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Why has foresight become important?

Global driving forces and the challenges for technology policy

The development of foresight has occurred as a response to changes that have taken place in the world economy. Some of the main drivers of change in the global economy over coming decades (Martin, 2001) are:

• Increasing competition.
• Increasing constraints on public expenditure.
• Increasing complexity.
• Increasing importance of scientific and technological competencies.

These factors also underlie the upsurge of interest in foresight, giving rise to its emergence as a global concept and policy tool.

Increasing competition

There is widespread recognition that we live in an increasingly competitive world. Over the last 10 years or so, many more market-economy “players” have emerged in Asia, in Central and Eastern Europe, in Latin America and elsewhere. This has greatly increased the level of economic competition between countries as well as companies. At the same time, we are witnessing huge (and perhaps historically unprecedented) variations in labor costs (e.g. by a factor of 100 or more between Germany and China). These are occurring at a time when companies can much more easily shift resources and production between countries to benefit from lower costs or other advantageous local resources. For the richer and more industrialized countries, the key to success lies in continuous innovation to achieve ever-higher productivity and thus enhanced competitiveness.

In this era of competition and increasingly rapid change, new technology is playing a growing role in relation to economic and social development. As we move towards the knowledge-based economy, industrial competitiveness is coming to depend to a greater degree on new technologies and innovation. However, emerging technologies and the strategic research which underpins them are often too far removed from the market, too risky or too expensive for industry to take sole responsibility for their support. Governments must assume at least part of the financial responsibility. Yet governments cannot afford to fund all areas of research and technology which their scientists or industrialists would like them to support. Choices have to be made, and technology foresight offers a process to help make those choices.

There is increasing concern about the interaction between economic competitiveness and a number of social factors such as unemployment and working conditions, inequality and social cohesion, environment and sustainability, and new risks (those associated with the introduction of new technologies) and their distribution across different sectors of society compared with the distribution of benefits. There is therefore a need for new national S&T policies that balance competitiveness against unemployment, inequality, sustainability, risk and so on. This requires new policy tools such as technology foresight.

Increasing constraints on public expenditure

Governments in many countries, have been experiencing significant public expenditure constraints because of the need to balance their budgets (for example, to meet the Maastricht criteria for European monetary union). Those constraints are likely to grow over time for a number of reasons, including demography and the ageing population, and the increasing costs of-and rising expectations concerning-health care, education and social welfare. Another possible factor is that we may have reached the politically acceptable limits to tax-raising; if a government attempts to extract taxes above a certain level, companies or more affluent individuals may take their business off-shore to a country where the tax system is not so burdensome, something that has been made much easier by new technology and the growing use of electronic transactions.

These constraints on public spending will result in increasing demands for greater accountability and for better “value for money” from all areas of government spending. In the case of research and technology, this requires new policy tools, along with a better justification for government funding of research and technology. We also need policies to develop technologies to deliver health care, education and social welfare more effectively.

Because of these trends and the escalating cost of research and technological development, no government can afford to do everything in research and technology, not even the richest. Governments now realize that they must be more selective-they must have explicit policies and clearer priorities for research and technology. Choices have to be made. In the past those choices tended to be made tacitly-they just “emerged” from the policy process. The question now is whether we should continue with this approach, or whether we should attempt to devise a more systematic procedure for priority setting in relation to technology and research. Foresight offers a tool (but not a panacea) for helping to identify those priorities.

Increasing complexity

The trend towards growing complexity is driven by greater coupling and closer interactions of systems of a variety of forms, including interactions between:

• Local, national, regional and global systems-for example, between national systems and the European Union, and between each of these and world bodies such as the World Trade Organization (WTO).

• Research and Technology, on the one hand, and the economy, politics, culture and environment on the other (as described above under “increasing competition”).

• Public and private sectors in such areas as health care and transport.

• Different technologies-here, Kodama’s notion of “technology fusion” (1992) is particularly important. Often the most important radical innovations arise when two or more previously separate streams of technology come together and “fuse”.

• Different producers of knowledge-according to the thesis of Gibbons et. al. (1994) in the so-called “Mode 2” form of knowledge production (characterized by its application-orientation and growing trans-disciplinarity), a far wider range of knowledge producers is involved and there is considerable blurring of the institutional boundaries between them (e.g. between the industrial and university sectors) (Gibbsons et. al., 1994).

As a result of these growing interactions between systems of different forms, there is a need for the following:

• A better understanding of complex systems.
• Flexible policies, responses and systems.
• Policy tools linking different partners and their needs, values and so on.
• Increased and more effective networks, partnerships and collaboration.
• A clear division of responsibility between national, regional and global bodies and their respective policies.

TF provides a process for addressing several of these issues in a systematic, open and collaborative manner.

Increasing importance of scientific and technological competencies

The final point in the list of key drivers of change in the global economy is the increasing importance of scientific and technological competencies. Here, one can distinguish between knowledge and skills. As argued above, scientific and technological knowledge is becoming a strategic resource for companies and countries. It is also increasingly vital to improving the quality of life. As many science policy studies have demonstrated, at least as important as codified knowledge (encapsulated in textbooks, scientific papers, patents etc.) is tacit knowledge. Such tacit knowledge is not easily transferred: generally it requires people or organizations to be brought together, ideally with individuals working together at the same location for a period of time. Again, TF can forge the connections that help bring this about.

Scientific and technological skills or expertise are also becoming ever more important in relation to wealth creation and improvements in the quality of life. Here, matters are complicated by the fact that new technologies not only demand new skills, they also make old skills obsolete (arguably, at an increasing rate). This points to the need for continuous learning, both at the level of the individual (with a shift away from the notion that the individual is educated only in the first 20 years or so of life to one of “lifetime learning”, a shift in which new technologies can make a major contribution), and at the organizational level (with the creation of the “learning organization”). In addition, because of the growing complexity and interaction of systems described above, we need new generic or system-wide skills-skills such as interdisciplinary approaches, team-working, networking and collaborating, all of which can be fostered or exchanged through the TF process.

The changing social contract between science and technology (S&T) and society

What the above factors may be producing is a shift in the “social contract” between S&T, on the one hand, and the State or government, on the other. In the 40 years after the end of the Second World War, the “science-push” model exerted a dominant influence on funding policy for research. According to this model, advances in basic research give rise to opportunities in applied research, which, in turn, make possible the development of new technologies and innovations. Society therefore, supported basic research in the expectation that it would ultimately generate benefits in the form of wealth, health and national security, but governments were fairly relaxed about exactly what form those benefits might take and when they might occur. Now, faced with increasing industrial competition, tighter financial constraints and demands for accountability, governments are expecting more specific benefits in return for continued investments in research. Foresight represents one way of linking the interests of the scientific community in pursuing the most promising research opportunities with the needs of industry and society in relation to new technology and innovation.

This leads to another reason why governments have become involved in foresight namely, that the successful use and exploitation of S&T depends increasingly on the creation of effective networks between industry, universities and government research laboratories. Foresight can help to establish and strengthen those links. As is argued later, this might be seen as part of the process of “wiring up” the national or regional innovation system so that it can learn and innovate more effectively.

Some further reasons for the increasing popularity of foresight

It is perhaps worth saying a few words about systems of innovation before presenting the arguments associated with foresight’s systemic benefits. The concept of systems of innovation has proved popular with academics and national policy-makers alike over the past decade, and is now also being picked up by regional and sectoral players. Rather than focusing upon the constituent actors within the system, the strength of the national systems of innovation (NSI) approach is said to lay its emphasis upon the relationships and linkages between the actors. If we accept the Mode 2 thesis, this emphasis on linkages and networks is important. Thus, an NSI marked by actors that are not “particularly strong, but where the links between them are well developed, may operate more effectively (in terms of learning and in generating innovations) than another system in which the actors are stronger but the links between them are weak” (Martin, 2001).

This brings us to perhaps the most commonly cited rationale for TF today-that of correcting “system failures”. The foresight process itself is said to enhance communication between actors within a system, providing a means of coordination and generating commitment to action. As Martin and Johnston (1999) contend, “Technology foresight offers a means of ’wiring up’ and strengthening the connections within the national innovation system so that knowledge can flow more freely among the constituent actors, and the system as a whole can become more effective at learning and innovating.”

Knowledge flows and system-wide learning are important to emphasize here. For instance, knowledge of other actors’ strategies and positioning vis-a-vis a given issue (e.g. through foresight) can reduce uncertainties, thereby enhancing a system’s innovative capacity. The potential for system-wide learning, which is also said to enhance a system’s capacity for innovating, is related to the level of interdependence between the various system actors. The degree of interdependence is, in turn, dependent upon processes that stimulate, nurture, encourage, and strengthen interactions between actors so that they become more permanent-processes such as TF (Martin, 2001).

Other drivers can also explain the wide adoption of foresight:

Emergence of new styles of policy-making-it could be argued that the 1990s have witnessed the emergence of a new, more inclusive style of policy-making, partly in an effort to bridge the perceived “implementation gaps” associated with previous era policy interventions. This development is also being driven by a growing realization that, as the world grows more dynamically complex, it is impossible for any one organization to know everything that is needed for successful policy intervention. In other words, many governments have recognized that the requisite knowledge for successful policy intervention is distributed across a wide and varied landscape of actors, and that this landscape has a role to play in policy formulation and implementation. This is sometimes described as a shift from top-down government to a more distributed “governance” model. Foresight exercises, with their inclusiveness and emphasis on processes, would seem to be part of this shifting trend.

Increasing desire for anticipatory intelligence-an oft-cited rationale for conducting foresight, especially at the sectoral and regional levels, concerns the development of anticipatory intelligence amongst system actors. This is a common rationale found in foresight exercises associated with industry cluster development, or with the competitiveness of Small and Medium sized Enterprises (SMEs), though it tends to be implicitly assumed in virtually all foresight exercises. It refers to the objective of widening perspectives, both spatially (e.g. to cover unexplored domain areas, untapped potential markets, etc.) and temporally (e.g. to encourage longer-term thinking than might normally be the case). These new perspectives offer insights into possible opportunities and threats that might otherwise remain invisible. Armed with this strategic knowledge, system actors, be they companies, or policy makers, or others, are believed to be better placed to implement flexible and robust strategies that have the responsiveness and agility to deal with multiple futures. In other words, and to use the common jargon, foresight allows companies and bureaucrats to be better “future-proofed” against a whole range of future eventualities.

Building advocacy coalitions-an often overlooked but increasingly important rationale for conducting foresight is its ability to mobilize disparate groups of actors around a particular vision. For example, if a particular issue is believed already to be strategically important, foresight can be used not only to raise awareness of its importance, but also to mobilize the key stakeholders into taking strategic collective action. Collectivity is important here-to be taken seriously and to attract resources, actors usually need to coalesce within more or less organized coalitions in order to better argue for (or advocate) support of their particular area. Indeed, as history has demonstrated time and again, those who are organized tend to rule, whilst those who are disorganized tend to be ruled. With this in mind, foresight is often used to organize advocacy coalitions around issues of particular strategic importance, since such groupings are better placed to enact strategic change than the lone academic, entrepreneur, or bureaucrat. In some instances, foresight has even been used in this way to broaden the coalition of interests that advocate a central role for research and innovation in the wider political-economy.

Bandwagon erects-as one country has undertaken a foresight exercise, “competitor” countries have felt the need to follow suit. The same phenomenon can be seen in sub-national regions. Foresight “promoters” have told good stories and these have proven to be irresistible to those who do not want to be “left behind”. In addition, the activities of international organizations, such as UNIDO (e.g. in Latin America and the former Soviet Republics) and the EU (e.g. in Eastern Europe), have played no small part in this diffusion process.

The “Millennium effect”-governments all over the world have sought at least to appear to be preparing for the new opportunities and challenges that lie ahead in the twenty-first century. This could explain an explosion in futures-type studies in the run up to the new Millennium but probably cannot fully account for foresight’s continuing popularity in the post-Millennium era.

Notes:

UNIDO Technology Foresight Manual, Organization and Methods, Vol. 1, Vienna, 2005, p. 19-24