Looking forward to getting it right

Hindsight is a wonderful thing, particularly for supporters of Manchester City, Jonathan Aitken or the Royal Opera House: “If only I knew then what I know now…” But it isn’t half as wonderful as its more enigmatic sister, foresight.

Foresight is much more useful than hindsight, but is way beyond most mortals. For most people, trying to predict the future induces only angst. “If only I knew now what I’ll know in ten years,” sounds a bit pathetic, the prelude to a trip to see Madame Zena Fortune Teller at the end of the pier.

Foresight is, indeed, a rare gift. So rare, in fact, that companies spend billions of dollars trying to learn it. IBM has a far from distinguished record in anticipating consumer trends, but probably its finest moment of foreshortened foresight came just after World War II, when it commissioned a survey into future global demand for computers.

The researchers went away, examined the facts, thought about the way the world was heading and reported back that the ceiling on computer sales would probably end up at around 15. This, they reckoned, was the total number of governments and multinationals that would be able to afford them. Or would have a room large enough to put them in.

We can laugh now – with hindsight – but IBM was making the kind of mistake we all do when looking ahead, the error many businesses still make: that of simply extrapolating from recent history or extending the past.

According to today’s futurologists, the state of the art is far more sophisticated than that. Major corporations take futurology extremely seriously. But does all this mean they already know what products we’ll be buying in 2012, or are they just gazing into a very expensive crystal ball? What is futurology and does it have a future?

It was the oil crisis in the mid-Seventies that threw a spanner in the works of what had been quite reliable, but linear techniques of extrapolative forecasting. The exponential economic growth in the West that these models had predicted was exposed as a mirage. Other factors, such as the implications of information technology, the environmental movement and social upheavals, muddied the waters further.

Multinationals that were committing large slices of their income to research and development needed to have some idea of what might happen. The oil companies led the way and it was Shell that pioneered a new method of scenario planning: the mapping of alternative futures by taking account of the directions that major driving forces might take.

According to futurologists such as Graham May, who in 1996 set up Britain’s first masters degree course in Foresight and Futures Studies, this was a turning point. “In scenario planning, you look at the alternatives; you don’t actually predict anything. You know that if you predict a linear future it will be way off-beam. The point is, if you accept uncertainties, you accept the different routes events might follow,” says May.

“The word ‘forecast’ has been dropped from the futurologist’s vocabulary because it is too definitive, but also because consumers of information place too much store in them.

“You will find a lot of economic modelling and population modelling that is quasi-scientific – they collect lots of data and bung it through a computer, they come up with answers, and they actually believe them! As with any prediction, the data they are predicting is invented data – it totally depends on the model, the assumptions and everything else. You change the assumptions and you will end up with a vastly different answer,” says May.

“A lot of the modellers know this. But very often the consumers don’t. They look at this apparent certainty about the future and say, ‘Whoopee, now we know what the future is going to be’. But, if you look back at history, the prediction is just the last thing that the future is likely to be like.

“The other thing is that, if you look at forecasts, they are often not made just to predict the future; they are sometimes made for propaganda purposes. The classics are the missile gap that the American military claimed the Soviet Union had over it, and the energy situation in the UK, when the Government wanted to build nuclear power stations because it said we were running out of fuel. What was it doing 15 years later? Closing down all the coal mines because it didn’t need them anymore.” he concludes.

So what businesses do now is find ways of dealing with uncertainty: all they do know for certain is that they don’t know what the future holds.

Siemens and Daimler-Benz are Europe’s top two spenders on research and development. They both have teams working full-time on generating scenarios of the future behaviour of their customers. They do this by fusing research on socio-cultural trends and the latest technological advances. The role of Siemens’ FutureScape team is not just to identify long-term trends that offer opportunities, but also to “challenge executive management’s view of conventional business strategy”.

They identify driving forces by digging down underneath observable changes in society, politics, technology, art and so on, and ask “Why?” repeatedly until common sense tells them when to stop.

The “megatrends” they identify are each the observable result of several driving forces. The outsourcing of non-core activities, for example, is a megatrend resulting from increased complexity in business, shorter time-to-market and improved communications.

Then megatrends are combined to create scenarios which inspire product ideas. Siemens even anticipates “discontinuities” – the oil crisis was a major one, Bill Clinton’s misdemeanours were more minor – by asking what would happen to a megatrend if one of its driving forces was drastically altered.

Daimler-Benz’s Society and Technology group in Berlin and Palo Alto fuse futurism and lifestyle research to produce “trend scenarios” by beginning at the level of future changes in the social, political and economic environment.

They then look at the impacts on various consumer groups – for example, how each group might respond to more pressure on their time. The final step is to create visions of each group and the products and services they might need to organise their time better.

Modern communications make it easier for futurologists to collaborate. To remain credible, they have learnt to share information about diverse, potentially influential factors. Philips got the views of a large international panel of experts before publishing the results of its extensive Vision of the Future project. The company’s multidisciplinary Vision of the Future team generated a “technological roadmap” on the way to conceiving designs for “what people will perceive as useful, desirable and beneficial in the future”, focusing on four domains: personal; domestic; public and work; and mobile. The experts’ views on the squidgy-looking gadgets were mixed.

BT is – probably – the only British company employing a full-time futurologist, Ian Pearson. The timeframe BT is most interested in is 10-15 years hence, so Pearson has to look at the shorter term as well as beyond the company’s horizon.

His projections for 2010 include the replacement by software of most industries with “agent” in the title, and robots that look like kittens. Even despite the knowledge-sharing and advanced methods, he is prepared to admit that futurology is little more than educated guesswork.

“Ultimately, the aim is to produce a vision of the future which seems reasonable and consistent. Sometimes there are many paths and alternative scenarios that can be highlighted. In some cases, we won’t know which way it goes until we get there,” says Pearson. “However, there is some compensation for working permanently in fog. I will have retired before most of my mistakes become apparent, and will have had lots of fun along the way.”

In the case of the future, no knowledge may be the least dangerous thing. All hell tends to break loose when people begin to think they know what is around the corner.

The Aztecs thought they knew. They predicted the arrival on the shores of Mexico of a dark bearded man in green tights, and a few years later Hernán Cortés turned up to wipe them out. Before going, they let it drop that world would come to a sharp end in 2012.

Was it just propaganda, or did they know something we don’t?