Technology Forecasting

1
Technology Forecasting

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

2
Introduction

• What is Technology?
• The Evolution of Technology
• Technology Forecasting
• Technology Forecasting Taxonomies
• Objectives of Technology Forecasting
• The Need for Experts

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.
• Websters 7th Collegiate Dictionary defines
  technology as the totality of the means employed
  to provide objects necessary for human
  subsistence and comfort.

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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.

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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Technology Forecasting Taxonomies

• Porter, et al. suggest
• Direct
• directly forecast parameters of the technology
• Correlative
• forecast growth or change by forecasting elements
  in the technologys context
• Structural
• formally consider interactions between the
  technology and its context

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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

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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

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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

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Objectives for Technology Forecasting

• Assistance in the Management of Technical
  Research and Development
• Forecasting the technology emergence process can
  facilitate allocation of RD resources
• Evaluation of the Present Value of Technology
  Under Development
• Forecasting the commercial value of a technology
  in the development process

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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

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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.

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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

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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

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How to obtain expert opinion?

• Committees
• Advantages
• Synergy
• Total is greater than the sum of the parts

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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

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How to counteract this?

• Structured group processes
• Delphi Process
• Nominal Group Technique

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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

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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.

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Three characteristics

• Anonymity
• Iteration with controlled feedback
• Statistical group response

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Anonymity

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

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Iteration

• Interaction is conducted through responses to
  questionnaires
• Moderator extracts pertinent information

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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

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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

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Round 2

• Consolidated list of events
• Asked to estimate time of occurrence
• Moderator prepares statistical summary

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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.

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Round 3 (contd)

• 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.

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Round 4

• Questionnaire consists of
• Lists of events
• Medians/quartiles
• Summary of arguments for changing the forecasts

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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

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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.

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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

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Variations on Delphi

• Providing an initial list of events
• Beginning with a context
• Number of rounds
• Multiple dates
• Computerized
• Partial Anonymity

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Important issues

• Group process
• Efficient
• Precision
• Selection of panel members
• Survey/questionnaire design

46
Success factors

• Selection of experts
• Pay them?
• Contact them personally
• Explain the method
• Easy survey
• High response rate

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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.

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Output

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

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Steps in NGT

• Silent Generation
• Round Robin
• Discuss/Clarify
• Vote/Rank
• Discussion

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Silent Generation

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

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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.

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Discuss/Clarify

• Go through the list one by one.
• Make sure all participants understand each idea.

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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.

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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.

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Rank (contd)

• Continue with this process until there are no
  more cards left.
• Everyone should have 7 cards with ideas, idea
  numbers, and ranking numbers.

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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.

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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?

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• Technology Forecasting
• Surveillance Techniques

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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.

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Surveillance Premises

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

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Stages of Innovation

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

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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.

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Three Primary Techniques

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

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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

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Anomalies of Interest

• Changes in technical performance
• Changes in personnel and facilities
• Funding announcements
• Paper and meeting topics
• Technical demonstrations
• Patent awards
• New partnerships

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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

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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?

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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

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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

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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

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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.

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Technology ForecastingForecasting using Scenarios
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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.

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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

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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
• Orwells 1984

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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

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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.

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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

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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, .

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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?

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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

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End of Lecture