Forecasting and Management of Technology, Second Edition

8.1 The Context

World resources are scarce relative to human needs and desires; therefore, choices are necessary. Economics really is a science of choices—how they are made and how they ought to be made. Because economics must deal with the complexities of human behavior, accurate prediction is difficult. The tools of the economist and the technology manager are almost never as precise as those used by the physical scientist. However, economists and others have developed models that can make extrapolative predictions about the path of a technology's development and have provided simulations to illuminate the interrelationships that will determine its success or failure. While the results of these models cannot replace managerial judgment, they can inform that judgment.

Demand is the willingness to buy plus the ability to pay. The process of technological innovation occurs only when consumers, businesses, and governments demand the benefits of a new technology and pay for its cost. Technologies launched when profits are high and unemployment is low would seem to have a greater chance of success than those offered when consumers are insecure and businesses are struggling to survive. However, new technologies can bring societies out of a recession or depression as the push for new production stimulates investment, employment, and consumption. Technology managers must understand these relationships and how to integrate the implications of economic analysis into management decisions. ...