Abstract
Although high degrees of reliability have been found for many types of forecasts purportedly due to the existence of accountability, public forecasts of technology are rarely assessed and continue to have a poor reputation. This paper’s analysis of forecasts made by MIT’s Technology Review provides a rare assessment and thus a means to encourage accountability. It first shows that few of the predicted “breakthrough technologies” currently have large markets. Only four have sales greater than $10 billion while eight technologies not predicted by Technology Review have sales greater than $10 billion including three with greater than $100 billion and one other with greater than $50 billion. Second, possible reasons for these poor forecasts are then discussed including an over emphasis on the science-based process of technology change, sometimes called the linear model of innovation. Third, this paper describes a different model of technology change, one that is widely used by private companies and that explains the emergence of those technologies that have greater than $10 billion in sales. Fourth, technology change and forecasts are discussed in terms of cognitive biases and mental models.
Highlights
Many types of forecasts have a high degree of reliability in terms of confidence levels and calibration [1]
Choosing a new technology implies a positive forecast while sticking with an old one implies a negative forecast
More than 40% of the predictions made by Kahn and Wiener were judged to have become successful while only one of the 40 (2.5%) predicted breakthroughs achieved more than $10 Billion in sales
Summary
Many types of forecasts have a high degree of reliability in terms of confidence levels and calibration [1]. Research has found that meteorologists [2], bridge players [3], and others [4][5][6] [7] are well calibrated in terms of confidence. A recent study of intelligence forecasters found that their forecasts explained 76% of the variance in geopolitical outcomes [8], a much better outcome than previous research [9]. The better forecasts are purportedly due to greater accountability [8]. Some organizational choices involve technologies and these choices imply forecasts. Choosing a new technology implies a positive forecast while sticking with an old one implies a negative forecast.
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