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 companies apply for loan guarantees.
- That the bank 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.
We have been working on a research program designed to identify the requirements for successful foresight programs. We did a study on this question two years ago by interviewing the directors of the top foresight programs in the world. Last year, we gave the list of these success factors to a roundtable of foresight program directors that had gathered in the United Kingdom. The list starts with an assumption that your foresight program has used the appropriate methodologies. This is what we learned from the successful units.
Focus(es) on a clearly identified client:
Successful functions were housed within a ministry responsible for innovation. In Ireland this was the Industry Ministry while in Thailand it is the National Science and Technology Development Agency (NSTDA). In Finland, the Parliamentary Committee on the Future is supported by a national fund for R&D (SITRA- government investment, augmented by a significant Nokia share sale in the 1990s) as well as by government science and technology focused agencies such as the TEKES, VTT, (Ministry of Trade and Industry) and the Academy of Finland, part of the Ministry of Education. Not only were they housed within the correct ministry, this was identified as the primary client for the foresight results.
Clear link between foresight and today’s policy agenda:
A key requirement is to develop foresight capacity amongst senior decision makers so that they can integrate the important tools of technology foresight into advice to government. The UK seems to have developed this capacity the most where the Science Advisor has repeatedly been able to engage key ministries as joint sponsors and receptors for the results. However all interviewees talked about the link between what they were doing (foresight exercises) and actual policy.
Direct links to senior policy makers:
To have a better understanding of policy needs, to get much needed budgetary resources and so forth, the foresight capacity and stakeholder organizations must be linked with and provide regular briefings to senior policy makers. This also helps in getting recommendations implemented. Many reported that this was either a normal practice or an ongoing challenge and that indicated progress was being made. A recent Canadian foresight project had over a dozen Deputy Ministers and Assistant Deputy Ministers as sponsors and mentors for the project. It’s no wonder that the projects results are being integrated into new policy and programs.
Most program experts extolled the good relationships they had developed with industry leaders, advanced technology firms or private sector advisors connected in some way to the national policy agenda and/or senior decision makers. The actual form of the linkage varied from collaborative to cooperative to consultative, but the clear message was that a successful foresight had to connect in some meaningful manner to private sector actors. Foresight must be outside in, that is starting with the private sector perspective and translating it to government requirements. After all, the policy being developed is designed to impact the external environment.
Develops and employs methodologies and skills that are not always used in other departments:
For example, Forfas came into being to address a government gap – i.e. there was a recognized need to use new and more forward looking approaches to help in policy setting. Thus, they brought to the table intelligence and foresight methodologies. APEC CTF in Thailand has had its strategy planning and scenario approaches used by their host department to help the Government itself establish its longer term strategies. In all cases, the new function was bringing much needed methodologies that had previously not been fully exploited within the mainstream Departments of the government.
Clear communication strategy:
A strategy is needed that serves to keep key stakeholders aware of ongoing projects and activities. Excellent foresight is both time sensitive and attractive to those motivated to detect change ahead of its appearance-hence it has significant media value and communications reach – but also must be well described so the context of change, including both its challenges and opportunities, can be appreciated. All of the Agencies ontacted realized how critical this aspect of forward readiness has become. There was a range of creative communication approaches ranging from newsletters and websites devoted to key stakeholders to an approach of getting in the elevator with key decision makers to give them 60-second elevator speeches.
Integration of stakeholders into programs:
The agencies investigated all made use of key stakeholders in processes such as project selection, information gathering and assessment, and provision of key recommendations. This factor while obvious has not always been easy to fully accomplish, and so many experts indicated that this presented constant hurdles to creating the levels of appreciation and support necessary to assure strong policy impacts.
Furthermore, many indicated that it was necessary to retain these involvements beyond the period of the actual projects or initial foresight program – because they were an important part of validating the value of foresight to new clients and new topic areas.
Existence of a national-local academic receptor and training capacity:
A clear need at the start is a national-local academic receptor capability for foresight skills and training – hiring from abroad is fine for the start up phase, but participants consistently stated that one needs a local sounding board that can be aligned with the policy needs- capacities, through providing training, intelligence and policy ideas relevant to future challenges; (PREST-MIoIR as an example). Academics that can connect with stakeholders, provide legitimacy and know the methodology are a distinctive asset, and they provide a steady source of new ideas, intelligence and international foresight connections. These skills are needed to build a country’s foresight literacy and includes training decision makers to understand the importance and use of foresight.
Our involvement in Malaysia’s foresight is limited. We have provided training to personnel from various departments as well as reviewed foresight project plans. It is based on these limited views that our preliminary opinions are formed. Using the previous critical success factor framework as the analytical methodology, we have identified several strengths in the Malaysian foresight program and a few areas that need to be worked on.
We were impressed by how attune the Malaysian government is to the concept of forward looking policy. This is evidenced by recent developments in Malaysia. Having the unit housed in MOSTI makes sense as it is responsible for providing innovation and science-based advice. By looking at the projects currently under way, there is no question that foresight in Malaysia is focused on the government priorities. We also saw a commitment to developing methodology and skills not in evidence at other departments. In fact, while we were providing our initial training for MiGHT, SIRIM and MOSTI, we noted that they were also getting training in scenario analysis, a very important foresight method. Further, the Department had sponsored a foresight conference in the previous year that focused on developing foresight skills.
The weaknesses: Rather than highlight the weaknesses directly, we instead choose to offer a few carefully chosen recommendations designed to enhance Malaysia’s foresight capacity.
1 Integrate other government departments, private sector and academia in each foresight project. Today’s policy issues are too complex to have foresight only generated within the framework of only one department. We would like to see more stakeholders being brought into the foresight process.
2 Bring foresight to the senior management level. In companies and top government agencies, foresight reports to Presidents, Ministers, Deputy Ministers or vice presidents. Make sure that there is a direct link between foresight and senior decision makers.
3 Make sure you have a relevant time frame for foresight. While the government talks about 20-year time horizons, it appears to us that policy making around foresight results is but a 2-year horizon. While some foresight can be short term oriented, some must — by definition — focus on laying in the decisions today which will not bear results for 10+ years.
4 Increase foresight literacy amongst senior managers. To help foresight grow will require acceptance and understanding from key ministers. In Canada, each Deputy Minister has been challenged to develop forward- looking policy using the tools we have talked about in this paper.
5 Enhance the countries foresight capacity. It would be useful to sponsor the development of University curriculum in this area. This is how China and the United States has been growing capacity.
6 Take advantage of unique collection opportunities such as conferences, workshops and tradeshows. The personnel at our our training programs attend a significant number of events. Yet, there appears to be no coordinated collection plan for these events. Several foreign countries use these events to collect the information needed for foresight and intelligence initiatives and we strongly encourage Malaysia to similarly embark on an event intelligence program.
We look forward to sharing more of our insights with Malaysia in the years to come. Yours is a wonderful country with much potential. We are amazed with your innate competitive advantages including geographic and cultural proximity to key markets, resource strength and knowledge base. Foresight provides an important tool for using this potential.