1. 1 Technology Forecasting Introduction to Technology Forecasting Strengths and limitations of market trials for new technology

2. 2 Introduction What is Technology? The Evolution of Technology Technology Forecasting Technology Forecasting Taxonomies Objectives of Technology Forecasting The Need for Experts

3. 3 What is Technology? There is much ambiguity in the use of the term “technology” In one sense technology embodies the totality of the way we do things. Webster’s 7th Collegiate Dictionary defines technology as “the totality of the means employed to provide objects necessary for human subsistence and comfort”.

4. 4 What is Technology? “Western Technology” refers to the totality of the way things are done in the Western nations of the world. This is not the way we will use the term. In another sense, technology has a more restricted definition “the tools, techniques, and procedures used to accomplish some desired human purpose”. For example, metal cutting technology or nuclear power technology.

5. 5 What is Technology? This more restricted definition is more suitable for our purposes. Technology includes not only goods but also services Technology is not restricted to hardware, it also may includes “know- how” and “software”

6. 6 The Evolution of Technology Prior to the 19th century technology could be differentiated from other human activities by its direct involvement with the material world Persons involved in technology shaped and altered their physical environment Other forms of activities, like politics, were clearly distinguishable from technology Technological activities did not have particularly high status; artisans were considered inferior contemplative activities were glorified

7. 7 The Evolution of Technology By the end of the 19th Century Physical sciences began to influence technology laboratories were a source of invention scientific grounding added credibility to technology Science and Technology became partners to the benefit of both

8. 8 The Evolution of Technology During the early 20th Century Large laboratories emerged; often they were mission oriented Science and technology became institutionalized as a means to achieve National and corporate objectives

9. 9 The Evolution of Technology Post World War II Advances in applied mathematics lead to the emergence of operations research, information theory, and systems engineering In conjunction with the growth of computing power, the information revolution was sparked

10. 10 The Evolution of Technology At the end of the 20th Century the line distinguishing technology from other activities has become blurred technology is becoming a measure of national power Technology leads to competitive advantage aerospace, chemicals & plastics, petrochemicals drugs, electronics, engines, machines, computers, radio, tv, telecommunications

11. 11 Technology Forecasting Three definitions of technology forecasting from leading experts Technology forecasting is A group of techniques that predict the direction, character, rate, implication, and impact of technological advances Vanston

12. 12 Technology Forecasting A prediction of the future characteristics of useful machines, procedures, or techniques Martino Anticipation of the character, intensity, and timing of changes in technology Porter

13. 13 Can Technology be Forecast? Three rationales support the claim that technology can be forecast Examination of the historical growth of technological capability (speed, power, etc.) shows surprisingly ordered patterns continuity seems to be the norm discontinuities are rare This leads to trend extrapolation techniques

14. 14 Can Technology be Forecast? Technological development responds to opportunity and need It is also sensitive to allocation of resources and social control through regulation By monitoring influencing factors, progress can be anticipated This leads correlation techniques

15. 15 Can Technology be Forecast? Understanding the process of technological innovation aids in successful prediction of technological development Orderly progression of emergence New knowledge acquired Technology emerges from lab Technology is field tested Technology is commercialized Technology is widely adopted

16. 16 Technology Forecasting in Context Technology forecasting has not attained the level of “laws” It is still more art than science inherent complexity of the systems social, political, economic, ethical influences lack of significant data bases Experts are required

17. 17 Technology Forecasting Taxonomies There are multiple ways to classify technology forecasting techniques Exploratory vs. Normative Exploratory techniques seek to predict the state of a technology area in the future Normative techniques seek to determine courses of action to achieve a postulated future state

18. 18 Technology Forecasting Taxonomies Porter, et al. suggest Direct directly forecast parameters of the technology Correlative forecast growth or change by forecasting elements in the technology’s context Structural formally consider interactions between the technology and its context

19. 19 Technology Forecasting Taxonomies Kostoff suggests: Bibliometric or literature based methods data mining from large databases followed by application of visualization and analysis tools Workshop methods groups of subject matter experts who interact under the auspices of nominal group techniques (e.g., the Delphi procedure) to develop scenarios and forecasts the evolution of technology

20. 20 Technology Forecasting Taxonomies Vanston suggests: Surveillance Passive observational techniques Projective Future will be like the past Normative future needs drive technological development Integrative advances are driven by relationships

21. 21 Objectives for Technology Forecasting The first step in a technology forecasting project is to determine the purpose the forecast is to serve. Vanston suggests five purposes Projections of the rates at which new technologies will replace older ones Important to companies dependent on the old as well as the new technology

22. 22 Objectives for Technology Forecasting Assistance in the Management of Technical Research and Development Forecasting the technology emergence process can facilitate allocation of R&D resources Evaluation of the Present Value of Technology Under Development Forecasting the commercial value of a technology in the development process

23. 23 Objectives for Technology Forecasting Identification and Evaluation of New Products or Processes that May Present the Organization with New Opportunities or Threats Forecasting new business opportunities or threats to present markets

24. 24 Objectives for Technology Forecasting Analysis of New Technical Developments that Might Change Organizational Strategies or Operations Forecasting technology changes that might change the internal operations of the organization itself.

25. 25 The Need for Experts Gathering and analyzing the opinions of experts is an important activity. Three types of experts are valuable in technology forecasting generalists with a spread of interests and perceptions persons with deep knowledge of the area persons whose present or future actions may be affected

26. 26 Expert Opinion Three circumstances No historical data Impact of external factors is more important than the factors that governed the previous development of technology Ethical or moral considerations dominate

27. 27 How to obtain expert opinion? Committees Advantages Synergy Total is greater than the sum of the parts

28. 28 Disadvantages Misinformation Social pressure Group takes on a life of its own Repetition of arguments can influence opinion Vulnerability to dominant individuals Vested interests Entire group may share common biases

29. 29 How to counteract this? Structured group processes Delphi Process Nominal Group Technique

30. 30 Delphi Process Developed at the Rand Corporation as a means of extracting opinion from a group of experts. First dealt with a series of technological forecasts Not just a Technology Forecasting method, however…

31. 31 Delphi Process Conducted in rounds Panel (participants) are not physically together Panel answers directed survey questions Moderator has responsibility for compiling and feeding back the input.

32. 32 Three characteristics Anonymity Iteration with controlled feedback Statistical group response

33. 33 Anonymity Avoids the possibility of associating responses with specific individuals Participants can change their minds without publicly admitting he/she has done so.

34. 34 Iteration Interaction is conducted through responses to questionnaires Moderator extracts pertinent information

35. 35 Statistical Group Response What kind of output do most groups produce? Delphi Presents a statistical response Opinions of entire group Statistics that describe both the “center” and the “spread”

36. 36 Round 1 Typically is completely unstructured Anticipate events or trends in the technology of interest Questionnaires returned to moderator to compile Similar items are combined, some dropped, events stated as clearly as possible This is the questionnaire for the second round

37. 37 Round 2 Consolidated list of events Asked to estimate time of occurrence Moderator prepares statistical summary

38. 38 Round 3 Third questionnaire consists of the set of events and the statistical summary Events, medians and quartiles Asked to prepare new forecasts for each event If their forecasts fall in the upper/lower quartiles, they are asked to support their position.

39. 39 Round 3 (cont’d) Moderator prepares a statistical summary of forecast and summary of arguments Arguments/positions/objections are advanced just as they would be in a face-to-face meeting but, interaction is anonymous and written.

40. 40 Round 4 Questionnaire consists of Lists of events Medians/quartiles Summary of arguments for changing the forecasts

41. 41 Round 4 Panelists are asked to consider the reasons offered for changing the estimates and make new forecasts for each event. May be asked to justify position Moderator again computes medians and quartiles (and summarizes comments if necessary). Looking for “stability”

42. 42 Outcome Events/trends Dates - usually use the median date in the fourth round Understanding of factors panelists believe are important and may affect the forecast.

43. 43 Delphi vs. Committees Structured process for discussion and disagreement Panel members may or may not shift Can do so without “losing face” Delphi generally results in a convergence of the panel estimates. this is less frequently an outcome of an unstructured committee

44. 44 Variations on Delphi Providing an initial list of events Beginning with a context Number of rounds Multiple dates Computerized Partial Anonymity

45. 45 Important issues Group process Efficient Precision Selection of panel members Survey/questionnaire design

46. 46 Success factors Selection of experts Pay them? Contact them personally Explain the method Easy survey High response rate

47. 47 Nominal Group Technique (NGT) Developed by Delbecq and Van de Ven in the early 1970s Useful to define the dimensions of a decision Based on research that indicates that small groups that do not interact are the most creative idea generators, while groups that do interact perform the best evaluation. Incorporates evaluation as well as idea generation.

48. 48 Output Rich list of ideas. Preliminary rating of those the group feels are most important.

49. 49 Steps in NGT Silent Generation Round Robin Discuss/Clarify Vote/Rank Discussion

50. 50 Silent Generation Task statement 5-10 minutes (or until people run out of ideas….) Imperative to obtain individual responses.

51. 51 Round Robin List responses on flip charts or board. Each respondent offers one idea from their list and the facilitator moves on. The ideas should be numbered as they are listed.

52. 52 Discuss/Clarify Go through the list one by one. Make sure all participants understand each idea.

53. 53 Vote/Rank Depending on how many ideas are on the list, give each participant a set number of index cards. Rule of thumb is 15-25% (If you have 28 ideas, give them 7 cards) Instructions From the list of ideas, pick your top x and write one idea on each card. Put the idea number in the top left corner.

54. 54 Rank Spread your cards out in front of you. From this list, which is your top choice? Give this a 7 – write a 7 in the top right hand corner of your card. Turn this card over. From the cards that are remaining, which is your least favorite. Give this a 1 – write a 1 in the top right hand corner of your card. Turn this card over.

55. 55 Rank (cont’d) Continue with this process – until there are no more cards left. Everyone should have 7 cards with ideas, idea numbers, and ranking numbers.

56. 56 Record votes This is a good time for a break! Collect cards; List votes by each idea. Tally Record using a/b where a = Number of people who voted for an idea; b = Sum of votes.

57. 57 Interpretation You can order the ideas according to the numerator or the denominator. Usually 1-2 ideas dominate. Provides powerful information about the subject of interest. Consensus? Divergence? Strong opinions?

58. 58 Technology Forecasting Surveillance Techniques

59. 59 Surveillance Techniques Surveillance techniques are primarily observational. The are based on the assumption that by understanding the innovation process and closely observing trends, influences, and events, we can accurately forecast technological changes.

60. 60 Surveillance Premises These techniques are founded on two fundamental premises: 1. Technological innovations follow a common development pattern 2. The length of time required to complete the pattern is normally quite long.

61. 61 Stages of Innovation Innovation Model Scientific finding Laboratory feasibility Operating prototype Commercial introduction Widespread adoption Diffusion to other areas Social and economic impact

62. 62 Getting Started with Surveillance A prerequisite to good surveillance is access to suitable data and mechanisms for information retrieval. Initiating a surveillance effort is normally easy. Integration with other forecasting tools and techniques is critical.

63. 63 Three Primary Techniques There are three primary Surveillance Techniques. They differ primarily in their degree of focus and intensity of effort. Scanning Monitoring Tracking

64. 64 Scanning Scanning is a broadly oriented activity that seeks to identify developments that may materially affect the organization. Scanning seeks to observe as wide a spectrum as possible. Scanning is unfocused not looking for something in particular are looking for anomalies of interest

65. 65 Anomalies of Interest Changes in technical performance Changes in personnel and facilities Funding announcements Paper and meeting topics Technical demonstrations Patent awards New partnerships

66. 66 Monitoring Monitoring is a more focused and disciplined than Scanning. It begins when an anomaly spotted in scanning may be of significant interest. Monitoring is primarily focused on developments outside the company University research National laboratories Competitors

67. 67 Typical Monitoring Questions What is the present and potential significance of this anomaly? What is its current state of development? At what pace do we expect progress? What organizations are involved? What funding (and other) support are being provided and by whom?

68. 68 Formal Monitoring System Selecting areas to be monitored Link to Scanning Assigning monitoring responsibility Setting action triggers Setting actions in response to trigger Periodic review of the monitoring program and related databases Feedback on the Monitoring System

69. 69 Monitoring Outcomes Monitoring may lead to the need for a more quantitative Technology Forecast using trend and curve techniques or some of the others we will cover subsequently Monitoring may also lead to the most focused of the Surveillance Techniques, Tracking

70. 70 Tracking Tracking is the most carefully focused and detailed Surveillance Technique. Near-term product/process introductions that will change market dynamics Major technical break-through Information reporting and review procedures must be streamlined and responsive

71. 71 Tracking Implementation Tracking is normally assigned to a task force which has been specifically tasked to follow developments. Tracking is normally a time and resource intensive activity. If interest subsides, tracking may fall back to monitoring.

72. 72 Technology Forecasting Forecasting using Scenarios

73. 73 Scenarios Scenarios are outlines of some aspect of the world Scenarios incorporate and emphasize aspects of the world that are important to the forecast. Scenarios frequently integrate several specific forecasts into a more global forecast.

74. 74 Scenarios Scenarios may incorporate uncertainty through a range of outcomes or through multiple specific outcomes. Most-likely, optimistic, pessimistic Science fiction writers provide a wealth of examples of technology forecasts using scenarios

75. 75 Scenario Types Future History dynamic paths through time that focus on the evolution of events in a particular part of the world Snapshot a cross-sectional view of a particular part of the world a single point in time Orwell’s 1984

76. 76 How Are Scenarios Used? Scenarios provide intellectual stimulation for imagining the range of possible futures The use of scenarios is common in business and government planning processes strategic, tactical, operational

77. 77 The Power of Scenarios Scenarios are an integrative technique. They allow us to bring together information from diverse sources and of different character into a unified, and hopefully, coherent picture of the future. Broad features of a situation are usually expressed clearly - details may be vague.

78. 78 Procedure for Scenario Forecasting General procedure for facilitating scenario forecasting Identify topic & factors of interest Identify users and style of presentation Specify time frame Specify societal & technical assumptions Select key factors & relationships Decide on number & emphasis of scenarios

79. 79 Scenario Construction Actual construction of the scenario is usually based on a template. The template is based on the key factors and relationships. The finished scenario may take the form of a technical report, a short story, a bullet list, a movie, ….

80. 80 Critiquing Scenarios Scenarios should be evaluated on two criteria: utility and validity. Utility: do the scenarios provided information useful to the user group? Validity: is the scenario logical based on the quality, quantity, and consistency of information used to build it?

81. 81 Scenarios: Conclusion Scenario forecasting may be the oldest of all technology forecasting techniques. It can involve significant expenditures of time and effort. It has been useful in many venues. Science fiction writers to business strategists

82. 82 End of Lecture