Strategy Survival Guide

Strengths
• Quantitative forecasts are usually more objective, relatively inexpensive and easy to use (contingent
upon some knowledge of statistics).
• Qualitative forecasts can be valuable predictors of new trends, by using the creativity and good
judgement of experts.
Weaknesses
• Quantitative forecasts can be misleading. The past is not always predictive of the future. Such
forecasts do not take into account unpredictable changes or discoveries (e.g. discovery of new
natural resources) or 'wild cards’ (e.g. unexpected acts of terrorism).
• When using qualitative techniques to identify possible new trends it will always be the case that
some, or maybe even all of the results are eventually disproved. It is particularly difficult to
distinguish between short term 'fads’ and long term trends.
References
The Strategy Unit report A Futurist's toolbox sets out the basic steps for carrying out forecasting analysis.
The report summarises the six key methodologies for futures work, covering most of the commonly used
tools by professional futurists. Some of the elements of the report are outlined below.
Short Survey of Published Material on Key UK Trends 2001-2011 This report was undertaken by the
Strategy Unit with the Defence Science and Technology Laboratory (DSTL) to synthesise existing
predictions on trends in several sectors including: the economy; demographics; the environment; housing;
and, health. The data is broken down by time into a period of relative certainty (2001-2006) and a period of
lower certainty (2006-2011).
Strategic Futures Thinking: meta analysis of published material on Drivers and Trends. This was
another report produced in conjunction with the Defence Science and Technology Laboratory (DSTL). The
report examines published literature on key futures issues. It identifies six key drivers of change;
demographics, economics, science and technology, environment, governance and attitudes and beliefs. It is
also a useful source document for other materials.
The OECD International Futures Programme. This is designed to help decision makers to understand the
key factors affecting the long-term future. It provides monitoring of the long-term economic and social
horizon. It also provides early warning on emerging issues, pinpointing of major developments and possible
trend breaks.
For comprehensive information on all aspects of forecasting from methods to purposes to evaluation there is
a useful website – the Forecasting Principles site run by Wharton Business School. The work outlines a
number of different ways to approach forecasting and provides a forecasting methodology tree for
determining which forecasting method is most appropriate. While Strategy Unit cannot vouch for the day to
day currency of this site, at the time of writing it summarises much useful knowledge about forecasting. It is
designed to be accessible to researchers, practitioners, and educators. This knowledge is provided as
principles (guidelines, prescription, rules, conditions, action statements, or advice about what to do in given
situations). There are many materials that can be downloaded.
Forecasting
In Practice 1: SU Ethnic Minorities and the Labour Market Project
This project was set up to examine and improve the position of ethnic minorities in the UK labour market.
As a first stage, an Interim report was produced in early 2002. Amongst other things, the interim report
looked at the future size of the ethnic minority population within the UK, as well as the effects that this
would have on the labour market as a whole. The project did not do it’s own forecasting, but rather used
existing forecasts produced in this area. This data is discussed on page 24 of the Ethnic Minorities and
the Labour Market report.
The forecasts used were important in stressing the fact that the problems faced by ethnic minorities in the
labour market are growing to a point at which they become a problem for the wider UK population. In
other words, forecasting helped to show how a niche concern is likely to become a general one over time.
Strategy Survival Guide – Strategy Skills
Page 156