Change and discontinuity: Forecasting for the 1980s

This outline of forecasting takes a very broad view—covering many of the diverse approaches now available—so that attention can be paid to the role of forecasting in discovering and analysing alternatives, as well as to its established role in prediction. The philosophy of forecasting and the differing methodological approaches are discussed, highlighting particularly the problem of continuity and discontinuity in change, and the concepts of the cultural barrier and the paradigm shift. The author, applying the idea of discontinuity in social change (the paradigm shift), examines some possibilities for the 1980s. He argues that in the field of social forecasting, which is now becoming an important element in all other types of forecasting, the forecaster's capability to foresee broad changes in values is crucial, since such changes will themselves lead to further developments throughout society. Forecasting is now reaching the stage where its methods and philosophy allow us to assess potential hazards, and to preset, rather than react, to them.     

Social forecasting: From impressions to investigation

Acknowledgement of the insights that have already been gained from survey research and other methods common in social science has been a major omission of social forecasters. The author suggests that experts involved in futures research should broaden their horizons and regard social changes not necessarily as the result of technological ones, but quite often as the cause. Examples of recent survey research are chosen to illustrate some ways in which socio-psychological data can be utilised in forecasting studies.     

Technical change: The prospects for manufacturing industry

Technical change will cause problems in the OECD area in all three sectors of manufacturing industry : consumer, intermediate, and capital goods. The author describes the factors influencing this process : the changes in demand, resource costs, competition, and technology. He discusses the growth and employment prospects for various sectors. It is a mistake to assume that the service sector will be able to absorb either the number or the type of workers displaced: structural unemployment poses a serious threat. Those countries able to adapt well to technical change are identified.     

Understanding social change: Some comments on “Prediction and social change”

Gordon Rattray Taylor argued, in the October 1977 issue of Futures,² that forecasting needs a fuller understanding of social change, and of the factors which influence it. In this response, Willis Harman discusses Taylor's view of the importance of individual and personal values in the process of change, and comments upon his analysis of those values.     

Post-industrial Canada: An econometric modelling approach

This study brings together the predominantly qualitative approach of social forecasting—as manifested by Daniel Bell's concept of the post-industrial society—and the quantitative analysis of econometric forecasting. The econometric model used here is the candide model of the Canadian national economy. The author seeks to verify the compatibility of some hypotheses of the post-industrial concept by using candide to develop a post-industrial scenario; in doing so, he obtains quantitative estimates of many critical features of the concept within the framework of a structured and reasonably consistent model.     

Scenario development for corporate planning

The term “scenario” is familiar to those involved in forecasting, but too few people are aware of what exactly a scenario is, or how it can best be developed and applied. The author describes a method developed over several years in response to a need which most forecasting efforts have left unfulfilled. The method enables quantitative and qualitative forecasts to be combined in a manner which can be directly related to an organisation's planning and decision-making processes, and which permits the evaluation of a company's objectives and performance in the light of those forecasts. The analysis of an organisation's likely performance in given scenarios can, in turn, provide a basis for contingency planning.     

The idea of reproduction

The concept of social reproduction which helps to identify elements and relations decisive for a transition from one social formation to another is presented here as a contribution to the methodology of social forecasting. The theoretical schema is constructed and tested in a retrospective forecasting exercise. The same methods are then applied to qualify the elements of change in contemporary society.     

The sociologist as social architect: A new task for macro-sociology?

The theme of voluntarism and determinism is revisited, here in the context of forecasting for futurists. Although fraught with danger the use of scenarios is vital in a world of rapid change, in which people are more than ever aware of the choices open to them and the ways they are able to determine their own future. The author proposes that a merger between the approaches of the sociologist and the futurist could aid our understanding of social futures. The outcome is a ‘design sociology’ based on six key concepts.     

Understanding rural change—demography as a key to the future

The last decades have seen a rapidly growing interest in foresight methodology. Methods have been developed in corporate and governmental communication exercises often labelled technology foresight. In reality, these foresights have often drifted into processes of social change, since technological change is hard to foresee beyond what is already in the pipe-line. Forecasting of social change, however, must be based on solid knowledge about the mechanisms of continuity and change. Virtually nothing can be said about the future without relating to the past; foresights and futures studies are about revealing the hidden pulse of history. Hence, the answer to forecasting the future is empirical research within the social sciences.Demographic change has been recognised as a key determinant for explaining social change. Population changes are fairly predictable and the age transition can explain a wide range of socio-economic changes. For rural futures, demographic change is a key issue, since age structure in rural areas is often uneven and also unstable due to migration patterns. A number of policy related questions as well as research challenges are raised as a consequence.     

Domestic and international violence : A forecasting approach

This article is directed at the need for the development of forecasting techniques for non-environmental issues, especially political and military concerns. It describes a major research project in this area completed by Dr Weil and his colleagues at Consolidated Analysis Centers, Inc. The article defines the concepts and operational measures forecast, describes the development of a regression-based forecasting model and simulation experiments performed on that model, and presents selected long-range forecasts of significant political, economic, military, and social variables for the European region.     

Forecasting technology : Luck and judgement in the chemical industry

The author describes the use of technological forecasting for investment decision making, the five types of forecast generated —process improvement, engineering innovation, new effect product, new process, and new bulk product—and their attendant problems and risks. He illustrates these with recent examples from the chemical industry and outlines the areas where future development will—or should—probably take place.     

UK brokers' characteristics: does size matter?

This study provides one of the first insights into how UK brokers' institutional characteristics may impact on the forecasting performance of their financial analysts. The study focuses on brokerage house size and finds it to be a significant factor explaining cross sectional variation in forecasting performance. This is consistent with evidence from several recent US studies (Jacob et al. 1997; Clement, 1999). It is likely that this broker-size effect reflects the resources (human, IT) available to brokers' analysts to support them in their activities. It may also reflect larger brokers' superior access to company managers and information. However, this broker-size effect appears to be significant only for forecasts made at horizons of one year or less. The sign of the earnings change being predicted also has a significant impact: for observations where earnings changes are negative, the broker-size effect is larger than for positive changes, though the effect is significant for both cases. In addition, the form of the model employed here suggests diminishing marginal returns to broker size. More generally, this study reiterates the importance of controlling for the most commonly cited explanatory variables for forecast accuracy, and there is evidence that the heavy industry sectors may be more difficult to forecast, echoing the conclusions of UK studies from the 1980s.     

Recent value changes in Western Europe

This article analyses value changes in Western Europe in relation to changes in social institutions. Important institutional changes have been that families have become have become smaller and more fragile and the labour market has become larger and more heterogeneous, especially because of the increase in the number of married women having paid jobs. Finally, globalization has resulted in a double trend of heterogenization and localism. These changes have influenced the values of the population in Western Europe. The overall change is an increase in individualization and a more fragmented value system which means, eg, that there are no clear political cleavages. The value changes can be summarized in three processes: from industrial to green values; from authoritarian values to libertarian values; and from church-oriented to personal religious values. These trends suggest that we are approaching a society with a diversity of lifestyles where many value structures are competing.     

Demography as a forecasting tool

The European population is rapidly ageing. This implies changing economic and social relations between the generations. In turn this precipitates economic change. In particular the welfare bill in the future needs to be paid for more dependants by a smaller working population. This fundamental shift also changes the conditions for productivity growth, trade and even monetary policy. Using demographic projections to forecast these changes and integrate them into futures scenarios contributes to realism in the futures envisioned. Demographic processes can be influenced by policy, but the feedback is slow. This ensures the usefulness of demographic forecasting but it also implies that policy decisions need to be taken well in advance of the problems that ageing will cause. At horizons beyond 10–20 years there are ample opportunity to adapt the society to avoid unacceptable scenarios. Before that the scope for action is much less and much more constrained. The inertia of the demographic structure is such that it is hard and probably costly to turn unwanted trends caused by unbalanced age structures. For example, a likely consequence of the developing scarcity of labour in Europe is that the demand for education goes down in spite of the desirability for society to expand higher education.     

Analysts' Forecasts Following Forced CEO Changes

This paper examines analysts' earnings forecasts during the period of uncertainty following a change of chief executive officer (CEO). It distinguishes between forced and non‐forced CEO changes, and examines whether analysts utilize their information advantage to reduce the heightened uncertainty of a forced change of CEO. Examining a sample of Australian companies followed by analysts between 1999 and 2009, we find that forecasting accuracy is lower and earnings forecasts are more optimistic for firms experiencing forced CEO turnover compared to firms not undergoing such a change. However, dispersion is not statistically different. The results suggest that forced CEO turnover events provide a challenge to the forecasting environment for analysts. During CEO changes, investors should be aware that forecasts are less accurate and have an optimistic bias.     

Equity market information,bank holding company risk,and market discipline

For market discipline to be effective, market factors such as changes in firm equity and debt values and returns, must influence firm decision making. In banking, this can occur directly via bank management or indirectly though supervisory examinations and oversight influencing bank management. In this study, we investigate whether equity market variables can provide timely information and add value to accounting models that predict changes in bank holding company (BOPEC) risk ratings over the 1988–2000 period. Using a variety of equity market indicators, the findings suggest that one-quarter lagged market data adds forecast value to lagged financial statement data and prior supervisory information in the logistic regressions. Furthermore, using extensive out-of-sample testing for the years 2001–2003, we find: (1) that multiple models estimated over different phases of the business and banking cycles are superior to a single model for forecasting BOPEC rating changes; (2) that equity data adds economically significant power in forecasting BOPEC rating upgrades and performs well for identifying no changes; (3) that for downgrades, the accounting model forecasts the best; (4) that modeling the three possible risk ratings categories simultaneously (downgrade, no change and upgrade) minimizes both Type I and Type II classification errors; and (5) that using multiple models to forecast risk ratings enhances the overall percentage of correct classifications.     

The role of perceived costs and perceived benefits in the relationship between personality and risk‐related choices

This paper considers how perceptions of costs and benefits can influence the association between personality and risky choice behaviour. We assessed perceptions and behaviours in six domains (ethical; investment; gambling; health and safety; recreational; social) using the DOSPERT and measured personality using the NEO PI‐R. Results from structural equation modelling showed that personality had a direct effect on risky choice behaviour in four domains (social, ethical, gambling and recreational risk‐taking). In addition, perceived costs and benefits mediated the relations between personality and risk‐taking in the five domains (social, ethical, gambling, recreational and investment risk‐taking). Evidence for a mechanism that integrates both direct and indirect effects of personality on behaviour is discussed.     

我国社会保障支出与金融结构变迁关系的实证研究

本文利用中国1992-2011年间的时间序列和协整分析方法,实证考察了我国社会保障支出对金融结构变迁的影响效果。结果显示社会保障支出显著地影响金融结构的变迁,不断增加的社会保障支出能够显著地提升股票、债券、保险等非货币资产在金融机构总资产中的占比;社会保障支出是引起股票资产占比、债券资产占比、保险资产占比的格兰杰原因,反之,股票资产占比、债券资产占比、保险资产占比不是引起社会保障支出变动的格兰杰原因。     

The economics of decline: A neglected scenario

The author identifies a shortcoming common to the recent forecasts of the UK economy and to the earlier “limits to growth” literature which criticised economic growth as the mainstay of policy. In fact, there is no “law” of economic growth, no inherent momentum carrying the economy progressively upwards; indeed development may become undevelopment, and the post-industrial society may come to resemble pre-industrial society. The author briefly describes the symptoms and causes of degenerative economic decline and gives examples of countries where the process is underway. Thus a new forecasting is required in the UK: one that will include the analysis of decline as well as of growth.     

Reflections on social forecasting

Social forecasting in its present state is inadequate to deal with the enormous changes taking place in human societies. New concepts of space and time are evolving, and the development of data processing has provided techniques highly suited to technological forecasting. What is also needed for social forecasting, however, is an attitude towards the future which is open-minded, takes account of man in his entirety and stresses that he can play a creative part in decision making by determining the kind of future he wants.