© 2000 John Petroff
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© 2000 John Petroff |
As mentioned earlier, technological forecasting is both important and very difficult. Technological forecasting refers to the process of predicting what new products or processes will be introduced and when. For a company, the introduction of a superior product by a competitor may spell obsolescence of its own product and end of the company. For an investor, identifying products that will succeed in the market is naturally the key to a profitable investment strategy. Making correct predictions for most financial analysts is beyond their field of expertise because they usually do not have the scientific knowledge related to products. But, for scientists, prediction is just as hard because they cannot know what consumers will like.
To illustrate the work involved, let us take the electric car.
Such a car would clearly be highly desirable, and has been promised
as an improvement over current gasoline consuming equivalents
ever since the car was first produced in the beginning of this
century. There were then indeed some battery driven cars that
proved not to be sufficiently efficient. To conduct technological
forecasting it is necessary to gather first all the technological
information available about the given product. For the electric
car, one would take each of the electric cars that have been in
the past, or are currently produced, and all the proposed new
designs:
1- batteries only recharged externally (i.e. at home or at special
station),
2- batteries charged by fuel cells with liquid hydrogen stored
in car,
3- batteries charged by fuel cells with hydrogen produced from
methane stored in car,
4- batteries charged by fuel cells with hydrogen in carbon retaining
tank in car,
5- combination of regular gasoline engine and batteries recharged
externally,
6- solar panels and batteries.
Next the technological advantages
and shortcomings of each alternative have to be listed in a comparative
manner. Here is a first draft of major drawbacks for each of six
electric car configurations listed above:
1- batteries only has drawback of heavy weight and slow recharge,
2- hydrogen in car is dangerous and fuel cells are still very
expensive,
3- methane is less dangerous but the tank has to be bigger and
same high cost fuel cell,
4- carbon retaining hydrogen tank and fuel cell both are expensive,
but less dangerous,
5- mixed gas/electric combination still has emissions and slow
recharging of batteries,
6- solar panels are only effective in open terrain with much sun.
The second phase of the inquiry is to identify consumers' expectations
and preferences, in terms of what benefits are derived from each
device, and whether consumers will be willing to pay for such
benefits. For the electric car this can be
- price that is considered affordable,
- minimum distance that can be traveled without stopping,
- minimum speed,
- maximum weight and size of the vehicle.
One could also include concerns about the environment and quality
of life, fear of potentially explosive fuels that may have to
be carried, and legislative imperatives. An example of the importance
of paying attention to consumer concerns in technological forecast
is illustrated by the increasing resistance of European consumers
to all genetically modified agricultural products.
The third step is to reach a thorough understanding of the reasons why past and current electric cars have not succeeded in the market. This understanding leads to a knowledge of major obstacles or challenges the industry faces. For the electric car that may be high price of some of the components and short distance traveled. The last phase is to obtain expert opinion on how long it will take for technicians to overcome shortcomings. For this, one can go back to the initial list of alternatives, and determine which of the versions will have the best chance to meet consumers preferences.
This is clearly a very difficult process, and one that gives predictions that will certainly be affected by new developments. History is full of unfulfilled dreams and strategies. Witness the emergence of internet in which most of its original creators did not participate in subsequent commercial ventures, and consequently, did not get rich, with only very few exceptions, such as Anderseen who started Netscape (as reported in an article on "Internet" in The Economist of December 23, 1999). There are a few cases where predictions of what technology will be used in the future are much more accurate. These cases are outlined next.
See review questions Q-14F.1 through Q-14F.4.
See research assignment R-14F.1.
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