Forecasting Technological Change (2)
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Forecasting Technological Change (2)

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Part two of a five part seminar on technology forecasting, tools, techniques and processes. Part four covers the trend analysis techniques.

Part two of a five part seminar on technology forecasting, tools, techniques and processes. Part four covers the trend analysis techniques.

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Forecasting Technological Change (2) Forecasting Technological Change (2) Presentation Transcript

  • Forecasting Technological Change Session 2. Trend Analysis Paul A. Schumann, Jr. Glocal Vantage, Inc. 06/07/09
  • Sessions
    • Introduction
    • Trend Analysis Techniques
    • Expert Opinion Techniques
    • Integrative Techniques
    • Closing
    06/07/09
  • Sessions
    • Introduction
    • Trend Analysis Techniques
    • Expert Opinion Techniques
    • Integrative Techniques
    • Closing
    06/07/09
  • 2. Trend Analysis Techniques
    • Shape of S-Curve
    • Dependent on utility function
    • Based on historical data (time or experience)
    • Not causal
    • Reproducible
    • Requires analysis of driving forces
    06/07/09 If you don’t know where you are, and how you got there, how can you possibly know where you are going? Abe Lincoln
  • Techniques
    • Analogy
    • Precursor Developments
    • Trend Extrapolation
    • Limit Curve
    • Learning Curve
    • Substitution Analysis
    • Multiple Substitution Analysis
    06/07/09
  • Techniques
    • Analogy
    • Precursor Developments
    • Trend Extrapolation
    • Limit Curve
    • Learning Curve
    • Substitution Analysis
    • Multiple Substitution Analysis
    06/07/09
  • Economic Maturation of Technology
    • Nonproductive (25 years)
    • Counter Productive (25 years)
    • Hyperproductive and Transformational (25 years)
    06/07/09
  • Future Forecast
    • First Industrial Revolution (1760 - 1860)
    • Second Industrial Revolution (1860 - 1950)
    • Third Industrial Revolution (1950 - 2020)
    06/07/09
  • Nature of Work 06/07/09 Source: Snyder, et al, “The Strategic Context of Education in America 2000 - 2020
  • Information Technology 06/07/09 Source: Jeremy Greenwood, The Third Industrial Revolution
  • Third IR Technologies 06/07/09 1950 1975 2000 NP CP HP 2025 DP
  • Techniques
    • Analogy
    • Precursor Developments
    • Trend Extrapolation
    • Limit Curve
    • Learning Curve
    • Substitution Analysis
    • Multiple Substitution Analysis
    06/07/09
  • Precursor 06/07/09 Time (Effort, Experience) Utility Function
  • Precursor Example 06/07/09 Source: Ralph Lenz,TFI
  • Precursor Analysis
    • Identify lead-lag relationship
    • Obtain lead-lag data
    • Decide whether lead-lag relationship will continue
    • Causal connections are best
    • Similar control factors are next best
    • Accidental relationships are misleading
    06/07/09
  • Techniques
    • Analogy
    • Precursor Developments
    • Trend Extrapolation
    • Limit Curve
    • Learning Curve
    • Substitution Analysis
    • Multiple Substitution Analysis
    06/07/09
  • Trend Extrapolation
    • If
      • Technical parameter has utility
      • Market continues to value utility
      • Driving forces remain same
      • Not approaching limit
    • Then
      • Most technologies follow a pattern of constant percentage increase
      • y = y 0 e mt i.e . (log y = log y 0 + m t ) (natural log)
    06/07/09
  • Trend Analysis 06/07/09 Source: Ralph Lenz, TFI
  • First Technology Trend Forecast 06/07/09
  • Internet Users 06/07/09
  • Internet Users 06/07/09
  • Internet Users Analysis
    • Growth
      • 114% increase per year
      • doubling time = 11 months
    • Surpass world’s population in 2005
    • Is it a utility function?
    • Limits to growth?
    • What’s a user?
    06/07/09
  • IC Example 06/07/09 www. intel.com/research/silicon/mooreslaw.htm
  • Microprocessor Speed 06/07/09 Source: TFI (1990)
  • Evolution of Computer Power 06/07/09 Source: Hans Moravec
  • Information Revolution? 06/07/09 Source: Schumann (1982)
  • Genetic Sequencing 06/07/09 Source: www.ncbi.nih.gov/Genbank/ genbankstats.html
  • Genetic Sequences 06/07/09 Doubling every 17 months Source: Enriquez
  • Chromosome Mapping 06/07/09 Source: www.ornl.gov/hgmis/posters/chromosome
  • Trend Extrapolation
    • Specify assumptions
    • Include quantitative evidence
    • Follow logical approach
    • Use prior rates of improvement unless
      • There is a limit
      • Utility is changing
      • Approach is changing
      • Driving forces are changing
    • Document reasons
    • Useful to develop alternative projections
    • Provide a basis for rational discussion
    06/07/09
  • Techniques
    • Analogy
    • Precursor Developments
    • Trend Extrapolation
    • Limit Curve
    • Learning Curve
    • Substitution Analysis
    • Multiple Substitution Analysis
    06/07/09
  • Limit Curve
    • Organic growth model
    • Often used when technology approaches a natural limit
    • Limit may not be real
    • Use limit and make forecast
    • Review limit - real?
    • Shifts usually occur as limit is approached if utility still exists
    06/07/09
  • Growth Curve 06/07/09 Source: Alan Porter
  • Limit Curve 06/07/09
  • Limit Curve 06/07/09
  • Limit Curve 06/07/09
  • Limit Curve 06/07/09
  • Limit Curve
    • Pearl curve
    • y = L / (1+a e -bt )
    • L = 350
    • a = 1.71
    • b = .038
    • t = 0 in 1937
    06/07/09
  • Internet Users 06/07/09
  • Limit Curves
    • Pearl
    • Fisher-Pry
    • Gompertz
    • Bertalanffy
    06/07/09
  • Limit Curves
    • Pearl
    • Fisher-Pry
    • Gompertz
    • Bertalanffy
    06/07/09 y = L / (1 + a exp (- b t)) y = L / (1 + 10 (A - B t) ) L = limit a = controls location b = controls shape
  • Limit Curves
    • Pearl
    • Fisher-Pry
    • Gompertz
    • Bertalanffy
    06/07/09 f = 1/2 (1 + tanh a (t - t 0 )) f = fraction of applications in which the new technology has been substituted for the old t 0 = time for 50% substitution a = controls shape
  • Limit Curves
    • Pearl
    • Fisher-Pry
    • Gompertz
    • Bertalanffy
    06/07/09 Y = L exp (- b exp ( - k t)) Non symmetrical
  • Limit Curves
    • Pearl
    • Fisher-Pry
    • Gompertz
    • Bertalanffy
    06/07/09 y = L + (y 0 - L) exp (- b t) L = limit y 0 = initial value b = controls shape of curve
  • Envelope Curve 06/07/09 Source: Ralph Lenz, TFI
  • Scanning 06/07/09
  • Envelope Curve 06/07/09 Source: TFI 1983
  • Techniques
    • Analogy
    • Precursor Developments
    • Trend Extrapolation
    • Limit Curve
    • Learning Curve
    • Substitution Analysis
    • Multiple Substitution Analysis
    06/07/09
  • Learning Curve
    • Some improvements can be forecast better based on experience rather than time.
    • Frequently production costs follow this type of relationship
    • y = a x - b
    • log y = log a - b log x
    06/07/09
  • Learning Curve
    • Frequently experience is equivalent to cumulative production quantity
    • Usually expressed as percent improvement for each doubling of experience
      • 5% cost reduction in 2x
      • 95% learning curve
    06/07/09
  • Learning Curve Example 06/07/09 Source: Porter
  • Residential Electric Power Learning Curve 06/07/09
  • Residential Electric Power Learning Curve 06/07/09
  • Residential Electric Power Learning Curve 06/07/09
  • Techniques
    • Analogy
    • Precursor Developments
    • Trend Extrapolation
    • Limit Curve
    • Learning Curve
    • Substitution Analysis
    • Multiple Substitution Analysis
    06/07/09
  • Fisher-Pry Substitution Analysis
    • f = 1/2 (1 + tanh a (t - t 0 ))
    • f = fraction of applications in which the new technology has been substituted for the old
    • t 0 = time for 50% substitution
    • a = controls shape
    06/07/09
  • Shape of Fisher-Pry Curves 06/07/09 t 0 = 3 a = 0.5 a = 1 a = 1.5
  • Substitution of Steam for Sail 06/07/09 Steam Sail
  • Steam/Sail Fisher-Pry Substitution 06/07/09
  • CATV Substitution in US 06/07/09 Source: Martino, 1983
  • CATV Substitution (US) 06/07/09
  • Telecommunication Technology Substitution 06/07/09 Source: Lenz & Vanston, TFI 1986
  • Telecommunications Substitution Analysis 06/07/09
  • Techniques
    • Analogy
    • Precursor Developments
    • Trend Extrapolation
    • Limit Curve
    • Learning Curve
    • Substitution Analysis
    • Multiple Substitution Analysis
    06/07/09
  • Multiple Substitution Analysis
    • Requires a more generalized substitution model
    • Lotka-Volterra equation
      • dX n / dt = X n M n (X n ) = growth in technology
      • X = existing levels of technology
      • M(X) = market potential
      • = a n - b n X - c n Y
    06/07/09
  • Multiple Substitution Example 06/07/09 Source: Porter
  • Comparison of Models 06/07/09 Source: Porter
  • Summary
    • Trend analysis has strong historical validation
    • Models have been accepted but not explained
    • Quantitative
    • Does not explain how change will occur
    • Often misused and misunderstood
    06/07/09
  • Summary (cont.)
    • First noticed by Henry Adams in 1918
    • “ Knowledge begets knowledge as money begets interest.” - Arthur Conan Doyle
    06/07/09
  • IC Line Width 06/07/09
  • Trend Analysis
    • Analogy
    • Precursor Developments
    • Trend Extrapolation
    • Limit Curve
    • Learning Curve
    • Substitution Analysis
    • Multiple Substitution Analysis
    06/07/09 Data, Insight Surveillance Material Change Trend Analysis Formal
  • Glocal Vantage, Inc.
    • PO Box 161475
    • Austin, TX 78716
    • (512) 632-6586
    • [email_address]
    • www.glocalvantage.com
    • http://incollaboration.com
    • Twitter: innovant2003
    06/07/09
  • Paul Schumann
    • Futurist and innovation consultant
    • Application of web 2.0 to market & strategic intelligence systems
    • Web 2.0 tools & technologies
    • Application of web 2.0 to democratic processes
    • Broad perspectives on the future
    • Services
      • Strategic market research & technology forecasting
      • Intelligence systems consulting
      • Seminars, webinars & presentations
    06/07/09
  • This work is licensed under the Creative Commons Attribution license. You may distribute, remix, tweak, and build upon this work, even commercially, as long as you credit me for the original creation as Paul Schumann, Glocal Vantage Inc, www.glocalvantage.com. 06/07/09