BY Jonathan Calof & Jack Smith

“Foresight is a set of strategic tools that support government and industry decisions with adequate lead time for societal preparation and strategic response by assessing the external environment.” (Smith and Calof, 2010).

Why foresight? A government’s or a company’s success depends on factors that are outside their direct control. For example, as a government, Malaysia could look at developing a program designed to encourage the development and growth of nanotechnology companies (similar to what Russia is doing). Among the instruments of this program could be a loan guarantee or other financial instruments. The intent of the policy would be to create and support a viable and successful nanotechnology sector. While the government can certainly create the program and provide the loan guarantees, success hinges on a few factors beyond a government’s control:

• The actual nanotechnology industry globally being a profitable/attractive one. If the industry becomes unattractive, Malaysian companies may not do well in it.
• Malaysian companies developing appropriate innovative products/services that would require loan guarantees. That the companies apply for loan guarantees.
• That the banks accept proposals with loan guarantees.

If any one of these four does not occur, then the program will fail – and the government will not control directly any of these prerequisites. So they need tools that will enable them to understand these four elements and their associated drivers.

Foresight is a tool to help understand these elements of the external environment. In fact with proper understanding, programs can be designed that would address these concerns. For example, scenario analysis would help the government identify key drivers for nanotechnology over the next 20 years, thereby pointing the way to more attractive areas to focus the policy on. Perhaps given Malaysia’s strengths, the focus should be on materials nanotechnology? Maybe it should be on health-related nanotechnology? There are many different areas in nanotechnology that could be focused on and as a country you do need to focus. Foresight looks long term, recognizing that for the Malaysian nanotechnology industry to grow and thrive requires looking not at today’s markets but tomorrows as it will take time to do the research, design the products, build the capacity. Russia’s time frame for their nanotechnology policy was 20 years. We get industry ready for the environment of tomorrow, not the environment of today.

Foresight and its sister field, competitive intelligence also recognizes the need to better understand the specific “players” in the environment. This is a more short term focus than classic foresight but is generally more in depth. So, for the nanotechnology program, the intelligence component would be to profile the banks to see what type of guarantee would encourage them to accept nanotechnology proposals. For the company, it would be profiles to see what technologies are competitive, whether companies would be willing to be participants in the program, and so forth.

Canada set up a technology intelligence unit within the National Research Council to assist these types of enquiries. So by use of foresight and competitive intelligence, a nanotechnology program would be designed that in understanding the drivers of how the banks and companies operate (competitive intelligence) and where technology is going (competitive intelligence and foresight), sets out a program of financing and research that positions Malaysia for the future of the industry (foresight).

For a program or strategy to succeed therefore requires not only a fundamental understanding of the forces that can affect it, but also what are likely to be the most uncertain aspects of these forces and how they might change the game . If you are a company this means understanding the likely reactions of customers, competitors, governments and regulators for example. If you are a government, it is about understanding how the intended audience of the policy will react.

Foresight and competitive intelligence, are both fields that focus on providing depth of insight and a forward orientation – key attributes required to deal with this dilemma. These fields use a variety of profiling and environmental assessment techniques to understand companies, markets, technology trends etc. They have proven to be very useful for providing the insight required to understand these external forces. Policy which is based on analysis of the environment of today will rarely succeed unless the environment of tomorrow is identical to it. Policy which is not based on analysis of the players that it is intended to impact can also not succeed.

Foresight has been used by organizations to
provide numerous benefits to decision makers
and stakeholders to:

• Reveal prospective new issues,
  challenges-threats, stakeholders, or shifts inalignments of influential players;
• Identify needs for new skills, knowledge
  and capabilities;
• Highlight new, weak signals that can
  become pivotal in the future, and signal
  potentially disruptive surprises, emerging technologies that will be critical for the organization’s future;
• Demonstrate current regulatory
  weaknesses – zones where failure to
  prepare can bring severe consequences;
• Determine S&T, R&D priorities, strategic
  technology investment domains and
  critical sectors;
• Expose the limits of current policies and
  gaps that should be filled;
• Deliver intelligence on emerging business and market opportunities, new foreign strengths and players;
• Provide alerts about threats, complex
  situations and organizational
  vulnerabilities – allowing time to adapt

In short, foresight contributes to better decisions, more robust policies, precision in research choices and insightful analysis. Further, as we have noted, many of the most prosperous countries in the world have used
foresight as a tool to enhance their policy making.

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