The Continuity of Anthropologically Based Forecasting Methodology
The anthropological model utilizes the concepts of human culture and integrates the parts to parlay a holistic matrix of interrelationships.
Multiple techniques and methodologies exist to forecast the consumer driven economic and market revenues, all of which are in one form
or the other, culture driven. Some of the techniques and methodologies employed by the Corporate Anthropology Center in conducting its
consumer/market forecasts are described below. The descriptions explain the rationale on which each technology is based, discuss the
ways in which each technology is most commonly used, and indicate whether results are typically quantitative or qualitative in nature. The
techniques are categorized by the five different ways people view the future:
Extrapolation
Pattern Analysis
Goal Achievement
Wide Randomization
Intuition
Each approach has its advantages and shortcomings; however, our experience has been that more valid forecasts result from synthesis of
the methods rather than reliance on any one. Thus, in our consumer/marketing forecasting projects we normally use at least one technique
from each group, conducted within the parameters of the anthropological model.
Extrapolation techniques base prognosis on the concept that the future will represent a logical extension of the past. Large scale,
inexorable forces will drive the future in a continuous, reasonably predictable manner, and one can, therefore, best forecast the future
by identifying past trends and extrapolating them in a reasoned, logical manner.
-Technology Trend Analysis is based on the observation that advances in technologies tend to follow an exponential improvement process.
The technique uses early improvement data to establish the rate of progress and extrapolates that rate to project the level of progress
at various times in the future. Results produced by this technique are typically highly quantitative. In practice, this technique is typically
used to forecast developments such as the speed of operation, level of performance, cost reduction, improved quality, and operating
efficiency.
-Fisher-Pry Analysis is a mathematical technique used to project the rate of market adoption of technically superior new technologies and,
when appropriate, to project the loss of market share by old technologies. The technique is based on the fact that the adoption of such
new technologies normally follows a pattern known by mathematicians as the "Logistic Curve." This adoption pattern is defined by two
parameters. One of these parameters determines the time at which adoption begins, and the other determines the rate at which adoption
will occur. These parameters can be determined from early adoption data, and the resulting pattern can be used to project the time at
which market takeover will reach any given level. Results produced by this technique are highly quantitative. The technique is used to make
forecasts such as how the installed base of telecommunications equipment will change over time, how rapidly a new chemical production
process will be adopted, and the rate at which digital measuring devices will replace analog devices in petroleum refineries, etc.
- Gompertz Analysis is very similar in concept to Fisher-Pry Analysis, except that it better models adoptions that are driven by the
technical superiority of the new technology. However, customers do not suffer any significant penalty for not adopting the new technology
at any given time. Like Fisher-Pry analysis, Gompertz analysis projects adoption by use of a two parameter mathematical model. In similar
manner, early adoption is used to determine these parameters and the resulting adoption curve. Results are highly quantitative, and the
technique is often used to project adoption of consumer products such as high-definition television, camcorders, new automobile features,
etc.
-Growth Limit Analysis utilizes a mathematical formulation known as the Pearl Curve to project the pattern in which maturing technologies
will approach development limits. This can often be useful to organizations in analyzing maturing technologies, in setting feasible research
goals, and in determining the utility of additional development spending. The technique can also be useful in determining if new technical
approaches can be used to overcome apparent technical limits.
-Learning Curve techniques are based on the fact that, as more and more items of a given type are produced, the price of production
tends to decrease at a predictable rate. For example, each doubling of the total number of a particular items produced might result in a
cost reduction of 15%. In some cases, key technical parameters may improve in a similar pattern. The learning curve phenomenon is
reflected as a straight line on log-log graph paper, which makes projection relatively simple. Results from the use of this are highly
quantitative. The technique can be used for setting price and technical performance targets for developing technologies, particularly in
the middle stages of their development.
Pattern Analysis is based upon the precept that the future will reflect a replication of past events. Powerful feedback mechanisms in our
society, together with basic human drives, will cause future trends and events to occur in identifiable cycles and predictable patterns.
Thus, one can best address the future by identifying and analyzing analogous situations from the past and relating them to probable
futures.
-Analogy Analysis is based on the observation that the patterns of technical development and market capture for new technologies are
often similar to those for like technologies in the past. In applying this technique, forecasters identify appropriate analogies and analyze
similarities and differences. Normally, it is desirable to identify more than one applicable example in order to minimize the probability of
selecting false or inappropriate analogies. The results from application of this technique are typically semi-quantitative in nature, and are
often presented as a range of possibilities rather than a single projection.
-Precursor Trend Analysis takes advantage of the fact that, often, the development of one technology lags by a constant period the
development of another related one. For example, the first application of technical advances in passenger cars typically occurs
approximately four years after their application in racing cars. Similarly, the application of new technologies in commercial products tends
to follow laboratory demonstration by a relatively constant period. One can, thus, project the status of the lag technology at some future
date by observing the status of the lead technology today. This technique also allows the extension of lag technology forecasts by building
on forecasts of lead technologies. Results from using this technique are highly quantitative.
-Morphological Matrices provide a formal method for uncovering new product and process possibilities. In applying this technique, users
first determine the essential functions of the product or process. Next, they list the different means by which each of these functions
could be satisfied. Finally, they use the matrix to identify new, reasonable combinations of these means that could result in practical new
products or processes. Results of the application of this technique are qualitative in nature. The technique can be used to identify
non-obvious new opportunities for a company. This technique can also be used to identify products and processes that competitors might
be developing or considering.
-Feedback Models provide a means for accounting for the interactions that will connect technical, economic, market, societal and economic
factors as the future unfolds. In using this technique computer models are developed that mathematically specify the relationships
between each of the relevant factors. For example, advances in technology may result in improved products that may result in increased
sales that may provide more funds for further advance in technology. The results of this technique are highly quantitative, but are often
used to examine qualitative consequences of trends, events, or decisions. The technique is most commonly used in the formulation of high
level strategies or policy.
Goal Achievement stresses that the beliefs and actions of various individuals, organizations, and institutions will determine the future. The
future, therefore, is susceptible to modification and change by these entities. Thus, the future can best be projected by examining the
stated and implied goals of various decision-makers and trend setters, by evaluating the extent to which each can affect future trends
and events, and by evaluating what the long-term results of their actions will be.
-Impact Analysis provides a simple, formal method for taking into account the fact that, in a complex society such as ours, trends, events,
and decisions often have consequences that are neither intended nor foreseen. The technique combines the use of left brain and right
brain thinking to project the secondary, tertiary, and higher order impacts and implications of such occurrences. Results are qualitative in
nature, and the technique is often used to analyze potential consequences of projected technical advances or to determine areas in which
forecasting efforts could best be directed.
-Content Analysis is founded on the concept that the relative importance of social, political, commercial and economic issues are reflected
by the amount of media attention the issue receives. Thus, by measuring, over time, changes in such factors as column-inches in
newspapers, time allocated on television, and, more recently, number of items on the Internet, forecasters can project the direction,
nature, and rate of change. In the technical arena, this technique can, to some degree, be used to project advances in new technologies, as
well as growing market attraction. The results of use of this technique are often displayed in a quantitative format. However, they are
typically used only for qualitative analysis.
-Stakeholders' Analysis is a formal method for taking account of the influence that various individuals and institutions can have on the way
the future develops. It explicitly identifies those people and organizations, internal and external, that have a "stake" in particular
decisions, projects, or programs; analyzes the importance that each individual or group assign to these issues; and the relative influence
that they may have on developments. The results from this technique are normally semi-quantitative. The technique is often used to test
the validity of forecasts that might be impacted by unexpected opposition or support.
-Patent Analysis is based on the presumption that increased interest in new technologies, together with conviction of their practicality and
appeal, will be reflected in increased R&D activity, and that this, in turn, will be reflected by increased patent activity. Thus, it is
presumed that one can both identify new technology opportunities and assess the state of development of given technologies by analyzing
the pattern of patent application in appropriate fields. Results from the application are often presented in quantified terms; however,
their use in decision-making is normally based on a qualitative evaluation.
Wide Randomization seeks to form a gestalt from a series of events and actions that are essentially unpredictable and, to a large extent,
random. Therefore, one can best deal with the future by identifying a wide range of possible trends and events, by carefully monitoring
developments in the technical and social environments, and by maintaining a high degree of flexibility in the planning process.
-Scanning, Monitoring, and Tracking techniques are founded on the observation that, for most new technologies, a finite, often
considerable, amount of time is required to bridge the gap between conception and commercialization. Thus, if one is alert, he or she can
discern changes in technology, market, and other business factors in time to take maximum advantage of these changes. All three
techniques are employed to identify and evaluate developments that might materially impact the organization's operations and strategies.
Although the three techniques are similar in many respects, they differ in purpose, methodology, and degree of focus.
Scanning seeks to identify any trend or event that might impact the organization and is, therefore, by design, essentially unfocused.
Monitoring is designed to follow general trends in specified areas and is, thus, more focused than scanning.
Tracking is designed to carefully follow developments in a limited area and is, consequently, highly focused. Results from each of these
techniques can vary between highly quantitative to basically qualitative. However, in general terms, results are less quantitative in scanning
activities and more quantitative in tracking activities.
-The Alternate Scenarios technique provides a structured method for integrating a number of individual forecasts into a series of
comprehensive, feasible narratives about how the future might develop. It provides a vehicle for combining many forecasts in a format
that allows decision-makers to effectively relate the implications of the combination of all forecasts. The results from this technique can
range from highly quantitative to purely qualitative depending on the objectives of the effort, its organization, and purposes to which it
will be put. This technique is typically used to assist executives in critical decision-making. Although a single scenario can be used for
making decisions, the use of a series of alternate scenarios allows executives to take account of the fact that the future can never be
projected with certainty, and to determine how appropriate flexibility can be built into plans.
-Monte Carlo Models are computer models that take explicit account of the fact that all projections of future trends and events are,
fundamentally, probabilistic in nature. In this technique, all of the steps involved in the development of a new technology are identified,
and their inter-relationships specified in a mathematical model. Numerical values are assigned to the probability of each event occurring in
various different ways and to the length of time it will take each event to occur. The model is then run a large number of times to
determine the probability of various overall outcomes. The results of the technique are highly quantitative, and the technique can be used
to project technology development times and patterns, to allocate resources, and to track the development of emerging technologies.
Intuition Methodology utilizes the theory that the future will be shaped by a complex mixture of inexorable trends, random events, and
the actions of key individuals and institutions. Because of this complexity, there is no rational technique that can be used to forecast the
future. Thus, the best method for projecting future trends and events is to gather as much information as possible and, then, to depend
on subconscious information processing in the brain and personal intuition to provide useful insights.
-The Delphi Survey technique is a method for taking advantage of the talent, experience, and knowledge of a number of experts in a
structured manner that allows an exchange of divergent views without direct confrontation. The technique involves initial projections,
usually in quantitative terms, of future events. After the initial projections are correlated, participants are asked to explain, anonymously,
their differences in a series of follow-up rounds. Results are normally semi-quantitative, and the technique can be used to project future
technical, market, and other developments, to uncover fundamental differences of opinion, and to identify non-conventional ideas and
concepts.
-Nominal Group Conferencing is a formal technique for structuring the input from a number of subject matter experts. The technique is
similar in some ways to "brain storming", but its structure requires all participants to take active part in the process. It also requires
participants to use their brains in a series of different ways, i.e., to individually generate new ideas, to silently assess the ideas of others,
to jointly examine the implications of new ideas with others, and to formally evaluate a series of options. The results of employment of this
technique are typically semi-quantitative. Nominal Group Conferencing is often used to project future developments, to uncover new
business opportunities, or to identify new solutions to old problems.
-Structured and Freeform Interviews are methods for gathering and correlating the thoughts and opinions of a collection of experts
about how the future will unfold. Structured interviews are similar to traditional opinion polls in that the people conducting the interviews
know ahead of time the information they are seeking and structure the interview to get this information as efficiently as possible. The use
of personal interviews rather than written surveys promotes participation, decreases the probability of misinterpretation, and assists in
assessing the qualification of participants. Results are typically quantitative in nature and can be used to project such items as potential
market size, rate of technical advance, and general business factors.
Freeform interviews, on the other hand, are used when the subject area to be addressed is less well defined. The interviewer begins
each session with only a limited concept of how the interview will be structured. In large measure, each question is based on the answer to
the previous question. The interview is essentially free form, and the results can be either qualitative or semi-quantitative. This technique
is particularly valuable in identifying key issues, clarifying general concepts, identifying additional experts, and formulating future
structured interviews and surveys.
-Technology Advantage Management is a technique designed to integrate technology, market, and competitive factors in order to gain
fullest advantage from advances in technology. New technologies are examined in light of each of these factors using a two-dimensional,
nine element format called the Technology Advantage Matrix (TAM Map). The use of this "map" allows concurrent analysis of each of
these factors in terms of business opportunities, organization goals and objectives, and existing and desired programs, resources, and
culture. Results range from qualitative to highly quantitative depending on objectives, project organization, and nature of use. The
technique is typically used to define strategies, to optimize resource allocation, and to guide cultural change.
