Theory and practice in the field of foresight

Purpose – The paper aims to explore the gap between theory and practice in foresight and to give some suggestions on how to reduce it. Design/methodology/approach – Analysis of practical foresight activities and suggestions are based on a literature review, the author's own research and practice in the field of foresight and futures studies, and her participation in the work of a European project (COST A22). Findings – Two different types of practical foresight activities have developed. One of them, the practice of foresight of critical futures studies (FCFS) is an application of a theory of futures studies. The other, termed here as praxis foresight (PF), has no theoretical basis and responds directly to practical needs. At present a gap can be perceived between theory and practice. PF distinguishes itself from the practice and theory of FCFS and narrows the construction space of futures. Neither FCFS nor PF deals with content issues of the outer world. Reducing the gap depends on renewal of joint discourses and research about experience of different practical foresight activities and manageability of complex dynamics in foresight. Production and feedback of self-reflective and reflective foresight knowledge could improve theory and practice. Originality/value – Contemporary practical foresight activities are analysed and suggestions to reduce the gap are developed in the context of the linkage between theory and practice. This paper is thought provoking for futurists, foresight managers and university researchers

Strategic Foresight in multinational enterprises – a case study on the Deutsche Telekom Laboratories

Strategic Foresight activities enable companies to use weak signals to identify opportunities and threats. Research on Strategic Foresight proposes different methods, discusses their implementation and gives recommendations on how to link Strategic Foresight with other functions in an organization. Based on a literature review, we define a generic framework for the management of Strategic Foresight activities on the strategic, tactical and operational level and identify and discuss actors, methods and systems of Strategic Foresight. Building on an in-depth case study of the Deutsche Telekom Laboratories we shed light on the implementation of Strategic Foresight activities. In the discussion we focus on the interaction of methods from Consumer Foresight and Technology Intelligence. Taking an example project, we explore how Strategic Foresight is used on the operational level of innovation management. We conclude that Strategic Foresight can successfully contribute to coping with uncertainty and complexity and can feed the front-end of innovation from the market (customer needs) and technology (realization opportunities) perspective.strategic foresight; consumer foresight; technology foresight; technology intelligence; market foresight; trend analysis; future studies; future analysis; telecommunication industry

Benefits of Computer Based Content Analysis to Foresight

Purpose of the article: The present manuscript summarizes benefits of the use of computer-based content analysis in a generation phase of foresight initiatives. Possible advantages, disadvantages and limitations of the content analysis for the foresight projects are discussed as well. Methodology/methods: In order to specify the benefits and identify the limitations of the content analysis within the foresight, results of the generation phase of a particular foresight project performed without and subsequently with the use of computer based content analysis tool were compared by two proposed measurements. Scientific aim: The generation phase of the foresight is the most demanding part in terms of analysis duration, costs and resources due to a significant amount of reviewed text. In addition, the conclusions of the foresight evaluation are dependent on personal views and perceptions of the foresight analysts as the evaluation is based merely on reading. The content analysis may partially or even fully replace the reading and provide an important benchmark. Findings: The use of computer based content analysis tool significantly reduced time to conduct the foresight generation phase. The content analysis tool showed very similar results as compared to the evaluation performed by the standard reading. Only ten % of results were not revealed by the use of content analysis tool. On the other hand, several new topics were identified by means of content analysis tool that were missed by the reading. Conclusions: The results of two measurements should be subjected to further testing within more foresight projects to validate them. The computer based content analysis tool provides valuable benchmark to the foresight analysts and partially substitute the reading. However, a complete replacement of the reading is not recommended, as deep understanding to weak signals interpretation is essential for the foresight

The Foresight Bias in Monte-Carlo Pricing of Options with Early

In this paper we investigate the so called foresight bias that may appear in the Monte-Carlo pricing of Bermudan and compound options if the exercise criteria is calculated by the same Monte-Carlo simulation as the exercise values. The standard approach to remove the foresight bias is to use two independent Monte-Carlo simulations: One simulation is used to estimate the exercise criteria (as a function of some state variable), the other is used to calculate the exercise price based on this exercise criteria. We shall call this the numerical removal of the foresight bias. In this paper we give an exact definition of the foresight bias in closed form and show how to apply an analytical correction for the foresight bias. Our numerical results show that the analytical removal of the foresight bias gives similar results as the standard numerical removal of the foresight bias. The analytical correction allows for a simpler coding and faster pricing, compared to a numerical removal of the foresight bias. Our analysis may also be used as an indication of when to neglect the foresight bias removal altogether. While this is sometimes possible, neglecting foresight bias will break the possibility of parallelization of Monte-Carlo simulation and may be inadequate for Bermudan options with many exercise dates (for which the foresight bias may become a Bermudan option on the Monte-Carlo error) or for portfolios of Bermudan options (for which the foresight bias grows faster than the Monte-Carlo error). In addition to an analytical removal of the foresight bias we derive an analytical correction for the suboptimal exercise due to the uncertainty induced by the Monte-Carlo error. The combined correction for foresight bias (biased high) and suboptimal exercise (biased low) removed the systematic bias even for Monte-Carlo simulations with very small number of paths.Monte Carlo, Bermudan, Early Exercise, Regression, Least Square Approximation of Conditional Expectation, Least Square Monte Carlo, Longstaff-Schwartz, Perfect Foresight, Foresight Bias

Using urban foresight techniques in city visioning: lessons from the Reading 2050 vision

The emergence of urban (or city) foresight techniques focuses on the need to create coherent city visions to plan and manage for future long-term change and create opportunities for new investment into the local urban economy. This paper reviews the concepts of ‘co-created’ city visioning and urban foresight, setting this in the context of new and emerging practice and policy in the UK, and elsewhere. The paper critically reviews the development of the vision for a small city (the ‘Reading 2050’ project, linked to the UK Future of Cities Foresight Programme), and the lessons it holds for visioning, foresight and planning, using the ‘quadruple helix’ framework as a conceptual lens for analysis

Smoking Today and Stopping Tomorrow: A Limited Foresight Perspective

This paper considers an intertemporal decision problem in which the agent has limited foresight. It offers an interpretation of why people may smoke when they are young - and arguably have a short horizon of foresight – and refrain from smoking when they get older - and their foresight is better.

Constructing futures: a social constructionist perspective on foresight methodology

The aim of this paper is to demonstrate the relationship between a particular epistemological perspective and foresight methodology. We draw on a body of social theory concerned with the way that meaning is produced and assimilated by society; specifically, the social construction of knowledge, which is distinguished from its nearneighbour constructivism by its focus on inter-subjectivity. We show that social constructionism, at least in its weak form, seems to be implicit in many epistemological assumptions underlying futures studies. We identify a range of distinctive methodological features in foresight studies, such as time, descriptions of difference, participation and values, and examine these from a social constructionist perspective. It appears that social constructionism is highly resonant with the way in which knowledge of the future is produced and used. A social constructionism perspective enables a methodological reflection on how, with what legitimacy, and to what social good, knowledge is produced. Foresight that produces symbols without inter-subjective meaning neither anticipates, nor produces futures. Our conclusion is that foresight is both a social construction, and a mechanism for social construction. Methodologically, foresight projects should acknowledge the socially constructed nature of their process and outcomes as this will lead to greater rigour and legitimacy

Delphi Austria - An Example of Tailoring Foresight to the Needs of a Small Country

The world-wide diffusion and recognition of Technology Foresight suggests that it is of value for quite diverse types of economies and societies. Its merit as an important tool of strategic intelligence for policy-making also in small countries and transition economies depends on a careful tailoring to specific needs. Practice of Foresight is rather diverse also among small countries, but approaches tend to be more selective in scope, have more specific goals, and put greater emphasis on demand aspects than in bigger countries. Austria’s first systematic Foresight programme (completed in 1998) is an example of an innovative approach adapted to the needs of a small country. This contribution shows how Delphi Austria was tailored to a small economy which had undergone a successful catch-up process and how the Foresight process as well as its results have been utilised.Technology Foresight, Delphi method, small country, Austria, innovation, technology policy, implementation

Foresight in governments – practices and trends around the world

This study provides the initial results of a survey of foresight activities undertaken by a select group of governments around the world.The study was begun following the recent initiative by European Union (EU) in- stitutions to build a joint foresight capacity (European Strategy and Policy Analysis System – ESPAS) that assesses long-term global trends to help them strengthen policy planning. In addition to contributing to the discussion about this new EU activity, the study is also intended to be of interest for the wider European policy planning community and to anyone interested in learning about how governments practise ‘the art of the long view’ (Schwartz, 1991).This study looks at the way governments approach foresight, the issues they try to grapple with and the challenges they face in connecting foresight and policy. Its focus is on foresight exercises that look ten years or more into the future. The study does not include within its scope foresight activities undertaken at the initiative of business, academic or non-governmental organisations, though some government-led activities do involve these other actors.Foresight work includes a range of activities related to the production of knowledge about possible futures. This knowledge is not of the future, nor any real future, but rather ‘the manufactured knowledge of [a] restricted number of possibilities’ (Sardar, 2010). The output of foresight work very often involves the creation of scenarios for the future which can be analysed for their likelihood and potential impact. Foresight also commonly uses practices such as ‘trend impact analysis’, ‘horizon scanning’, or the Delphi method.This study presents an initial tour d’horizon of a limited number of countries who undertake foresight activities: Australia, Brazil, Canada, China, Finland, France, Germany, India, Indonesia, Italy, Japan, Mexico, the Netherlands, Norway, Russia, Singapore, South Africa, South Korea, Sweden, Switzerland, the United Kingdom (UK) and the United States (US). The countries were chosen to represent a diverse selection of countries based on location, economic profile, power status and political regime. The analysis is based on desk research and interviews conducted with professionals in government, academia and think tanks. This study also looked at the foresight activities of a range of international organisations with mandates for public service and which interact with governments as sources of knowledge and policy advice. As foresight activity tends to be scattered across departments and not always made public, it was not possible to be exhaustive in our analysis of the countries in this study. Time constraints and language barriers may also have affected the outcome of the study.The first part of the study identifies the main issues that governments grapple with and offers a preliminary historical overview to shed light on current practice. The second part compares the approaches to foresight taken by governments and the institutional setting for foresight activities. The third part tries to assess the conditions for fruitful foresight