ONE POINT OF VIEW As a futurist, the recent economic collapse in the telecom sector has to be of professional interest to me, aside from any general concern for the health of the economy. The boom and bust in this sector was by no means unique in business. One can go back to the post-Civil War period and find that, in a single decade, 70,000 miles of railroads were built and by the end of the next decade some 40,000 of those miles were bankrupt. In a nutshell, I see the telecom story as one of incredible incompetence on the part of three different business groups: * Suppliers to the industry. * Venture capitalists. * Would-be niche fillers. First consider suppliers-the top of the supply chain, which also heads the value chain. Many, but not all, allowed their businesses to fall victim to unnecessarily flawed forecasts. This illustrates the first of the recurrent errors that forecasters make, namely, to anticipate that developments will occur sooner and have wider and greater impact than they actually do. There can be little doubt that companies think seriously about the future of information technology and recognize that in all its many forms, but particularly through networks like the Internet, it will greatly expand and improve personal, business, governmental, and global interactions. In the long pull, the optimism that promoted the bloat is likely to be justified but simply misplaced in time. Nevertheless, the head of the supply chain is always confronted with the need to understand the market one, two, three, or even four links down the value chain. If suppliers fail to independently evaluate what is happening and which developments are likely, they become captive to their immediate customers' beliefs and the general ambience of optimism. Three Kinds of Forecasters Who or what could have helped? There are three kinds of business forecasters. The first-and most numerous-- are the short-term forecasters. They tend to be concerned with the next three years, occasionally stretching out to five. Their methods are highly quantitative and make extensive use of well-developed mathematical models. Unfortunately, the consequence of such short-term forecasting is often to exclude less familiar factors that could radically challenge the significance of the forecaster's database or even make the quantitative model he uses irrelevant. The decline within the now troubled or already departed firms is due primarily to having placed too much reliance on traditional forecasting models. Traditional models in untraditional times can be deadly. The second kind are business-oriented academics. Because their thinking rarely has any practical interest (i.e., any short-term business or organizational ties), I set them aside as irrelevant. The third kind are applied futurists, who generally go well beyond the 1-3 year or 1-5 year time frame and examine forces and factors influencing the entire system of concern to the client or business. These applied futurists, who may be internal staff or external consultants, will not look just at the supplier and its customers, but also at the full surrounding context, up-stream and down-stream to second, third, and fourth-stage users. My suspicion, based on little published evidence, is that the failure to attend to the longer-term perspective of many futurists was a big contributor to the telecom bloat and inevitable collapse. Listening to the customer alone is simply inadequate. Venture Capitalists The second group-venture capitalists-are themselves much to blame because the key feature of American venture capitalism, which is a primary factor in their success, is the demand for a first-class business plan by those in whom they invest. The failure to force adherence to their own guidelines marks the collapse of, for example, the Internet-based grocery delivery chain, Webway. …