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Through a glass darkly
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AND THAT WAS THE FUTURE
Through
l
l
l
a glass darkly
The future
Denis Loveridge
Although the phrase think-tank is little more than 30 years old, the search for new opportunities in commerce and industry has been going on a long time. The rapid overseas expansion of European nations began with the maritime centre which Henry the Navigator established at Sagras in Portugal. Four centuries later other searchers after new areas of exploitation-Nasmyth, Bessemer, Stephenson-had immense effect on the growth of the new steam-powered industries and dependent businesses. And so it has gone on ever since-to the development of the new transistor in the Bell Laboratories in 1947, to Alistair Pilkington’s invention of float glass in 1952 and beyond. As Denis Loveridge shows in this article, these and many similar revolutionary inventions depend on personal endurance for their successful completion, while their widespread adoption has repercussions over many decades, making it imperative for industries to look ahead. Foresight in this context needs to adopt a wider view than simply that of technological optimism; what is needed is business built on the philosophy of wisdom, on the concept of value, which embraces the wider issues of business and creates achievable visions for its future.
The debate, and perhaps the battle, between the long and the short view in business is never-ending. There are protagonists for both views in the City and in industry. While it is true that the future can only be reached through the present, the shape of the future will differ significantly if it is approached through a series of short, halting and apparently random steps by comparison with the
Denis Loveridge is a Director of Pilkington Micro-electronics Limited, Prescot Road, St Helens, Merseyside WA10 3ll, UK. The views expressed in this article are those of the author and not necessarily those of Pilkington.
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brisker stride towards a longer-term vision. The importance of disciplined, long-term vision to the development of industry is a core concern for forecasters because the opportunity to contribute significantly to it represents their influence on future events. Formal forecasting has grown apace during the last 30 years as its path shows. Despite this, one of the core concerns, if not the concern for forecasters-the core remains value-largely question of neglected except by a few devotees. The power of the concept of value, of what people will value in their lives, is powerfully related to the success of products and services, but whilst the
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And that was the future.
concept is the basis of much of the debate that follows it is too complex a concept to do more than refer to in this essay. Conjecture does not come easily to those whose daily concern is making something, whether it be products or money. Yet these same people depend on conjecture to conduct their daily business. Whether it be the question ‘Shall I win that order?’ or ‘What price will X’s shares be today?‘, uncertainty abounds, and though it is not removed it is resolved through conjecture. Many believe that the future can only evolve disjointedly, in short steps. In one sense that is true, but where do these disjointed steps lead? How can disjointed steps lead to vision? If the window is of obscured glass, who can see past the fragility of the present? Many attempts have been made to see through the heavily tinted glass of the immediate present to discern, however uncertainly, what lies beyond. Too often for businessmen the vision of what lies beyond the immediate present has been utopian and unbelievable. Connections with the present have been tenuous at the least, if not entirely absent. Utopian writing is in this sense what Alexander Haig characterized as ‘Vision without discipline . .‘; it is ‘. . . daydream’.’ Utopian writing has its place, and its impact on human development should not be underestimated. Many creative activities have an element of utopianism, while the more esoteric hypotheses of science often have a similar tinge in the early stages of their formulation. But for business, vision has to be more concrete than utopia, yet not so concrete as to be mundane, devoid of imagination and conjecture. In science and the sociopolitical sphere the longterm influence of conjecture begins to show itself most strongly as a precursor to future profits and as a limiting agency on unbridled exploitation in their pursuit. For most people in business the future is a matter of a few days or even a few hours. Perhaps rightly only a comparatively few people concern themselves with the longer-term trends that are being set by minute-by-minute transactions, whatever their nature. Even fewer people concern themselves with the possibilities the future might hold if certain events, for which precursors are known or can be identified, come into play. It is largely an attitude of mind; of whether the
future happens to you, in concrete form, day by day, or whether you shape the future for yourself and others by longrange actions. It is fortunate for everyone, from the short-term money maker to the scientist or inventor working at the limit of understanding, that there have been and always will be both people and organizations willing and able to dwell on matters that take many years, if not decades, to reach the full extent of their impact. The money makers of the world’s stock markets would have little to do but for the eventual widespread use (later called ‘innovation’) of the inventions of Alexander Graham Bell, Perkins (of aniline dye fame), Alfred Mond, Charles Babbage, and more recently Watson and Crick; Shockley, Bardeen, and Brattain; Kilby; von Neumann; Alistair Pilkington; Muller and Bednorz; and a host of other people in every walk of life. We cannot be certain that their thoughts were simultaneously directed towards some more distant goal which would ensure the creation of future profits for businesses well before they would be needed to satisfy the immediacy of stockholders, but that was the outcome. Satisfying
questions
of value
At its heart business depends on knowledge or, more cogently, wisdom for its very existence. Wisdom it is that asks the questions ‘What is of value to the human condition?‘, or ‘What do people value in their lives?’ Business exists solely in response to these questions, or should do so. Von Mises put this into context by stating that: ‘Economics is not about goods and services, it is about actions of living men.‘l Businesses then, must respond by providing what people value at a price that persuades the purchaser that he prefers ownership of the product or service to the money in his pocket. While business exists in response to the questions of value, how business responds is problematic in the extreme. What is of value to one person is not to another. What is of value to one group of people is inimitable to another. The variety is enormous in comparison to business’s capability to respond. How, then, has business anticipated or identified products and services that would soak up this enormous variety of expecta-
The beginnings
Inventions
of modern
research and a prototype of the Royal Society, imagined by Bacon in the New Atlantis of 1621
Solomon’s
House, as
attracted keen interest among 18th century printers who found lucrative markets in artists’ impressions
still a dream for engineers
In the 19th century Jules Verne showed already accomplished
what was An impression of what the Channel Tunnel would look like, about 1880
By the 20th century industry and planners have come together, as in the Pilkington redesigned Bond Street in the 1930s. Courtesy Pilkingtons
projection for a
and in another Pilkington projection for the planned city in the 1950s. Courtesy Pilkingtons
A high-speed
-----
and long-distance
-
communication
system proposed in the 1970s
r rC
--
_
--
And that was the future.
tions, some of which are conflicting and others mutually supporting, in its search to satisfy the questions of value? It needs to be said at once that many businesses do not attempt anticipation or identification of valued products and services; they imitate what other businesses have already attempted. The success of this strategy is clear from the number of occasions when the imitator has ended up dominating the particular market, at least for a time. Between 1945 and 1975 Japanese business adopted this strategy widely; but the Japanese are not alone-imitation is universal. For the imitator it matters little whether the glass in the window on the future is dark or totally opaque; his is not a view of the future. What is of value has been firmly established by others, in advance. The imitator’s task is to transform costly luxury of uncertain quality and reliability into mass satisfaction through widely dispersed ‘valued products’ at affordable cost, high and consistent quality and high reliability. He turns the world on its head. If the imitator causes a transformation of markets and production methods, then it is the inventor and innovator who, between them, first satisfy the question of value and create a market mechanism for disseminating that satisfaction increasingly widely, in this way making the future. While examples of the more or less heroic struggles by inventors and innovators to achieve their ambitions abound in the popular technical literature, there are also many similar examples in non-technical fields, including law and finance. These innovations (eg, product liability, health and safety) haveworked in powerful combination with technical innovation, sometimes helping and on other occasions placing impediments in the path of innovation, but always, either explicitly or tacitly, indicating a social response. to the question of value as applied to any product or service. Role and evolution
of forecasting
What role has forecasting played in helping businesses to develop visions of their future? Since 1945 businesses of all kinds have sought ways of identifying or anticipating opportunities for growth or threats to their existence. In the immediate post-war years the need for
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such foresight seemed marginal; reconstruction and empty shelves made for a sellers’ market for a few short years. Now the situation is different. Even a cursory look through mail order catalogues of the early 1950s and those of today reveals staggering changes, not only in the range of products, but also in theglobal sources of supply. In the UK, use of the slogan ‘Made in Britain’ to define highly soughtafter products died many years ago. Could this have been prevented by dedication to foresight, to maintaining at the heart of business a dedication to looking beyond the immediate demands of investors and of the business itself? The need for foresight, to look well beyond immediate needs based on products of established value to those that are likely to become valued, has never been universally accepted; this is typical of the debate between the imitator and the innovator or the short-term financier and the innovator. Often foresight has been limited to more prosaic ends, such as indicating when production of a product should cease (this is hardly foresight if the determinant is unprofitable sales). In the anticipatory sense, where future profits are secured before the need for them arises, foresght has more often been practised by individuals than through any formal corporate process.
Era of grand
futurism
The 195Os, however, saw the emergence of technology forecasting from the enclaves of establishments such as the Rand Corporation and others. From these beginnings the ‘futures research’ fraternity grew during the 1960s and 1970s into a multiplicity of consultancies or company or academic think-tanks, with a wider remit than simply technology. Indeed the 1960s and 1970s were probably the halcyon years of technological forecasting and its later mutation into what became known as social or sociocultural or sociopolitical forecasting. None of these activities was new, but they had perhaps never before been put forward by so vociferous a group of people. Looking back this period is easily recognized as the era of ‘grand futurism’, not in the sense of the utopian societies portrayed in the first half of the century, though these continued to appear, but in the new
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sense of forecasting the future of the world’s society. The first landmark may well have been Kahn and Weiner’s The Year 2000 published in 1967.’ Kahn’s basic position was one of technological optimism, whoever his co-authors were. Rebuttals of more pessimistic publications came in forthright fashion. Targets were, for example, The Limits to Growth” and The Global 2000: a Report to the President.i By implication many other reports to the Club of Rome were seen by Kahn as But were they? The grand defeatist. modelling based fundaapproach, mentally on Forrester’s systems dynamics methodology, had never been tried before. Its sheer effrontery, to represent the world system as a set of equations, was enough to provoke emotive but often ill-informed argument. More thorough and more informed criticism came in the torm of Cole et al’s ThInking about the Future.6 Here the absence of economic mechanisms, of the political dimension and so on were pointed out. Remedies, partial or complete, for these deficiencies were soon forthcoming as more complex ‘world models’ appeared (eg, the SARUM model,: the work of Interfutures,” etc). At almost the opposite methodological pole the Brandt Commission, perhaps the grandest study of all, approached its task without an equation in sight and in both its major publications focused almost exclusively on socioeconomic/ the political dilemmas the world faced as seen at that time.” To most businesses these forecasts seemed remote and the conflict between the optimists and pessimists seemed perplexing. Return
of the long
cycle
In the early 1980s the grand study slowly disappeared from view as grand recession smote futures groups one after another until only a few survived. As the grand era for futurism died, an older mode of thought returned, based on the so-called long cycle of economic development, most often associated with the name Kondratieff.‘” The work by Freeman eta/” contains perhaps the best exposition of the relationship between invention and latter innovation-the technological being the process that business really backs-and the long cycle theory of
economic development. It examines at length the relationship between innovation and economic development. Contentious though the long cycle theory may be, there is evidence that surges in innovation, based particularly on enabling or generic inventions, do take place at intervals having some regularity. These surges seem to occur at 45-60 year intervals, to coincide with periods of economic stagnation and to be based on inventions that have occurred haphazardly in the decades preceding each surge. Many hypotheses have been put forward explaining the role these surges play in the economic upswing. Are they the cause or a symptom of economic resurgence? What is more certain is the revolutionary and all-pervasive nature of the inventions that fuel these bursts of innovation as they permeate all aspects of business, destroying and reshaping old businesses and creating the opportunities for many new ones. Methods of forecasting inventions and innovations proliferated during the 1950s and 1960s. No one was bold enough to label any of the many methods and processes scientific, though, as the definitive review by Jantsch made clear,lL a great deal of pseudoscience was applied, first in technological forecasting, and later in its extension to social forecasting. The forecasting methods themselves were variable in their success, which often depended cruciallyon the practitioner. In its heyday perhaps too much certainty, too much predictive clarity was expected of an exceedingly fuzzy and conjectural activity. Too often the uncertain and value-laden nature of history and its influence was misunderstood, while the even greater uncertainties, paradoxes and ambiguities surrounding events that have yet to happen, was overlooked. It has been demonstrated by Amara and Lipinski” how overconfident most acknowledged experts can be when asked to project their special knowledge into the future, producing too narrow a perspective of the possibilities for the future. The methods of forecasting certainly evolved throughout the two decades from 1960 to 1980; the spectrum ranged from the highlyquantitativeto theartistic. The most highly structured, excluding econometrics, was Forrester’s systems dynamics, with its emphasis on feedback
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And
loops, in the manner of control theory.14 From systems dynamics there was a steady progression to probabilistic modelling of various forms, culminating in decision analysis, as the wish explicitly to encompass uncertainty increased. Game theory and probabilistic and behavioural cross impact analysis created a bridge between objective and subjective probability, with the incorporation of judgments. Finally, the value-based spectrum was completed with the pure art form of scenario writing, an approach long favoured by military strategists. The rise of cheap computing power has, if anything, promoted a merging of these approaches, all of which have but one common aim, to explore future possibilities within the compass of known events or those that can reasonably be anticipated, be they social, technological, economic, ecological, political, or shifts in values. These methods are in effect tools for the examination of possible responses to the questions of value that beset business. The community of forecasters has been divided over the value of these methods; the protagonists of the highly numerate methods never quite seeing eye-to-eye with those who preferred the softer artistic methods. Business
response
How business has benefited from technological forecasting and its successors it is hard to say. Indeed, this subject would require a separate essay for its elucidation. Well authenticated examples, free of post hoc rationalization, are hard to come by. Too often business has been unable to reveal how particular inventions and innovations were made, owing to commercial pressures. By the time these pressures have passed many years have gone by. There is no doubt about the high level of activity directed towards project selection and other forms of management activity, relating to the management of research and development, and of innovation (as distinct from inventions). These activities are so common, and so basic that they are often not regarded as related to forecasting, but they are, since value judgments will be made concerning the relative merits of one development programme as opposed to another. The extent to which formal forecasting
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that
was the future.
687
methods of the kinds already outlined are used in making these judgments is uncertain, but the judgments will be based, implicitly or explicitly, on mental models or scenarios or conjectures about the likely outcomes. One thing is certain -the judgments are value-laden and not value-free; they depend on what Maxwell has described as the philosophy of wisdom and not the philosophy of knowledge, which proposes that knowledge is value-free.ri In a business or a group of businesses these judgments are a collective response to the question of ‘What is of value?’ (to the business or group of businesses), and implicit in these collective judgments is the belief that they are likely to satisfy individual responses to the question ‘What is of value?’ (to me) in large enough numbers to make the outcome profitable. What did business make of all the forecasting activity of the 1960s and 197Os? Probably not as much as it should have done. The perplexing conflict between optimists the and pessimists was Hegelian dialectic in character, but even now the creative synthesis from the opposing positions has not occurred. impending Warnings of change abounded-warnings of the possibility of climate change due to thermal, particulate and gaseous pollution interfering with the world’s atmospheric behaviour; of fuel and raw materials shortages. The latter should, and perhaps did, have an impact on business, as they were aided by direct happenings in the real world so that fuel utilization and the whole materials field has now changed out of all recognition. Indeed the likelihood of the world economy foundering through the exhaustion of raw materials now seems remote, thanks to many inventions and much innovation. The long dream of the ‘workerless factory’ nears reality. Perhaps the warnings implied by the long cycle theory were ignored most of all in a period when economic growth seemed to be on an ever upward path. At a different level whole new industries and dependent businesses have been created during the last 30 years. Electronics; nuclear power; synthetic fibres with undreamt of properties; ceramics that contain no silica; and an astonishing range of polymeric materials for a legion of uses-all have helped the
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rise of a clutch of new industries. Similarly, international television and all its support services have come into being almost without being noticed, as has a whole new recorded music industry, based initially on the microgroove LP disc and the microstylus of the disc reproduction system and latterly on the digital compact disc; the list of changes and new businesses is in danger of becoming endless. While many of the themes of business are timeless, ways of conducting business that seemed almost immutable have changed too under the influence of electronic communication. The pace of moving funds and information around the world has changed out of all recognition, connecting the world’s financial centres together more directly than ever before, enabling changes in market conditions to be transmitted throughout the introducing in seconds and world virtually synchronous behaviour in the world’s markets. At this level of interconnection it was entirely predictable, from cybernetic theory, that instability would be brought to the world’s financial and stock markets. When these events will occur remains unforecastable, as the events of 19-20 October 1987 demonstrated only too clearly, since their precipitation depends on many thousands of individual changes in response to the question of value. Similarly, facsimile transmission makes telex look dated, only law preferring the latter for the time being. Both media seem likely to lose out to electronic mail eventually (electronic mail was torecast with great foresight by Vannevar Bush in 1945, nearly 30 years before the first experiments were made), while it is clear from the popularity of ATMs that freedom of access to money is highly valued! Philosophy
of wisdom
Yet for all these changes the future of business depends fundamentally on the philosophy of wisdom and businesses’ response to the question of what is of value to the human condition. In this context the passing of the era of grand futurism has left much thoughtful and thought-provoking material, arising from studies conducted, as all studies of the future must be, from a base of what was
known and events that were judged to be possible but highly uncertain at the time the studies were conducted. It was, by any standards, a productive period in which the question of value was raised time and again. The dialogue between the optimists and the pessimists was really an argument over the ability of humanity to control its environment with confidence in the certainty of outcome, to its lasting benefit. The technological optimists believed control to be possible, providing the means to support a world population of IO-12 billion people in relative affluence, and to do so within a century. Indeed, Kahn went so far as to contemplate a world average GNP per capita of $20000, some 20 times the comparable figure for 1986. In contrast the pessimists, as they were termed, were concerned that humanity had (and still has) little real understanding of how to intervene, with certainty of beneficial outcome, in a system as complex as the world’s socioec-osystem. The continuous flow of conjectures, refutations and counter-refutations that emerged from the opposing camps produced a stream of ideas from authors such as Peccei,‘” Max Ways and others;‘: Teige, Harman and Schwartz;” Hawken;“’ and Robertson;“’ these were but a few of the more philosophical outpourings of the time. Far from their ideas being remote problems, business has found itself enmeshed in all of them in one way or another, as it tries to decide what will be of value to the human condition and will at the same time create sufficient flow of cash to sustain the increasingly frequent demands for investment in new systems, new processes and a demand ultimately new products, brought about by the changing expectations of people who are asking ‘What will be of value to me’? It may be almost too simple to say that the dynamics of the international market place and its political dimensions now reach into the humblest of homes more than ever. Successive revolutions in transport and communication have changed people’s expectations of products and prices in ways that even 20 years ago were barely thought possible. Not only are many products now more comprehensive in their design and execution, they are made at better quality, and sell at prices
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And that was the future.
that are often significantly lower than their inferior predecessors. Cameras, washing machines, hi-fi equipment, computers, calculators, microwave cookers, telephones, watches and clocks all have these characteristics, while many other including video equipment, products, motor cycles and motor cars are heading in the same direction. It is probably outrageous to say that the non-essentials of life persistently become relatively less expensive, whereas the essentials (food, fuel, etc) become perversely more expensive. The steady cheapening of high quality manufactured goods stems from parallel changes in design methods and in manufacturing processes, and control of them, allied to ever widening markets as more products change from luxury to everyday use. The truly international nature of this enterprise, which has earlier been described as the role of the imitator, has been masked by the popular image of the Japanese as pastmasters of product and process improvement. Nevertheless it is not an exaggeration to say that each industrialized country has made a contribution to the advance of product and process improvement. Did technological forecasting and its successors fail to find winners for business in the period from the 1950s to the 197Os? If it did, are its present and future practitioners likely to do any better? Does business know what it expects of forecasters? The pursuit of winners does indeed seem to be futile if it is not conducted in accordance with the philosophy of wisdom, as Maxwell describes it. The question of value is paramount, but how often is it taken seriously, since it implies a mode of thought that conventional market goes beyond research and forecasting? For many businesses much activity is concerned with product extension, a modified form of imitation, through the stretching and nesting of existing product or service concepts. The truly new product or service, based on radical invention, is a relative rarity and its occurrence is highly unpredictable, save by a few especially knowledgeable people. The truly new is in most instances beyond the perception of forecasters except in some general and uncertain way, the often called ‘wild card’. The identification of issues that will
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have
major
different claim
impacts
matter;
on
here
considerable
ambitions
of forecasters
business
is
a
forecasters
can
success.
The
and business
are
in many senses diametrically opposedforecasters seeking to expose the trends and uncertainties that surround human actions, and business seeking certainty of outcome of actions directed towards securing profits. In the 1970s the pseudocertain world of the 1950s and 1960s collapsed, but perversely this also brought about the collapse of much forecasting activity at a time when business needed robust visions of its future, however dark the glass through which the future was seen may have been. Major change Looking both back into history and forward into the future it is hard to argue otherwise than that the world’s economy and industries are in the midst of a major period of change, foreseen in part by Toffler in 1970.L’ What is incontrovertible is the radical nature of the major generic technologies that are now reshaping manufacturing industry and business. Both history and present happenings point towards a revival of the world’s economy during the early to mid-1990s. Perhaps the greatest danger for business is that of ‘anorexia industrialosa’, not from the excessive desire to make a company leaner and fitter, but from the starvation of skills as demographic change bites. The seeds for this condition were planted in two ways in the late 1960s. First,
to quote
McDonald,22
the then current ‘whiz-kids’ were milking dry the brilliant endeavours of past generations of entrepreneurs, without any attempt to invest in new products (or processes and markets). Rationality to them meant only shortterm results and profits on a product-byproduct basis . Regard for competitive position, market shore, research and development . . seemed irrelevant . this approach, all in the name 7f rationality and prudent management, . . 1,.ore than any other, has caused Britain’s econwnic decline.
Today these same principles have reemerged to sow more deadly seeds for the future of unwary businesses in a world business environment more hostile than that of the late 1960s and early 1970s in which the all-pervading radical techno-
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logical changes, and the Japanese determination to be itchiban (number one) in all of them is fearsome indeed. Second, the birth rate fell sharply from 1964 onwards throughout Europe and many OECD countries, indicating a major and global change in expectations, in what was seen to be ‘of value to me’ and also at the family level. The repercussions of this complex changewill influence industry in many and diverse ways for decades to come. Shifting
expectations
It would be easy to describe the business of the future in utopian terms involving a myriad of technological marvels reminiscent of Huxley’s Brave New World.” However near at hand the unmanned factory may be and however deeply information technology may penetrate the service sector, the question of value and Maxwell’s philosophy of wisdom needs to command increasing attention, as the discernment of the purchaser of products and services becomes ever sharper. Modern behavioural methodology indicates that major shifts in personal expectations, in what is valued, are in train; Nelson touches upon these, but the work she refers to is only the tip of an iceberg.14 Much social and behavioural information now exists indicating how consumer expectations and purchasing intentions are distributed, and how the patterns are changing. The continuing search for quality is a trend that business cannot afford to ignore-not so much the quality extolled by TV advertising nor by pundits such as Peters and Waterman, but a deeper quality which is the attribute of a product or service sought by Persig, a quality that addresses the question of value.L5 If the 1960s and 1970s were the age of geopolitics, then the foreseeable future will be the age of geo-economics. Indeed the impending opening of borders in Europe in 1992 is a response to this trend. Businesses have become global, reaching into homes and also affecting the environment in which we live in its many dimensions. Few businesses have yet recognized the responsibilities their global reach places upon them and because they act in a highly competitive world economy, there
appears to be little room for acting in ways that are ecologically and socially benign or enhancing. The appearance of the hole in the ozone layer in the upper atmosphere over the South Pole, the connection between smoking and health, the long-term nitrification of water supplies by nitrogen run off, the presence of PCB residues in many oceans are all the result of business activity. Conversely product liability, pollution control legislation and much other legislation are the social response to these trends. The time lag between the initiation of any trend and any form of social response is long, typically 10-20 years, unless it is provoked by some climactic event. History shows that neither business nor forecasters should expect too much of each other; as described earlier their purposes are often antithetical even when they are supposed to be working in unison. Both should cherish their combined successes, particularly when future human well-being and future profits are secured through foresight that leads to environmentally benign, socially enhancing business which yet results in products and services that anticipate what people will come to value so that their widespread adoption is self-assured. Penetrating the glass Vision and breadth can of depth penetrate the dark glass of the future, but only if it connects with the present can vision also make sense of the question of value. As with all matters relating to the future, the future of business is unknowable. Yet McDonald’s words have a ring of truth about them as the City talks increasingly of companies being attractive acquisitions for their ‘break-up’ value. In what endures and secures contrast, future profits takes a long time to create and requires boldness and endurance, set through a vision of what is achievable, which is not daydream and which addresses the question of value. The global businesses of the future already have these traits. They understand too that power comes from in-depth quality and excellence, as these are measures of an intended the ability to achieve outcome with the minimum of perverse and unintended associated outcomes. The shining vistas of the future portrayed
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And that was the future.
by utopian writing have their place, but business must concern itself with the philosophy of wisdom, with the question of value, if only because the less well off contribute more to profits than do the wealthy. To the poor, utopian vistas are daydream. Foresight is essential to the future of business. It helps to create the brisk and confident stride towards a strategic vision, and creates the endurance to reach it. Yet foresight can be made even more meaningful if its focus is on the question of value rather than on unconnected knowledge. Value is the cause of the integration of knowledge, leading to thecreation of businesses based on the philosophy of wisdom. However, forecasting and foresight only become effective
when
power
they
to bring
a strategic futurists must not the sole future.
are
associated
about
vision. remember possessors
Many
other
with
a direction
and
too that they are of insight people,
into
the
some
of
context, have produced visions of the future with uncanny perception of the directions in which the world’s society is moving. Humility-the Socratic perception that we do not know what is of value to the human condition-is essential; equally essential is the need for conjecture in the absence of knowledge for the continuing improvement of the human condition. The glass through which the future is seen may be dark, but it is not opaque. whom
are rarely
heard
8. 9.
10.
11.
12. 13.
of in this
14. 15.
16. 17.
18.
19.
References 1. A. Haig jr, Caveat (London, Weidenfeld and Nicholson, 1984). 2. L. von Mises, Human Action: a Treatise on Economics (Lake Bluff, IL, USA, Henrey Regnery, 1949). 3. H. Kahn and A. J. Wiener, The Year2000: a Framework for Speculation on the Next Thirty Three Years (New York, Macmillan, 1967). 4. D. Meadows et al, The Limits to Growth: a Report to the Club of Rome (New York, Earth Island, 1972). 5. G. 0. Barney et al, The Global2000 Report to the President: Entering the Twenty-first
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7.
the
towards
Forecasters
6.
December 1988
20. 21. 22. 23. 24.
691
Century (Washington, DC, Report prepared by the Council of Environmental Quality and the US Department of State, 1980). H. S. D. Cole et a/, Thinking about the Future: a Critique of ‘The Limits to Growth’ (SPRU, Brighton, UK, Chatto and Windus for Sussex University Press, 1973). P. C. Roberts, ‘The SARU models’, paper to Futures symposium, 9 November 1979. I. Lesourne, Facing the Future (Paris, OECD, 1979). W. Brandt, North-South: a Proaramme for Survival (London, Pan, 1980); a& Common Crisis: North-South-Cooperation for World Recovery (London, Pan, 1983). N. D. Kondratieff, ‘The long waves in economic life’, Review of Economic StatisGcs, 7, (6), 1935. C. Freeman (editor), Technical innovation and Long Waves rn World Economic Development (special issue of futures, 13, (4), 1981). E. Jantsch, Technological Forecasting rn Perspective (Paris, OECD, 1967). R. Amara and A. Lipinski, Business Planning for an Uncertain Future: (London, Scenarios and Strategies Pergamon, 1983). J. W. Forrester, lndustrral Dynamics (Cambridge, MA, USA, MIT Press, 1962). N. Maxwell, from Know/edge to Wisdom: a Revolution in the Aims and Methods of Science (London, Blackwell, 1984). A. Peccei, The Human Quality (London, Pergamon, 1977). M. Ways et al, The Future of Business: Global issues in the Eighties and Nineties (London, Pergamon, 1979). P. Teige, W. Harman and P. Schwartz, Research: New Directions futures MA, USA, Addison-Wesley, (Reading, 1977). P. Hawken, The Next fconomy (New York, Holt, Rinehart and Winston, 1983). 1. Robertson, The Sane Alternative (published by the author, 1978). A. Toffler, Future Shock (New York, Random House, 1970). M. MacDonald, ‘Corporate crash diet out of date’, Sunday Times, 4 May 1986. A. Huxley, Brave New World (London, Chatto and Windus, 1932). E. H. Nelson, ‘The consumer of the future’, lournal of the Market Research Society, 28,
(4). 25. R. M. Pirsig, Maintenance 1974).
Zen and the Art of Motorcycle (London, The Bodley Head,
AND THAT WAS THE FUTURE
Through
l
l
l
a glass darkly
The future
Denis Loveridge
Although the phrase think-tank is little more than 30 years old, the search for new opportunities in commerce and industry has been going on a long time. The rapid overseas expansion of European nations began with the maritime centre which Henry the Navigator established at Sagras in Portugal. Four centuries later other searchers after new areas of exploitation-Nasmyth, Bessemer, Stephenson-had immense effect on the growth of the new steam-powered industries and dependent businesses. And so it has gone on ever since-to the development of the new transistor in the Bell Laboratories in 1947, to Alistair Pilkington’s invention of float glass in 1952 and beyond. As Denis Loveridge shows in this article, these and many similar revolutionary inventions depend on personal endurance for their successful completion, while their widespread adoption has repercussions over many decades, making it imperative for industries to look ahead. Foresight in this context needs to adopt a wider view than simply that of technological optimism; what is needed is business built on the philosophy of wisdom, on the concept of value, which embraces the wider issues of business and creates achievable visions for its future.
The debate, and perhaps the battle, between the long and the short view in business is never-ending. There are protagonists for both views in the City and in industry. While it is true that the future can only be reached through the present, the shape of the future will differ significantly if it is approached through a series of short, halting and apparently random steps by comparison with the
Denis Loveridge is a Director of Pilkington Micro-electronics Limited, Prescot Road, St Helens, Merseyside WA10 3ll, UK. The views expressed in this article are those of the author and not necessarily those of Pilkington.
FUTURES
December 1988
brisker stride towards a longer-term vision. The importance of disciplined, long-term vision to the development of industry is a core concern for forecasters because the opportunity to contribute significantly to it represents their influence on future events. Formal forecasting has grown apace during the last 30 years as its path shows. Despite this, one of the core concerns, if not the concern for forecasters-the core remains value-largely question of neglected except by a few devotees. The power of the concept of value, of what people will value in their lives, is powerfully related to the success of products and services, but whilst the
680
And that was the future.
concept is the basis of much of the debate that follows it is too complex a concept to do more than refer to in this essay. Conjecture does not come easily to those whose daily concern is making something, whether it be products or money. Yet these same people depend on conjecture to conduct their daily business. Whether it be the question ‘Shall I win that order?’ or ‘What price will X’s shares be today?‘, uncertainty abounds, and though it is not removed it is resolved through conjecture. Many believe that the future can only evolve disjointedly, in short steps. In one sense that is true, but where do these disjointed steps lead? How can disjointed steps lead to vision? If the window is of obscured glass, who can see past the fragility of the present? Many attempts have been made to see through the heavily tinted glass of the immediate present to discern, however uncertainly, what lies beyond. Too often for businessmen the vision of what lies beyond the immediate present has been utopian and unbelievable. Connections with the present have been tenuous at the least, if not entirely absent. Utopian writing is in this sense what Alexander Haig characterized as ‘Vision without discipline . .‘; it is ‘. . . daydream’.’ Utopian writing has its place, and its impact on human development should not be underestimated. Many creative activities have an element of utopianism, while the more esoteric hypotheses of science often have a similar tinge in the early stages of their formulation. But for business, vision has to be more concrete than utopia, yet not so concrete as to be mundane, devoid of imagination and conjecture. In science and the sociopolitical sphere the longterm influence of conjecture begins to show itself most strongly as a precursor to future profits and as a limiting agency on unbridled exploitation in their pursuit. For most people in business the future is a matter of a few days or even a few hours. Perhaps rightly only a comparatively few people concern themselves with the longer-term trends that are being set by minute-by-minute transactions, whatever their nature. Even fewer people concern themselves with the possibilities the future might hold if certain events, for which precursors are known or can be identified, come into play. It is largely an attitude of mind; of whether the
future happens to you, in concrete form, day by day, or whether you shape the future for yourself and others by longrange actions. It is fortunate for everyone, from the short-term money maker to the scientist or inventor working at the limit of understanding, that there have been and always will be both people and organizations willing and able to dwell on matters that take many years, if not decades, to reach the full extent of their impact. The money makers of the world’s stock markets would have little to do but for the eventual widespread use (later called ‘innovation’) of the inventions of Alexander Graham Bell, Perkins (of aniline dye fame), Alfred Mond, Charles Babbage, and more recently Watson and Crick; Shockley, Bardeen, and Brattain; Kilby; von Neumann; Alistair Pilkington; Muller and Bednorz; and a host of other people in every walk of life. We cannot be certain that their thoughts were simultaneously directed towards some more distant goal which would ensure the creation of future profits for businesses well before they would be needed to satisfy the immediacy of stockholders, but that was the outcome. Satisfying
questions
of value
At its heart business depends on knowledge or, more cogently, wisdom for its very existence. Wisdom it is that asks the questions ‘What is of value to the human condition?‘, or ‘What do people value in their lives?’ Business exists solely in response to these questions, or should do so. Von Mises put this into context by stating that: ‘Economics is not about goods and services, it is about actions of living men.‘l Businesses then, must respond by providing what people value at a price that persuades the purchaser that he prefers ownership of the product or service to the money in his pocket. While business exists in response to the questions of value, how business responds is problematic in the extreme. What is of value to one person is not to another. What is of value to one group of people is inimitable to another. The variety is enormous in comparison to business’s capability to respond. How, then, has business anticipated or identified products and services that would soak up this enormous variety of expecta-
The beginnings
Inventions
of modern
research and a prototype of the Royal Society, imagined by Bacon in the New Atlantis of 1621
Solomon’s
House, as
attracted keen interest among 18th century printers who found lucrative markets in artists’ impressions
still a dream for engineers
In the 19th century Jules Verne showed already accomplished
what was An impression of what the Channel Tunnel would look like, about 1880
By the 20th century industry and planners have come together, as in the Pilkington redesigned Bond Street in the 1930s. Courtesy Pilkingtons
projection for a
and in another Pilkington projection for the planned city in the 1950s. Courtesy Pilkingtons
A high-speed
-----
and long-distance
-
communication
system proposed in the 1970s
r rC
--
_
--
And that was the future.
tions, some of which are conflicting and others mutually supporting, in its search to satisfy the questions of value? It needs to be said at once that many businesses do not attempt anticipation or identification of valued products and services; they imitate what other businesses have already attempted. The success of this strategy is clear from the number of occasions when the imitator has ended up dominating the particular market, at least for a time. Between 1945 and 1975 Japanese business adopted this strategy widely; but the Japanese are not alone-imitation is universal. For the imitator it matters little whether the glass in the window on the future is dark or totally opaque; his is not a view of the future. What is of value has been firmly established by others, in advance. The imitator’s task is to transform costly luxury of uncertain quality and reliability into mass satisfaction through widely dispersed ‘valued products’ at affordable cost, high and consistent quality and high reliability. He turns the world on its head. If the imitator causes a transformation of markets and production methods, then it is the inventor and innovator who, between them, first satisfy the question of value and create a market mechanism for disseminating that satisfaction increasingly widely, in this way making the future. While examples of the more or less heroic struggles by inventors and innovators to achieve their ambitions abound in the popular technical literature, there are also many similar examples in non-technical fields, including law and finance. These innovations (eg, product liability, health and safety) haveworked in powerful combination with technical innovation, sometimes helping and on other occasions placing impediments in the path of innovation, but always, either explicitly or tacitly, indicating a social response. to the question of value as applied to any product or service. Role and evolution
of forecasting
What role has forecasting played in helping businesses to develop visions of their future? Since 1945 businesses of all kinds have sought ways of identifying or anticipating opportunities for growth or threats to their existence. In the immediate post-war years the need for
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December 1988
685
such foresight seemed marginal; reconstruction and empty shelves made for a sellers’ market for a few short years. Now the situation is different. Even a cursory look through mail order catalogues of the early 1950s and those of today reveals staggering changes, not only in the range of products, but also in theglobal sources of supply. In the UK, use of the slogan ‘Made in Britain’ to define highly soughtafter products died many years ago. Could this have been prevented by dedication to foresight, to maintaining at the heart of business a dedication to looking beyond the immediate demands of investors and of the business itself? The need for foresight, to look well beyond immediate needs based on products of established value to those that are likely to become valued, has never been universally accepted; this is typical of the debate between the imitator and the innovator or the short-term financier and the innovator. Often foresight has been limited to more prosaic ends, such as indicating when production of a product should cease (this is hardly foresight if the determinant is unprofitable sales). In the anticipatory sense, where future profits are secured before the need for them arises, foresght has more often been practised by individuals than through any formal corporate process.
Era of grand
futurism
The 195Os, however, saw the emergence of technology forecasting from the enclaves of establishments such as the Rand Corporation and others. From these beginnings the ‘futures research’ fraternity grew during the 1960s and 1970s into a multiplicity of consultancies or company or academic think-tanks, with a wider remit than simply technology. Indeed the 1960s and 1970s were probably the halcyon years of technological forecasting and its later mutation into what became known as social or sociocultural or sociopolitical forecasting. None of these activities was new, but they had perhaps never before been put forward by so vociferous a group of people. Looking back this period is easily recognized as the era of ‘grand futurism’, not in the sense of the utopian societies portrayed in the first half of the century, though these continued to appear, but in the new
686
And
that
was the future.
sense of forecasting the future of the world’s society. The first landmark may well have been Kahn and Weiner’s The Year 2000 published in 1967.’ Kahn’s basic position was one of technological optimism, whoever his co-authors were. Rebuttals of more pessimistic publications came in forthright fashion. Targets were, for example, The Limits to Growth” and The Global 2000: a Report to the President.i By implication many other reports to the Club of Rome were seen by Kahn as But were they? The grand defeatist. modelling based fundaapproach, mentally on Forrester’s systems dynamics methodology, had never been tried before. Its sheer effrontery, to represent the world system as a set of equations, was enough to provoke emotive but often ill-informed argument. More thorough and more informed criticism came in the torm of Cole et al’s ThInking about the Future.6 Here the absence of economic mechanisms, of the political dimension and so on were pointed out. Remedies, partial or complete, for these deficiencies were soon forthcoming as more complex ‘world models’ appeared (eg, the SARUM model,: the work of Interfutures,” etc). At almost the opposite methodological pole the Brandt Commission, perhaps the grandest study of all, approached its task without an equation in sight and in both its major publications focused almost exclusively on socioeconomic/ the political dilemmas the world faced as seen at that time.” To most businesses these forecasts seemed remote and the conflict between the optimists and pessimists seemed perplexing. Return
of the long
cycle
In the early 1980s the grand study slowly disappeared from view as grand recession smote futures groups one after another until only a few survived. As the grand era for futurism died, an older mode of thought returned, based on the so-called long cycle of economic development, most often associated with the name Kondratieff.‘” The work by Freeman eta/” contains perhaps the best exposition of the relationship between invention and latter innovation-the technological being the process that business really backs-and the long cycle theory of
economic development. It examines at length the relationship between innovation and economic development. Contentious though the long cycle theory may be, there is evidence that surges in innovation, based particularly on enabling or generic inventions, do take place at intervals having some regularity. These surges seem to occur at 45-60 year intervals, to coincide with periods of economic stagnation and to be based on inventions that have occurred haphazardly in the decades preceding each surge. Many hypotheses have been put forward explaining the role these surges play in the economic upswing. Are they the cause or a symptom of economic resurgence? What is more certain is the revolutionary and all-pervasive nature of the inventions that fuel these bursts of innovation as they permeate all aspects of business, destroying and reshaping old businesses and creating the opportunities for many new ones. Methods of forecasting inventions and innovations proliferated during the 1950s and 1960s. No one was bold enough to label any of the many methods and processes scientific, though, as the definitive review by Jantsch made clear,lL a great deal of pseudoscience was applied, first in technological forecasting, and later in its extension to social forecasting. The forecasting methods themselves were variable in their success, which often depended cruciallyon the practitioner. In its heyday perhaps too much certainty, too much predictive clarity was expected of an exceedingly fuzzy and conjectural activity. Too often the uncertain and value-laden nature of history and its influence was misunderstood, while the even greater uncertainties, paradoxes and ambiguities surrounding events that have yet to happen, was overlooked. It has been demonstrated by Amara and Lipinski” how overconfident most acknowledged experts can be when asked to project their special knowledge into the future, producing too narrow a perspective of the possibilities for the future. The methods of forecasting certainly evolved throughout the two decades from 1960 to 1980; the spectrum ranged from the highlyquantitativeto theartistic. The most highly structured, excluding econometrics, was Forrester’s systems dynamics, with its emphasis on feedback
FUTURES
December 1988
And
loops, in the manner of control theory.14 From systems dynamics there was a steady progression to probabilistic modelling of various forms, culminating in decision analysis, as the wish explicitly to encompass uncertainty increased. Game theory and probabilistic and behavioural cross impact analysis created a bridge between objective and subjective probability, with the incorporation of judgments. Finally, the value-based spectrum was completed with the pure art form of scenario writing, an approach long favoured by military strategists. The rise of cheap computing power has, if anything, promoted a merging of these approaches, all of which have but one common aim, to explore future possibilities within the compass of known events or those that can reasonably be anticipated, be they social, technological, economic, ecological, political, or shifts in values. These methods are in effect tools for the examination of possible responses to the questions of value that beset business. The community of forecasters has been divided over the value of these methods; the protagonists of the highly numerate methods never quite seeing eye-to-eye with those who preferred the softer artistic methods. Business
response
How business has benefited from technological forecasting and its successors it is hard to say. Indeed, this subject would require a separate essay for its elucidation. Well authenticated examples, free of post hoc rationalization, are hard to come by. Too often business has been unable to reveal how particular inventions and innovations were made, owing to commercial pressures. By the time these pressures have passed many years have gone by. There is no doubt about the high level of activity directed towards project selection and other forms of management activity, relating to the management of research and development, and of innovation (as distinct from inventions). These activities are so common, and so basic that they are often not regarded as related to forecasting, but they are, since value judgments will be made concerning the relative merits of one development programme as opposed to another. The extent to which formal forecasting
FUTURES
December 1988
that
was the future.
687
methods of the kinds already outlined are used in making these judgments is uncertain, but the judgments will be based, implicitly or explicitly, on mental models or scenarios or conjectures about the likely outcomes. One thing is certain -the judgments are value-laden and not value-free; they depend on what Maxwell has described as the philosophy of wisdom and not the philosophy of knowledge, which proposes that knowledge is value-free.ri In a business or a group of businesses these judgments are a collective response to the question of ‘What is of value?’ (to the business or group of businesses), and implicit in these collective judgments is the belief that they are likely to satisfy individual responses to the question ‘What is of value?’ (to me) in large enough numbers to make the outcome profitable. What did business make of all the forecasting activity of the 1960s and 197Os? Probably not as much as it should have done. The perplexing conflict between optimists the and pessimists was Hegelian dialectic in character, but even now the creative synthesis from the opposing positions has not occurred. impending Warnings of change abounded-warnings of the possibility of climate change due to thermal, particulate and gaseous pollution interfering with the world’s atmospheric behaviour; of fuel and raw materials shortages. The latter should, and perhaps did, have an impact on business, as they were aided by direct happenings in the real world so that fuel utilization and the whole materials field has now changed out of all recognition. Indeed the likelihood of the world economy foundering through the exhaustion of raw materials now seems remote, thanks to many inventions and much innovation. The long dream of the ‘workerless factory’ nears reality. Perhaps the warnings implied by the long cycle theory were ignored most of all in a period when economic growth seemed to be on an ever upward path. At a different level whole new industries and dependent businesses have been created during the last 30 years. Electronics; nuclear power; synthetic fibres with undreamt of properties; ceramics that contain no silica; and an astonishing range of polymeric materials for a legion of uses-all have helped the
688
And
that was the future.
rise of a clutch of new industries. Similarly, international television and all its support services have come into being almost without being noticed, as has a whole new recorded music industry, based initially on the microgroove LP disc and the microstylus of the disc reproduction system and latterly on the digital compact disc; the list of changes and new businesses is in danger of becoming endless. While many of the themes of business are timeless, ways of conducting business that seemed almost immutable have changed too under the influence of electronic communication. The pace of moving funds and information around the world has changed out of all recognition, connecting the world’s financial centres together more directly than ever before, enabling changes in market conditions to be transmitted throughout the introducing in seconds and world virtually synchronous behaviour in the world’s markets. At this level of interconnection it was entirely predictable, from cybernetic theory, that instability would be brought to the world’s financial and stock markets. When these events will occur remains unforecastable, as the events of 19-20 October 1987 demonstrated only too clearly, since their precipitation depends on many thousands of individual changes in response to the question of value. Similarly, facsimile transmission makes telex look dated, only law preferring the latter for the time being. Both media seem likely to lose out to electronic mail eventually (electronic mail was torecast with great foresight by Vannevar Bush in 1945, nearly 30 years before the first experiments were made), while it is clear from the popularity of ATMs that freedom of access to money is highly valued! Philosophy
of wisdom
Yet for all these changes the future of business depends fundamentally on the philosophy of wisdom and businesses’ response to the question of what is of value to the human condition. In this context the passing of the era of grand futurism has left much thoughtful and thought-provoking material, arising from studies conducted, as all studies of the future must be, from a base of what was
known and events that were judged to be possible but highly uncertain at the time the studies were conducted. It was, by any standards, a productive period in which the question of value was raised time and again. The dialogue between the optimists and the pessimists was really an argument over the ability of humanity to control its environment with confidence in the certainty of outcome, to its lasting benefit. The technological optimists believed control to be possible, providing the means to support a world population of IO-12 billion people in relative affluence, and to do so within a century. Indeed, Kahn went so far as to contemplate a world average GNP per capita of $20000, some 20 times the comparable figure for 1986. In contrast the pessimists, as they were termed, were concerned that humanity had (and still has) little real understanding of how to intervene, with certainty of beneficial outcome, in a system as complex as the world’s socioec-osystem. The continuous flow of conjectures, refutations and counter-refutations that emerged from the opposing camps produced a stream of ideas from authors such as Peccei,‘” Max Ways and others;‘: Teige, Harman and Schwartz;” Hawken;“’ and Robertson;“’ these were but a few of the more philosophical outpourings of the time. Far from their ideas being remote problems, business has found itself enmeshed in all of them in one way or another, as it tries to decide what will be of value to the human condition and will at the same time create sufficient flow of cash to sustain the increasingly frequent demands for investment in new systems, new processes and a demand ultimately new products, brought about by the changing expectations of people who are asking ‘What will be of value to me’? It may be almost too simple to say that the dynamics of the international market place and its political dimensions now reach into the humblest of homes more than ever. Successive revolutions in transport and communication have changed people’s expectations of products and prices in ways that even 20 years ago were barely thought possible. Not only are many products now more comprehensive in their design and execution, they are made at better quality, and sell at prices
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689
And that was the future.
that are often significantly lower than their inferior predecessors. Cameras, washing machines, hi-fi equipment, computers, calculators, microwave cookers, telephones, watches and clocks all have these characteristics, while many other including video equipment, products, motor cycles and motor cars are heading in the same direction. It is probably outrageous to say that the non-essentials of life persistently become relatively less expensive, whereas the essentials (food, fuel, etc) become perversely more expensive. The steady cheapening of high quality manufactured goods stems from parallel changes in design methods and in manufacturing processes, and control of them, allied to ever widening markets as more products change from luxury to everyday use. The truly international nature of this enterprise, which has earlier been described as the role of the imitator, has been masked by the popular image of the Japanese as pastmasters of product and process improvement. Nevertheless it is not an exaggeration to say that each industrialized country has made a contribution to the advance of product and process improvement. Did technological forecasting and its successors fail to find winners for business in the period from the 1950s to the 197Os? If it did, are its present and future practitioners likely to do any better? Does business know what it expects of forecasters? The pursuit of winners does indeed seem to be futile if it is not conducted in accordance with the philosophy of wisdom, as Maxwell describes it. The question of value is paramount, but how often is it taken seriously, since it implies a mode of thought that conventional market goes beyond research and forecasting? For many businesses much activity is concerned with product extension, a modified form of imitation, through the stretching and nesting of existing product or service concepts. The truly new product or service, based on radical invention, is a relative rarity and its occurrence is highly unpredictable, save by a few especially knowledgeable people. The truly new is in most instances beyond the perception of forecasters except in some general and uncertain way, the often called ‘wild card’. The identification of issues that will
FUTURES
December 1988
have
major
different claim
impacts
matter;
on
here
considerable
ambitions
of forecasters
business
is
a
forecasters
can
success.
The
and business
are
in many senses diametrically opposedforecasters seeking to expose the trends and uncertainties that surround human actions, and business seeking certainty of outcome of actions directed towards securing profits. In the 1970s the pseudocertain world of the 1950s and 1960s collapsed, but perversely this also brought about the collapse of much forecasting activity at a time when business needed robust visions of its future, however dark the glass through which the future was seen may have been. Major change Looking both back into history and forward into the future it is hard to argue otherwise than that the world’s economy and industries are in the midst of a major period of change, foreseen in part by Toffler in 1970.L’ What is incontrovertible is the radical nature of the major generic technologies that are now reshaping manufacturing industry and business. Both history and present happenings point towards a revival of the world’s economy during the early to mid-1990s. Perhaps the greatest danger for business is that of ‘anorexia industrialosa’, not from the excessive desire to make a company leaner and fitter, but from the starvation of skills as demographic change bites. The seeds for this condition were planted in two ways in the late 1960s. First,
to quote
McDonald,22
the then current ‘whiz-kids’ were milking dry the brilliant endeavours of past generations of entrepreneurs, without any attempt to invest in new products (or processes and markets). Rationality to them meant only shortterm results and profits on a product-byproduct basis . Regard for competitive position, market shore, research and development . . seemed irrelevant . this approach, all in the name 7f rationality and prudent management, . . 1,.ore than any other, has caused Britain’s econwnic decline.
Today these same principles have reemerged to sow more deadly seeds for the future of unwary businesses in a world business environment more hostile than that of the late 1960s and early 1970s in which the all-pervading radical techno-
690
And
that
was the future
logical changes, and the Japanese determination to be itchiban (number one) in all of them is fearsome indeed. Second, the birth rate fell sharply from 1964 onwards throughout Europe and many OECD countries, indicating a major and global change in expectations, in what was seen to be ‘of value to me’ and also at the family level. The repercussions of this complex changewill influence industry in many and diverse ways for decades to come. Shifting
expectations
It would be easy to describe the business of the future in utopian terms involving a myriad of technological marvels reminiscent of Huxley’s Brave New World.” However near at hand the unmanned factory may be and however deeply information technology may penetrate the service sector, the question of value and Maxwell’s philosophy of wisdom needs to command increasing attention, as the discernment of the purchaser of products and services becomes ever sharper. Modern behavioural methodology indicates that major shifts in personal expectations, in what is valued, are in train; Nelson touches upon these, but the work she refers to is only the tip of an iceberg.14 Much social and behavioural information now exists indicating how consumer expectations and purchasing intentions are distributed, and how the patterns are changing. The continuing search for quality is a trend that business cannot afford to ignore-not so much the quality extolled by TV advertising nor by pundits such as Peters and Waterman, but a deeper quality which is the attribute of a product or service sought by Persig, a quality that addresses the question of value.L5 If the 1960s and 1970s were the age of geopolitics, then the foreseeable future will be the age of geo-economics. Indeed the impending opening of borders in Europe in 1992 is a response to this trend. Businesses have become global, reaching into homes and also affecting the environment in which we live in its many dimensions. Few businesses have yet recognized the responsibilities their global reach places upon them and because they act in a highly competitive world economy, there
appears to be little room for acting in ways that are ecologically and socially benign or enhancing. The appearance of the hole in the ozone layer in the upper atmosphere over the South Pole, the connection between smoking and health, the long-term nitrification of water supplies by nitrogen run off, the presence of PCB residues in many oceans are all the result of business activity. Conversely product liability, pollution control legislation and much other legislation are the social response to these trends. The time lag between the initiation of any trend and any form of social response is long, typically 10-20 years, unless it is provoked by some climactic event. History shows that neither business nor forecasters should expect too much of each other; as described earlier their purposes are often antithetical even when they are supposed to be working in unison. Both should cherish their combined successes, particularly when future human well-being and future profits are secured through foresight that leads to environmentally benign, socially enhancing business which yet results in products and services that anticipate what people will come to value so that their widespread adoption is self-assured. Penetrating the glass Vision and breadth can of depth penetrate the dark glass of the future, but only if it connects with the present can vision also make sense of the question of value. As with all matters relating to the future, the future of business is unknowable. Yet McDonald’s words have a ring of truth about them as the City talks increasingly of companies being attractive acquisitions for their ‘break-up’ value. In what endures and secures contrast, future profits takes a long time to create and requires boldness and endurance, set through a vision of what is achievable, which is not daydream and which addresses the question of value. The global businesses of the future already have these traits. They understand too that power comes from in-depth quality and excellence, as these are measures of an intended the ability to achieve outcome with the minimum of perverse and unintended associated outcomes. The shining vistas of the future portrayed
FUTURES
December 1988
And that was the future.
by utopian writing have their place, but business must concern itself with the philosophy of wisdom, with the question of value, if only because the less well off contribute more to profits than do the wealthy. To the poor, utopian vistas are daydream. Foresight is essential to the future of business. It helps to create the brisk and confident stride towards a strategic vision, and creates the endurance to reach it. Yet foresight can be made even more meaningful if its focus is on the question of value rather than on unconnected knowledge. Value is the cause of the integration of knowledge, leading to thecreation of businesses based on the philosophy of wisdom. However, forecasting and foresight only become effective
when
power
they
to bring
a strategic futurists must not the sole future.
are
associated
about
vision. remember possessors
Many
other
with
a direction
and
too that they are of insight people,
into
the
some
of
context, have produced visions of the future with uncanny perception of the directions in which the world’s society is moving. Humility-the Socratic perception that we do not know what is of value to the human condition-is essential; equally essential is the need for conjecture in the absence of knowledge for the continuing improvement of the human condition. The glass through which the future is seen may be dark, but it is not opaque. whom
are rarely
heard
8. 9.
10.
11.
12. 13.
of in this
14. 15.
16. 17.
18.
19.
References 1. A. Haig jr, Caveat (London, Weidenfeld and Nicholson, 1984). 2. L. von Mises, Human Action: a Treatise on Economics (Lake Bluff, IL, USA, Henrey Regnery, 1949). 3. H. Kahn and A. J. Wiener, The Year2000: a Framework for Speculation on the Next Thirty Three Years (New York, Macmillan, 1967). 4. D. Meadows et al, The Limits to Growth: a Report to the Club of Rome (New York, Earth Island, 1972). 5. G. 0. Barney et al, The Global2000 Report to the President: Entering the Twenty-first
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