A Checklist for Evaluating Forecasts
Hines, Andy, The Futurist
We need forecasts in order to discover new possibilities and avoid potential disasters. But not all forecasts are created equal. A professional futurist shows you what to look for in a forecast.
You are sitting at home with a newspaper, reading a forecast, and wondering what to make of it. Is it credible? Should you pay attention to it?
The purpose of this article is to help you become a better consumer of forecasts. It suggests a simple, handy checklist of criteria that you can refer to in order to know whether, or how seriously, to take a forecast. The approaching millennium will likely open the floodgates for a great many forecasts, so a checklist will help arm you for this onslaught.
This checklist can be used as a handy guide to refer to when reading a forecast, or it can be modified to suit your specific needs. In business planning, you may be looking at forecasts in order to come up with new product ideas. For example, a forecast of fuel cells as the next major transportation power source may suggest new business opportunities to your automotive or plastics company.
If you are in government, you may emphasize the implications of such a forecast. Should your agency continue spending millions of dollars on new battery technology? If you are reading forecasts for your own intellectual purposes, you may pay closer attention to trigger events in order to know what to look for as the technology develops.
The checklist can also help you rethink a forecast that seems outrageous at first glance. Rather than dismissing it out of hand, you subject it to the checklist criteria. If it does not meet them, you might file the forecast away as amusing but reckless. On the other hand, you might consider scenarios under which it could happen, as a way to test your thinking. Suppose, for instance, that one forecast says Africa will have the highest GDP per capita in the next century based on a breakthrough in genetics; could you devise a plausible scenario?
The Author: Credentials, Reputation, Bias
Always consider the source of a forecast. A strong indicator of a forecaster's reliability or credibility comes from who gives it. Some forecasters merit immediate attention. In telecommunications, anything written by James Martin at IBM or Robert Lucky at AT&T has instant credibility. Some journals, such as the futures publication Technological Forecasting and Social Change or the mainstream Scientific American, exercise strong editorial review. Forecasts appearing in journals like these are generally sound.
Japanese science and technology forecasting is solid. Most Japanese forecasts are normative; that is, they are targets or goals toward which government and industry should work. Many of their forecasts read like, "We will have a fiber optic network by 2015." Such forecasts will probably be used by government and industry as goals.
Another thing to consider is whether the author or institution involved has an agenda. Some forecasters are enthusiasts or advocates. Nanotechnology, which has a legitimate long-term potential, does not exist except in the minds of a few pioneers or visionaries. When looking at forecasts of nanotechnology, keep in mind that it has not produced anything yet, though there have been articles, books, and conferences on the topic. The authors' interest may be financial, but more often it is intellectual - they hope to see their prediction proved correct.
On the other hand, the fact that forecasters have a particular bias or are advocates does not necessarily disqualify them from doing a good forecast. What you have to look at is whether they are being up front about it. If the forecaster comes right out and says something like, "We have been working on this technology for a long time and we believe the market is now ripe," you know it might be too optimistic. The real difficulty you face is when a bias or advocacy is hidden. The best course in this case, if you have the time and means, is to investigate the author or institution. …