant to an informed forecast?
Potential bias. Bias is common, and care must be taken to examine how data are
generated and to understand what biases may exist. For instance, bias can be expected
when gathering data presented by sources who have a specific interest in the way the
data are interpreted
Gathering technique. The technique used to gather data can influence the content.
For example, subtle changes in the wording of the questions in opinion polls may
produce substantially different results.
Relevancy. Does a piece of data have an impact on the outcome of the forecast? If
not, it should not be included.
For data derived from expert opinion, the criteria are these:
Qualifications of the experts. Experts should be carefully chosen to provide input to
forecasts based on their demonstrated knowledge in an area relevant to the forecast. It
should be noted that some of the best experts may not be those whose expertise or
credentials are well advertised.
Bias. As do statistical data, opinions may also contain bias.
Balance. A range of expertise is necessary to provide different and, where
appropriate, multidisciplinary and cross-cultural viewpoints.
The data are an input to the forecast, and the conclusions drawn from them depend on the
forecasting methodologies. In general, a given forecasting methodology is suited to a particular type
of data and will output a particular type of result. To improve completeness and to avoid missing
relevant information, it is best to generate forecasts using a range of methodologies and data.
Planning the exercise and getting started
When planning to start either forecasting or foresighting it is useful to consider:
The reasons for doing it.
What resources will be needed and what resources can be made available.
How long will it take?.
How to learn the techniques and improve the overall process?
Establish the need
In order to assess if a more systematic approach will be useful the following factors can be
considered:
The criticality of technologies used by the company.
The maturity and rate of change of critical technologies.
The nature of the R&D strategy, (eg whether offensive or defensive).
The complexity and flexibility of markets and the overall business environment.
The magnitude and direction of technological progress in general is driven by financial
investment and by market forces and needs; these must also be watched and monitored as
part of any forecasting activity.
Co-ordinating resources
Decisions must be made about who should manage the forecasting process. It is not a task for
a junior member of staff. It may need a multidisciplinary team or a single individual with
adequate authority to co-ordinate across several departments. In all cases the exercise should
first seek to use the knowledge and expertise of individuals within the company. Their
specific knowledge of company activities and processes will be useful; much additional
information can also be gleaned from their contacts and networks and from their appreciation
of the general business environment.
Establish and improve the process: forecasting
The process has two primary activities: information gathering and analysis. The value of the
overall process to each company depends on how the two main activities are carried out, how
the techniques are customised, and the extent to which the process is followed through to
recommendations and actions. They are often applied in iterative or parallel processes. It is
not necessary to complete the whole process to appreciate the potential benefits so the
process reinforces itself and encourages further iterations.
Activity 1: collection of relevant information
The major issues to be addressed are:
◦ What information and what kind of data are relevant?
◦ What sources of information are to be used?
◦ How accurate is it?
◦ What systems need to be set up to provide information and data on
technological developments and trends?
Practical decisions arising from consideration of these issues include:
◦ Which journals to monitor, and how.
◦ Which conferences and trade fairs to attend.
◦ How to share information.
◦ Who should participate in which networks.
◦ How can an individual’s relevant expertise best be used?
◦ What internal data to collect and external data to acquire.
◦ How to track performance parameters of competitors’ products?
Activity 2: analysis of the data by individuals and by various methods and techniques
The major issues to be addressed are:
Whose expertise should be used?.
Which methodologies or techniques are appropriate?.
Against what criteria or objectives are the analyses to be judged?.
What data should be used or is relevant?.
Who are the relevant people to apply the techniques to the data?.
Decisions following from considerations of these issues could result in a greater
understanding of the potential contribution and judgement of different experts, within and
without the company; more tightly formulated objectives; and a greater understanding of the
value of forecasting in general.
Establish and improve the process: foresight
Foresight activity seeks the subjective or intuitive opinions of a number of people with
varying degrees of expertise. Opinions need to be collected without bias or misinterpretation.
Using different techniques, some more structured than others, experts are asked to project
their present knowledge towards how events and trends might develop in the future. They
also need to consider what alternatives might be possible within the projected time frame.
When setting up a foresight programme it is important to consider:
What kind of expertise is relevant and how can it be obtained.
What boundaries to the creativity of the process have to be imposed.
How can the exercise be aligned to the needs of the organisation that is
commissioning the study.
Essentially, technology forecasting is used for the purpose of :
a) Scanning the technological environment,
b) Anticipating emerging technological changes,
c) Identifying suitable technologies by evaluating, various alternatives,
d) Planning for technologies for future needs.
We can identify four elements of a forecast which can be specified and/or
estimated. These are
(a) the time period,
(b) the nature of technology,
(c) the characteristics to be exhibited by the technology, and
(d) the probability associated with the characteristics.
ROLE OF TECHNOLOGY FORECASTING
The forecast serves as an input to the process of making plans and decisions.
Martino has described the role of the forecast in planning as follows :
a) The forecast identifies limits beyond which it is not possible to go,
b) It establishes feasible rates of progress, so that the plan can be made to
take full advantage of such rates; conversely it does not demand an
impossible rate of progress,
c) It describes the alternatives which are open and can be chosen from,
d) It indicates possibilities which might be achieved, if desired,
e) It provides a reference standard for the plan. The plan can thus be
compared with the forecast at any point in time, to determine whether it can
still be fulfilled, or whether, because of changes in the forecast, it has to be
changed, and
f) It furnishes warning signals, which can alert the decision maker that it will
not be possible to continue present activities.
