The process of applied technology forecasting : A study of executive analysis, anticipation, and planning

The objective of this research is a study of technology forecasting not only as a discipline but also as an executive responsibility by applying the information processing theory to this task. A protocol analysis from Ericsson and Simon, modified for this study, was used for the analysis of interview data of top executives from the magnetic resonance imaging industry and their superconducting magnet suppliers, when they had to face a specific technological event. The technological event is the breakthrough discovery of ceramic superconducting materials in 1986, and the fast technological progress that followed between 1987 and 1989. This paper illustrates the processes through which senior executives collect information, process it, and develop plans and predictions in the context of “hard” uncertainty. We use cognitive and strategic decision-making research to develop a normative typology of executive decision making in similar contexts.     

Technological forecasting and assessment: Science and/or mythology?

A number of radically distinct models (inquiry systems) are described. The models derive from C, West Churchman's recent characterization of the history of Western epistemology. It is argued that only a few of these models are appropriate for technological forecasting problems. Most technological forecasting methodologies rest on a dubious philosophical foundation. They unreflectively assume that the inquiry systems which are appropriate for “well-structured” problems are also appropriate for “ill structured” problems. It is argued that technological forecasting is an inherently ill-structured problem and therefore requires a methodology which is uniquely suited to such problems. The Dialectical and Singerian Inquiring Systems are proposed as particularly appropriate for ill-structured problems.     

On determining the future impacts of research and development solutions

The concept of a “forecasting graph” is used to develop answers to questions concerning the achievement of scientific and technological developments, the required time, estimates of manpower, equipment, and finacial resources for alternative pathways.     

A model of “coupled” technology transfer : A logistic curve approach

This article presents a mathematical model relating to the technology transfer problem. The origin of the problem stems from the existing trade-offs between the strategies of “technological progressiveness” and “static efficiency” employed by firms or countries defined as “leaders” and “followers,” respectively. The formulation of the model is based on the assumption that the technological development of a firm or a country follows a logistic growth curve when related to a specific technology. During the process of a “coupled” technology transfer, the development of the follower changes and its behavior is described by a first order nonhomogenous deferential equation. Different scenarios of the “coupled” technology transfer between the leader and the follower are being discussed.     

Can Japan succeed in “Chigyo-ka” (intelprise-formation)?

There are two aspects in today's information revolution that started in the late 1970s. The first is an aspect referred to as “the third industrial revolution,” which triggers the transition to the “21st century system of Industrialization.” The information revolution in this sense brings the creation of new “breakthrough industries (new multimedia industries).” And the second aspect of the information revolution possesses the characteristics of both a technological revolution and a social revolution and brings about the arrival of the third phase of the historical evolutionary process of the modern civilization, which proceeds through three phases, namely “militarization, industrialization, and then informatization.”If the bearers of modern industrialization are a “group of enterprises” that have been engaged in the race in order to gain “wealth” (generalized means of exchange/exploitation power), and if these enterprises' activities have been exercised in the world market where their products have been sold, then it is appropriate to call the bearers of informatization a “group of intelprises.” They will be engaged in the race to gain “wisdom” (generalized means of persuasion/induction power), then stages of their activities can be called a “global intelplace” where “sharables,” that is, information and knowledge, will be disseminated. And now, toward the 21st century, the third phase of modernization, which can be called the “informatization/intelprise formation” or the “wisdom game” (intellectualism), is about to begin.Japan's “ie society (a society based on the ie principle—literally, it means “house” but here it is interpreted as cultural principle for organizing a society), which has been going through the process of evolution on the Japan Archipelago, has developed a network-based organization with little stratification within its infrastructure. In this sense, Japanese society can be characterized as a “network-oriented society” in which intelprises and an intelplace in the broad sense have functioned as the essential components of the society since Middle Ages. In general, an intelplace and intelprises that operate actively within this framework serve as the flexible bases for different types of social relations and institutions, such as states and markets and eventually integrate these into the society to a certain extent. In fact, it took place quite regularly during the modernization “in the narrow sense,” or Westernization of Japanese society after the Meiji Restoration. There exist some problems, however. Some of the characteristics found in Japanese society may become obstacles to activities aimed at the sharing and promotion of information and knowledge in the global intelplace and Japanese participation in the “wisdom game.” Badly needed are serious efforts for Japanese intelprise-formation to reduce these obstacles as much as possible.     

Toward an analytical industry classification

Two kinds of difficulties retard progress in technological forecasting uncertainties inherent in the subject itself and imprecision in its concepts. The latter difficulty exists whenever words have to be used in a general or traditional sense due to the lack of an agreed-upon operational definition. One such word and concept is industry [1]. The object of this paper is to present an operational definition of “industry” for use in forecasting, R&D, or innovative contexts, and to show how predictive, rather than just analogue, statements can then be made about industry and industries.     

Critical Success Factors for Business Reengineering and Corporate Performance: The Case of Korean Corporations

This article briefly reviews the literature on business reengineering (BR), analyzes critical success factors (CSFs) for BR, develops a BR-CSFs model, empirically tests the model on Korean firms, and investigates the impact of BR on corporate performance in Korea. Many Korean firms are attempting to transform from Japanese- to American-style business management. As part of this process, BR has gained substantial critical mass as the first widely accepted American-born management methodology accepted in Korea. While Western-based BR methodologies provide general procedures and techniques the CSFs listed in this research focus on the key factors that Korean firms generally confront. In the present research, 20 CSFs, taken from a literature review were divided into four categories: strategic, organizational, methodological, and technological/educational. A survey was developed to assess the firm-specific importance and development of each of these CSFs. Survey responses from 162 Korean corporations indicate a positive association between the designated CSFs and corporate performance. Korean BR team leaders and CEOs/COOS rate “strategic” and “methodological” CSFs as most important while “organizational” and “technological/educational” CSFs are considered less important, a rank ordering challenged by the authors.     

Bayesian updates using precursor events

It is common practice among technological forecasters to use precursor events to anticipate technological change. However, the information obtained from precursor events is usually qualitative in nature. A previous paper demonstrated that information about prior “similar” innovations can be used to generate a probability distribution of lag times between a precursor event and the event to be forecast, thus making the forecasts more quantitative. This paper presents a method for using Bayes' Equation to update probability distributions of lag time using the occurrence of additional precursor events.     

Technological generalizations and leitbilder—the anticipation of technological opportunities

Recent national technology foresight studies as well as the Millennium Project of the American Council for the United Nations University are very much based on “nodes of discussion.” These short statements are called, e.g., topics, issues, or developments. This article provides a framework for the classification and analysis of nodes related to future technological development. Key concepts of the article are “technological generalization” and “leitbild.” The topics in the technology foresight Delphi studies can be seen as different kinds of generalizations from already realized technological developments. Leitbild is a German word. Its most general meaning is a guiding image. Like a common vision, a leitbild creates a shared overall goal, offers orientation toward one long-term overall goal, and provides a basis for different professions and disciplines to work in the same direction. The analysis of leitbilder and emerging technological paradigms might contribute to the construction of topics and issues and to the argumentation processes related to them.     

On Forecasting Discontinuities

Too much has been written about forecasting trends via “envelope curves.” To plot a straight line on log-paper is a no-brainer. The special phenomenology of phase changes, catastrophes, or “crashes,” and their key evolutionary role is the subject of this article. There is no unique way of forecasting such events, but one indicator is an apparent inconsistency between two or more extrapolations with each other. Alternatively, a catastrophe may be signalled when a trend extrapolation encounters a natural limit. A number of possible discontinuity scenarios are sketched, although overall, the article laments the lack of theorization in forecasting disconuities.     

Imitation processes with small mutations

This note characterizes the impact of adding rare stochastic mutations to an “imitation dynamic,” meaning a process with the properties that absent strategies remain absent, and non-homogeneous states are transient. The resulting system will spend almost all of its time at the absorbing states of the no-mutation process. The work of Freidlin and Wentzell [Random Perturbations of Dynamical Systems, Springer, New York, 1984] and its extensions provide a general algorithm for calculating the limit distribution, but this algorithm can be complicated to apply. This note provides a simpler and more intuitive algorithm. Loosely speaking, in a process with K strategies, it is sufficient to find the invariant distribution of a K×K Markov matrix on the K homogeneous states, where the probability of a transit from “all play i” to “all play j” is the probability of a transition from the state “all agents but 1 play i, 1 plays j” to the state “all play j”.     

Multiple method forecasts for discontinuous innovations

This paper argues for the development of more explicit forecasting methodologies that use the pragmatics of combining methods and the philosophical base of multiple perspectives. The increasingly common “wicked” problem of forecasting demand for discontinuous innovations (DI) at the concept testing stage of new product development is used to ground the discussion. We look to the interpretivist group-based inquiry methodologies in the management and information systems literature, and coupled this with discussions with forecasting managers, to provide evidence to support the adoption of this approach. Relativism is briefly critiqued and the accuracy of the combining methods forecasting literature reviewed. It appears that the managers interviewed could benefit from an explicit understanding of the multiple perspective approach, as they already appeared to have appreciated the need for a broader based approach than traditional forecasting techniques. It is therefore hoped that as a result of this paper, more managers involved with the “wicked” problem of innovative product forecasting will recognise the need to adopt a more explicit multiple perspective inquiry methodology in their efforts to combine forecasting methods.     

Using precursors as leading indicators of technological change

Technological forecasters frequently utilize the procedure of “monitoring for precursors” in an attempt to anticipate technological changes. In a recent study on patterns of innovation, it was found that the data provided examples of precursors which could be used to illustrate the monitoring technique. In addition, it proved possible to extend the monitoring technique through the generation of probability distributions. The examples, and the extension, are reported here.     

The research strategy in management of technological innovation

The increasing importance of technology in the application world has imposed high demand on the research community for insightful and useful principles about “management of technological innovation” (MTI). This paper examines the academic legacy in terms of conceptual categories, causal relationships and taxonomy of relevant systems, and asserts from a system perspective that MTI as an applied science is still in its infancy.Based on methodological argument, this paper warns of the danger of hasty compromise of strategically important topics to “popular” definition of “researchability,” and suggests several research guidelines and approaches for this young interdisciplinary discipline:

1. (1)To explore new frontiers, use “proximate variables,” consider contextual factors and causation in broad terms, conceptualize “independently,” and pay more attention to case study method.

2. (2)To understand driving forces, be aware of practice, and focus on internal dynamics.

3. (3)To transcend complexity, adopt a hierarchical structure perspective and state-and-flow concept, and condense findings into configurations.

Finally, this paper urges the formation of an overall research strategy to accelerate the accumulation of MTI grounded knowledge.     

Knightian uncertainty and poverty trap in a model of economic growth

This paper explores how Knightian uncertainty affects dynamic properties in an economic growth model. The decision-making theory employed in the analysis is the theory of expected utility under a non-additive probability measure, i.e., the Choquet expected utility model of preference. We apply this decision-making theory to an overlapping generations model where producers face “uncertainty” in their technologies. When the producer is averse to uncertainty, the firm's profit function may not be differentiable. Therefore, the firm's decision to invest and hire labor becomes rigid for a certain measurable range of real interest rates. In dynamic equilibrium, the existence of firm-level rigidity causes discontinuity in the wage function; this makes multiple equilibria the more likely outcomes under the log utility and Cobb–Douglas production functions. In this paper, we show that even if aversion to uncertainty is small, the “poverty trap” can arise for a wide range of parameter values.     

Do misalignments predict aggregated stock-market volatility?

This paper considers forecasting regressions of “realized volatility” on a misalignment measure. Results show that this misalignment measure is useful to predict in and out-of-sample stock-market volatility at monthly horizons. The analysis also suggests a threshold effect.     

Government funding strategy in technology programs

Industrial R&D in a market economy is mainly implemented in the private sector, therefore public funding is a very important tool of government to guide private R&D activities. This paper investigates the experience of funding national programs in a number of industrialized countries, and reaches some preliminary conclusions: (a) To reduce opportunistic behavior and ingrain intrinsic incentive in firms, both competition and cost-sharing principles should be used concurrently in underwriting firms' R&D projects. (b) Competition principles can be applied across many candidate projects around the same time or a series of one-of-a-kind projects over a longer time horizon. (c) The major threat to application of competition principles is that there is no “real competition” due to few qualified candidates in specific technological fields or in some, especially small, countries. (d) In practice, the appropriate cost-sharing level is difficult to determine. Fifty-fifty is used as a rule of thumb in many countries to simplify the decision making and circumvent “bounded rationality.” (e) Full cost endorsement may be another “quantum” alternative for projects urged by government but not felt to be very relevant by firms.     

Forecasting money demand with Jorgenson's Lag and Tobin's q

The poor forecasting record of time-series money-demand equations is generally attributable to shifts in public behavior, to the omission of important arguments, and to the inadequate specification of the functional form of the relationship. This paper explores the latter two problems by deriving the demand function from Tobin's model of asset markets, by incorporating Tobin's “q” as an argument, and by basing the adjustment process on Jorgenson's rational distributed-lag model. These modifications produce reasonably stable equations that forecast well throughout the 1970s.     

In search of a useful measure of technological innovation (to make economists happy without) discontenting technologists)

This article presents an exploration of the methology and measurement of technological innovation. It is based upon already available surveys and especially upon the SPRU data bank of innovations in Britain. The methodology proposed could be applied to the joint CNR-ISTAT survey being carried out on innovation diffusion in the Italian manufacturing industry. It is suggested that the empirical investigations already available or in progress should be exploited in order to develop a satisfactory theory of technological innovation. The article is also a contribution to the OECD move debate in order to reach aninternational standardization of methodologies and classifications of innovative activity.The author introduces a distinction between the objects and the subjects of technological change, and on this basis he makes a comparison between the two approaches, which emphasize alternatively “evolutionary” or “revolutionary” characteristics of technological change. It is argued that many of the present-day controversies arise from misunderstandings between those working in this field on the concepts and measurement methods employed. As a consequence, the debate has been continuing on different and noncomparable topics.It is argued that a standarization and a more accurate methodological precision on measuring technological innovation could have the salutory effect of removing the suspicion of heresy, which has so far kept the economics of technological change out of thoroughbred economic theory.It would be absolutely superflous to state the nature and number of the advantages of an instrument so excellent for the observation on both land and sea. But, leaving aside earthly considerations, I turned to heavenly speculation; and clearly saw the moon as near as though but two earthly radii distant. After this, to my spirit's incredible delight, I many times observed both the fixed and wandering stars. Since I saw they were very thick, I began to study a way to measure thier distance, which I finally found. On this point it is well that all those wishing to devote themselves to similar observations should be forewarned. In the first place, it is necessary to prepare a most accurate telescope, which represents the objects clearly and distinctly, not covered by any haze, […] in fact, if the instruments is not so, one will try in vain to see all the things I saw in the heavens.