Scenarios and Simulations

Scenarios
The scenario is a narrative forecast that describes a potential course of
events. A scenario recognizes the interrelationships of system components. The
scenario describes the impact on the other components and the system as a whole.
It is a "script" for defining the particulars of an uncertain future.
Scenarios consider events such as new technology, population shifts, and
changing consumer preferences. Scenarios are written as long-term predictions of
the future. A most likely scenario is usually written, along with at least one
optimistic and one pessimistic scenario. The primary purpose of a scenario is to
provoke thinking of decision makers who can then posture themselves for the
fulfillment of the scenario(s). The three scenarios force decision makers to ask: 1)
Can we survive the pessimistic scenario, 2) Are we happy with the most likely
scenario, and 3) Are we ready to take advantage of the optimistic scenario?

an account or synopsis of a possible course of action or events

Tools for understanding the complex interaction of a variety of force that
come together to create an uncertain future
Stories about alternative futures focused on the forecasting problem at hand
First used at the RAND Corporation in the early days of the cold war, led by
Herman Kahn
HERMAN KAHN
founded Hudson Institute, pioneered their implementation as he thought
through the logic of nuclear deterrence
authored the book, the Thermonuclear War, first published applications of
rigorous scenario planning
Thinking About the Unthinkable, follow-up book, suggests the method of
forcing oneself to think through alternative possibilities, even those which
at first seems unthinkable

USES OF SCENARIOS IN TECHNOLOGY FORECASTING

Using scenarios to anticipate development paths

o Entails a study of the fundamental science or engineering and its
evolution
o the tools needed to develop the technology
o the applications that will drive its economics
i.e. the forecast of the future of a semiconductor while the technology was in
its infancy required an understanding of solid state physics, silicon
manufacturing, and the need for small guidance systems on U.S. missiles, all
of which were critical to the early days of microchip.

Backcasting

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o
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Planners envision various future scenarios and then go back to explore

the paths that could lead them there from the present
Starts with a projection of the future then works back to present
To identify signpost or tipping points that might serve as leading
indicators

Steps in Forecasting centering on Backcasting

1. Understanding the concerns of stakeholders and casting those concerns in
the context of alternative futures.
2. Scenarios could then be envisioned that describe what the world would look
like then.
3. Forecasters would then work backward to the present and generate a
roadmap for the future scenario.

Simulations
Used to generate and test scenarios
Also used to test new technologies and applications to better understand how
they might change military strategy and tactics
War games
o useful tools when human judgement plays an important role in how a
technology is deployed
o Test an engineered or technological capability that is then tested
against the response of various actors who are actually played by live
people and interact with one another

Other Modern Forecasting Techniques

Prediction Markets

Involve treating the predictions about an event or parameter as assets to be

traded on a virtual market that can be assessed by a number of individuals.
Use a structured approach to aggregate a large number of individual
predictions and opinions about the future

Alternate Reality Games

Individuals, small groups, or massive numbers of players engage in a

hypothetical worlds.
Used to test possibilities that do not yet exist.
i.e. World Without Oil, simulation run by Institute for the Future (IFTF)
combines scenarios, war games and computer simulations in one integrated
approach
enhance a forecast by revealing the impact of potential alternative future
scenarios through game play and role playing

Online Forecasting Communities

makes possible by the use of internet, where online communities were

created engaging in a continuous forecasting activities
Techcast, a successful online forecasting community that has been online
since 1998

Obsolescence Forecasting

Considered a form of backcasting

Scenario intruded on by obsolescing technology

Time Frame for Technology Forecasts

Understanding the importance of the time frame for a forecast will increase
the rate of success of the forecast. The time frame for a forecast depends on the
type of the technology as well as on the planning horizon of the decision maker.

Short Term
Forecasts that focus on the near future or within 5 years of the present
to gain an understanding of the immediate world.

Medium Term
Forecasts for the immediate future typically range from 5 to 10 years
of the present and can be characterized using a fairly well understood
knowledge base of technology trends, environmental conditions and
competitive environments.

Long term
Forecasts of the deep future which pertains to the great uncertainty in
how current visions, signpost, and events will evolve and the likelihood of
unforeseen advances in technology and its applications.