Technological Forecasting

By Dr. A K Saini

We know that Future will be different from present.

Forecasting is predicting what the future is going to be. For example:

Future forecasts, sales forecast, manpower forecasts, weather forecast,
etc.

It is an essential element of any planning process e.g. personal life,

public systems, etc. This is also true for technology as well.

Technological Forecast – It is a prediction of the future characteristics

of useful machines, products, processes, procedures or techniques. For
example: Smart Clothing to adapt to various temp conditions, Camera
phones, mobile computing/telephony, blue tooth technology, Nano
technology, GIS based cars. Teleporting, etc.

Two points that emerge from this are:

a) A technological forecast deals with certain characteristics such as –

- levels of technical performance – e.g. technical specs

including energy efficiency, emission levels, speed,
power, safety, temp, etc.
- rate of technological advances e.g. paperless office,
plastic goods, picture phones, new materials, etc.
In all these, the how part of the technology is silent. i.e. Here the
forecaster need not state, how these characteristics are/will be
achieved.

The forecast may also even predict characteristics, which are

beyond the present means or capabilities. However the forecast
may suggest how these limitations will be overcome.
b) Technological forecasting also deals with useful machines,
procedures or techniques. This excludes from the domain of
 technological forecasting those items intended for pleasure or
amusement since they depend more on personal fads or tastes
rather than on technological capabilities.

Technological Change and Forecast – India’s position

Technological change is an important management function. This helps

in planning for new products and businesses. The manager must also
avoid being technologically blindfolded by competitors with
technologically superior products. I.e. he cannot be indifferent or
ignorant or mute spectator about technologies.

Technological progress cannot be anticipated but it can be planned.

Technological forecasting tries to put as much planning as is possible
into the technological change i.e. reducing the element of uncertainty or
surprise change.

Incremental innovation has often been planned or atleast sought after.

The anticipation or seeking of technological innovation has been called

“technology forecasting”.

Technology forecasting is not widely practiced in India as it is used

elsewhere especially in Industrially developed market economies. This is
because commercial success in such economies is largely dependent on
the ability of a firm or an organization to identify emerging/future
technologies well ahead of time so that appropriate decisions or advance
actions could be taken to deal with the likely changes/challenges of the
future.

Realizing the need and importance of Forecasting in the technology

planning process, the Govt. of India has established a Technology
Information Forecasting and Assessment Council (TIFAC) under the
Ministry of Science & technology to promote action oriented studies &
forecasting in selected areas.
Stages in technology Innovation chain

Generally the following stages of progress of an innovation throughout

its life i.e. beginning to end are used.

1. Basic Scientific Findings/Discovery of a principle

2. Laboratory or bench level feasibility
3. Operating Prototype/pilot plant
4. Commercial Introduction or operational use
5. Widespread adoption
6. Diffusion to other areas
7. Social and Economic Impact

The forecaster must state clearly the stage for which he is forecasting.
For example when he makes use of historical data on a number of
devices, he must be clear about the stage of innovation represented by
each of his data points. Mixing of data representing several stages will
lead to errors and confusion.

Although innovation is a continuous process, breaking or subdividing it

into various stages is done for the convenience of the forecaster. Point to
focus is that stages chosen on the continuum of progress must be capable
of unambiguous definition, so that there is no mixing up of data and no
questions as to whether a innovation has reached a certain stage or not.

Necessity of a Technological Forecast

Historically US Navy was one of the first major institution that started
formal technological forecasting to support the reparation of a 15
year plan to identify the likely opportunities and threats. Today
Technology forecasting is important due to its importance/role in
driving the economy.
Essentially technological 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

Elements of a Forecast

The elements of a forecast that can be specified and/or estimated are:

a) Time period
b) Nature of technology
c) Characteristics to be exhibited by the technology
d) The probability associated with the characteristics

For all the elements, the degree of precision may vary anywhere
between the two end points of generality and precision.

Role of Technology Forecasting in Technology management

The forecast serves as an input to the process of making plans and

decisions. The role of the forecast in planning (Martino) is :

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 the possibilities, which might be achieved if desired.
e) It provides 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.
f) It furnishes warning signals, which can alert the decision maker
that it will not be possible to continue present activities.

So the purpose of forecast is to improve the quality of decisions of the

decision maker and not to force him to accept a particular decision.

Forecasting Approaches

There are two basic approaches to forecasting:

1. Exploratory forecasting – It transcends into the future from the past

performance or experience. It’s techniques deals with the analysis of
technological capability, features etc. of the past, evaluation of the
present, looking forward to the future taking into account the dynamic
progression which brought us to today’s position.

2. Normative Forecasting – It begins from the future and works out

desired landmarks backwards to the present state i.e. the mind is
projected into the future by postulating a desired or possible state of
technological development to satisfy a specific need. The forecaster then
works backwards to identify the steps or landmarks necessary to be
achieved with assessed level of probability in order to reach the end
point or goal set henceforth.

The above two classifications are not competitive with each other nor do
they substitute each other. But they are complimentary to each other and
have to be used together. Usually one doesn’t attempt to prepare an
exploratory forecast of some technology unless there is a normative
forecast that the specific technology will be needed. Similarly no one
will generally prepare a normative forecast without some preliminary
idea that whether in the past, the objectives were met from the
technology or not.
Methods of Forecasting

Forecast

Exploratory Normative

Intuitive Extrapolation Growth Curves Technology Relevance

Morphological Mission
Monitoring Tree Analysis Flow
Diagram

Opinion Polls
Brainstorming Linear Pearl’s Curve
Panels Exponential Gompertz Curve
Scenario Development
Delphi
Individual forecasting

1. BRAINSTORMING

• It is one of the oldest method.

• It is conducted by a group of people who attempt to forecast about
a specific technology by collecting/contributing all the ideas
spontaneously.
• The new ideas emerge from all participants and even from those
having no technical knowledge or experience as well.
• Useful as ideas generated are not evaluated

Major objective of this method is to stimulate the generation of ideas on

a given technology. These may be wild highly impractical or exotic etc.
Ideas are formed /offered spontaneously in a relatively unstructured
environment. After they have been presented, they are analysed and
evaluation is carried out in depth.

Steps:

1. Identification of a person as a group leader – not necessarily

chosen by age, position, seniority or expertise in technology but
must have requisite experience of integrating or channeling the
ideas to lead to a solution.
2. Identification of the problem by a group so that the multiple
dimension of the problem involved are highlighted.
3. Definition and Redefinition of the problem so that it is
unambiguously understood by the group. Possible solutions are
deliberately avoided.
4. Idea generation process is initiated. Once a number of ideas are
collected, a number of triggering questions are initiated to help
combine ideas or approaches.
5. The recorded ideas are reviewed, classified and streamlined into
related ideas and clusters.
6. Rearranged ideas are evaluated, possibily through Reverse Brain
storming i.e. through a series of eliminating questions. Least
favoured ideas are rejected. Preferred ones are analysed and
forecasts are prepared in consultation with other functional experts.

The structure of the problem-solving group is a major factor for the

goodness of the forecast. The group generally should have 5-10
members. A group to be effective has to have a variety of people such
as:

• Users of technology,
• Experts, knowledgable in technology
• Economists/financial analysts
 • Dreamers with new ideas
• Persuadors who can help acceptance of an idea
• Technology forecasters
• Consultants
So brainstorming is basically first establishing a method for obtaining a
variety of emergent ideas and then converging it on to the given
solution.
Advantages: Easy to organize, & resources needed are modest.

Disadvantages: Require experienced person to conduct it. Large number

of sessions required, Adequate preparation is required and Sufficient
time is needed.

Method used for:

a) It has wide applications in R&D, technological and business problem

solving.
b) For obtaining new ideas of products/services/processes/[procedures
c) for identifying new users or market segments
d) for overcoming bottlenecks
e) for identifying alternative options or methods.

2. DELPHI METHOD: SUBJECTIVE OR INTUTITIVE

METHOD I.E. EXPERT OPINION

A forecaster should be objective in forecasting and must ensure its

repeatability. But this type of methods is desirable in situations:

a) when there is no historical data, especially in which new

technologies are involved, expert opinion is the only possible
source for forecast.
b) When impact of external factors is more important than the
factors that governed the previous development of the
 technology. Under such situations, forecast using past data is
irrelevant.
c) When ethical consideration rather tha technical and economic
considerations govern the development of a technology.

Under such conditions, committee approach is resorted to.

Adv: a) Sum total of information available to a group is atleast equal to

that available to any one individual.
b) Committee can bring interactive aspects, which a single member
cannot contribute.

Disadvantages: a) Minority views are normally neglected e.g. if group is

of diverse disciplines.

b) In a group, the tendency is to agree with the majority even if

individuals feel that the majority is wrong.

d) A group has its own internal dynamics. Group members may

have vested interest in certain outcomes and this may affect
the results.

To overcome these deficiencies, a method known as Delphi has been

developed.

Delphi is a programmed, sequential questionnaire approach. In this a

group of learned persons make a forecast. I.e. Instead of an individual a
group makes/prepares a forecast but with certin characterstics:

a) Annonymity
b) Iteration with controlled feedback
c) Statistical group response taking care of minority view.

Steps:
 1. Identify the specific area or field in which Delphi exercise is
to be carried out.
2. Identify a set of users, technology generator/experts,
equipment manufacturer, development bankers & social
scientists who can help in preparing a set of questions for
forecasting technological developments in the given area
3. A Small core group is formed to prepare the questionnaire
with the help of 2 above to cover the various aspects of the
technological development such as: feasibility, time frame,
resources needed for commercial use and impact.
4. Administer the questionnaire to a number of participants to
cover a wide cross section of interests
5. First round response of questionnaire is obtained and
processed. Wherein all minority and even extreme views are
included.
6. The second round of questionnaire , containing the processed
responses of the first round questionnaire is sent back to the
participants to give their revised comments.
7. Second round results are then processed to get consensus
results

So Delphi provides a consensus view based on opinion of large number

of participants and so combines/integrate the forecasts.

Advanatges: Useful for a) Obtaining forecasts when a limited historical

data is available b) for fields which are highly interactive and
interdisciplinary, involving diverse parameter such as social, technical,
economic, political and managerial

Disadvantages: a) It does not have any logic underlying each prediction

and if repeated may not give reproducible results.
b) The reliability is not very high
Careful preparation of questions is required and this should include:
Unambiguous questions, unconditional questions, probability for
occurrence of an event should be clearly explained, etc.

3. EXTRAPOLATION METHOD : Curve-Fitting Method

It is simplest and most commonly used forecasting technique. It is

Objective method and is therefore reproducible.

It makes use of historical data on selected technological parameters for

projecting future trends. It implies that historical trends are a result of a
number of factors/forces which will continue to behave as in the past
unless there are strong reasons to the contrary.

This could be based on:

• Linear or straight line trend on past attributes

• Exponential Trend on past attributes

Linear trend is represented by

Yi = axi + b
Where y= value of parameter estimated in the ith period
xi= value of the ith year/period and a, b are constants to be estimated.

A and b are estimated by the method of sum of squares & minimizing

them from the projected trend extrapolation.

Exponential trend could be shown like Yi = abxi

It may be noted that some of the trends will not follow either straight
line pattern or exponential patterns to describe the trend and its
direction. In such cases, a parabolic trend or polynomial trend is applied.
Steps: 1. Selecting an appropriate parameter to describe the attribute of
interest to the forecaster e.g. sale volume, market share, cost, etc. This is
the most crucial part.

2. Collecting past data of this parameter for a reasonable period.

3. Plotting the data graphically to determine whether the trend is straight

line or exponential that describes the trend.
4. Fitting the appropriate curve using mathematical equation to project
events in near future.

Applications: Useful for predicting future characteristics of a

technology, production level of an item. Useful for technological and
non-technological parameters.

Advantages : 1)Objective technique and does not use any intuition for its
application.
2) Method is traceable/learnable, renewable and reproducible by others
3) Simple to use & Quick to interpret

Disadvantages: 1) Can be used only if adequate data is available

2) Based on assumption that there is no change in the underlying causes

or past factor behavior.

4. TECHNOLOGY MONITORING – BREAKTHROUGHS

Forecasts based on trend or growth curves assume that there is a fairly

good continuity between past and the future i.e. the behavior will be
same or somewhat dependent on past performance. So these methods
are inherently incapable of predicting breakthroughs.

Technology monitoring is a technique, which can be used for monitoring

breakthroughs through pre-cursor events. In this system, monitoring of
signals of technological change is performed, followed by analysis of the
meaning of signals of change.

Most large manufacturing & trading organizations abroad have formed

systems for continuously scanning the technological environment known
as: Technology Scanning/Monitoring/Intelligence, etc.

A forecaster has to be aware of the diverse events as they occur that

have a bearing on the technological area, determine their possible
significance, ensure they are not forgotten with passage of time and
relate them to future event as they occur and assess their combined
significance. In large organizations where several technological fields
are to be monitored, scanning has to be carried out by a team consisting
of people from various disciplines.

Steps:

1. Information Scanning – Regular access to relevant information

from various resources such as journals, newspapers, patents,
competitor’s R&D plans, commercial data services, Internet, govt.
policies, incentives, manpower skill development, social attitudes,
preferences, prejudices, etc.
2. Screening the scanned information - All information may not be
relevant or useful so only relevant information of short-term or
long-term objectives need to be identified.
3. Evaluation of the screened information & development of Ideas –
Detailed scrutiny of several information in-house or in conjunction
with external experts to trigger newer activities in the organization
like R&D, Diversification, etc.
4. Utilization of the evaluated ideas for R&D planning, project
formulation, product diversification, etc. – To pursue or not

Advantages: 1) efficient early warning device on threats to existing

products and services
2) May provide signals on opportunities for new products and services
3) Useful for senior level management and decisions makers.

Disadvantages: 1) very cumbersome and requires a team to scan/monitor

the environment 2) expensive and require substantial resources.

5. GROWTH CURVES

Comes from growth pattern of many biological systems that follow ‘S’
shape curve. Initially the growth is slow, then growth rate increases and
finally levels off into the natural limit e.g. Fruits, vegetables, population
f yeast cells etc. show an S shaped growth pattern.
Scientists have found a striking similarity between growth of biological
systems and technological performance in some areas. So forecasters for
technological forecasting have used the biological growth curves.

Raymond Pearl (American Biologist) – Pearl’s curve

Rate of growth
parameter

----Time -

The curve is symmetrical at inflexion point.

Initial slow rate is due to resistance to the use of new technology and
upper flattening is due to opportunity limit.

Gompertz curve – Given by Mathematician Benjamin Gompertz is

frequently used in technological forecasting. This curve is not symmetric
at inflexion point as was the Pearl’s curve.

Rate of growth

parameter

Time---

Used to predict state of technology for which there is a limit and when
growth in the intial stages is comparatively faster than that of the Pearl’s
curve.

Advantages: Can be used for when system is bound by a limit be it

natural or otherwise. When one has historical data, one has to decide
which growth curve is suitable or appropriate to use. Pearl and
Gompertz curve have different applications. In case of diffusion of new
technology, initially there are few suppliers, few after sales support
facilities and few users, so Pearl’s curve is more suitable. For old
technologies Gompertz curve is easier to use as growth is faster due to
already existing base for the same.

5. RELEVANCE TREE – Normative method

Described by C.W. Churchman in 1957.

Objective (Forecasted technology) to be achieved is divided into a set of

major activities. Each activity is broken down further into missions and
each mission is subdivided into tasks till we reach the current status in a
hierarchical manner or tree form with various levels of achievement. The
major advantages is that objective to be achieved and the action to be
taken gets linked together thereby helpful in planning. i.e Top down
approach to forecasting.

So it serves as a tool for forecasting as well as Planning process.

Objective

Activity1 Activity2 Activity3

Task1 Task2 Task3

System1 System2

Deficiency1 Deficiency2

Project1 (Action1) Project2 (Action2)

In this all the relevant activities that are required to be

carried out/achieved for achievement of objective or forecast
are identified and listed in a hierarchical manner. It also gives
insight of what problems or hurdles are going to be faced in
achieving the objective.

6. MORPHOLOGICAL ANALYSIS:
Developed by Fritz Zwicky. It involves a systematic evaluation of all
possible combination of solutions to individual parts of a whole system.
In essence it is same as relevance tree except that it is not hierarchical in
nature but morphological model presents a parallel structure of the
problem.

Any problem could be modeled either by relevance tree or by

morphological structure and the forecaster could choose the appropriate
model depending on the problem in hand.

This model can be used to identify requirements for individual

technologies of a specific system. This is a static model and not suitable
for systems that change with time or describe the logical sequence of
events.