Generating Quality Industry & Policy Foresight for Emerging Markets

Adam Gordon

1.  Quality in foresight, a half-dozen thoughts

2.  Emerging markets, SA 2030

“BeforemanreachesthemoonyourmailwillbedeliveredwithinhoursfromNewYorktoAustraliabyguidedmissiles.Westandonthethresholdofrocketmail”‐‐ArthurSummerfield,U.S.PostmasterGeneral,1959

Forecast failure

Housing market 2004-2013

 “RobustdemandwillrequireproducLonof2millionnewhousingunitsayear.

 “ThenaLonalhomeownershipratewillexceed70percentby2013.

 “HomepriceappreciaLonwillaverage5%ayear2004‐2013.

 “MortgageoriginaLonsareprojectedtoaveragenearly$3trillionperyear.”

TheNextDecadeforHousingandMortgageFinance(2004‐2013)HomeownershipAlliance:www.homeownership.comReportavailableatwww.freddiemac.com/news/pdf/

The cost of poor foresight:

Poor decisions: business, economy, public policy environment, defense, etc.

A

B

C

?

1. Lowuncertainty.Clearviewofthefuture.Dependableoutcome

2. Limitedsetofpossiblefutureoutcomes,oneofwhichwilloccur

3. Outcomesindeterminate,butboundedinarange

4. Alimitlessrangeofpossibleoutcomes.

21

3 4

HUGHCOURTNEYETAl;2020FORESIGHT,HBSPRESS,2001

‘Levels’viewoffutureuncertainty

Chapter 1. Forecast Intentions Chapter 2. Quality of Information Chapter 3. Bias Traps Chapter 4. Zeitgeist & Perception Chapter 5. User Utility Chapter 6. A DEFT View of Trends Chapter 7. Limits of Quantitative Forecasting Chapter 8. A Systems Perspective Chapter 9. Anticipating Alternative Outcomes Chapter 10. Case Studies Chapter 11. Quality in Foresight ‘Cheat Sheet’

1.Thelimitsofsectorexperts

Chapter3

‘Techpushvs.Consumerpull’

Chapter5

2.Customeriskingofthefuture

3.LimitsoftrendextrapolaYon:

‘

underesLmate

overesLmate

Chapter6

Driver TrendOutcome1Outcome2Outcome3

Driver

Driver FricYon

Turners&

Blockers

Enablers

4.Extrapolatethetrend,disbelievetheoutcome

5.LimitsofquantforecasYng:Theturkeyproblem

Chapter7

TALEB:THEFOURTHQUADRANT:AMAPOFTHELIMITSOFSTATISTICS[Edge,2008]

“Historydoesn’twalk,itjumps.”

GameChangers(wildcards,blackswans)

‘Predictable’environment,steadyevoluLonfromthepresent:

 InformaLonrich

 Notpronetotechupheavals Stableregulatoryenvironment

 Wellestablishedmarkets

 Stableplayers.Highbarriers Consistentdemand

 Nogreatsocialpressure

‘WellBehaved’vs.‘BadlyBehaved’change

 UncertaintechevoluLon Uncertaindemandfornewproducts&services

 UncertainevoluLonoflegislaLveenvironment

 Unstablemacro‐economiccondiLons:inflaLon,interestrates,currency

 Shihingsocialvalues,mores,preferences,orientaLons

NosteadyevoluLon

‘

ANALYSIS

PointpredicYon

Scenarios

Chapter9

Exploring the cone of plausible uncertainty

present

?

AdamGordon

Atestbedfordecision‐makers:Stress‐tesYngdecisions

TheSixthSense

VdHEIJDENETAl;THESIXTHSENSE,WILEY,2002

Notascenarioset

6.Thelimitsoffuture‐advocacy

AdapLvevsVisionaryforesight(Futurealigningvs.Futureinfluencing)

MetLife,Aids2025Arup,EcoresortsTanzania2025

ImplicaYonsforemergingmarkets,viewsofSA2030

1. Expectbadly‐behavedchange

2. PracLcequalityinforesight.Nohead‐in‐the‐sand,butseverelimitsonpredicLon(incl.limitsofexperts)

3. Respectconsumers/adopters,theydeterminethefuture.

4. DisrespecttrendextrapolaLon.ApplyDEFT

5. Respectlimitsofquantmodelling.Don’tbetheturkey

6. Knowwhenwecaninfluencevs.whenwemustadapt.

AdamGordon

adam.gordon@futuresavvy.net

hop://futuresavvy.net

c.083‐745‐4580