Technological forecasting financial definition of technological forecasting
technological forecasting the process of predicting the direction and scope of future technological advances. With rapid advances in science and technology shortening PRODUCT LIFE CYCLES and improving production techniques, firms need to forecast technological developments. Technological forecasting helps the firm to formulate its BUSINESS STRATEGY by identifying opportunities and threats presented by technical change, and assists in the planning of RESEARCH and DEVELOPMENT programmes by identifying new areas to explore. Technological forecasting can be done in several ways, by means of:
- methods which identify and extrapolate trends derived from historical data; for example, in plotting trends in data storage capacity and information processing speed over time, it is possible to identify the development of, first, valve-based computer technology, then transistor-based technology, present semiconductor (silicon chip)-based technology, and future fibre optics-based technology;
- methods based upon the subjective impressions of practising technologists. A single expert may write in some detail about the possible future of his own field of technology (‘scenario'writing), or a consensus of expert opinion may be sought, using the DELPHI approach where the experts first independently give opinions concerning the development of a scientific field, then distil these opinions to produce an overall view of likely advances. See BRAINSTORMING, NOMINAL GROUP TECHNIQUE.