Forecasting and Management of Technology, Second Edition

8.3 Forecasting the Economic Context

The preceding section described extrapolative models that can be used to increase one's ability to forecast how technologies will grow based upon how they have already grown. The models are naive in that they do not suppose any understanding of the causal relationships determining the pattern. Instead, they use historical patterns of growth for earlier technologies and predict that the growth of the new technology will follow the same pattern. This has some obvious limitations. For example, the growth rate of adoption of a new technology no doubt will be affected by the availability of equity capital and/or credit, which may be different than in the past. Periods of high economic growth, for example, are characterized by rising stock markets and a lot of new initial public offerings (IPOs), most of which provide the funds to rapidly grow new technology businesses. Moreover, consumers and businesses have access to money to invest in new products and processes. Recessions, on the other hand, are characterized by a tempering of ambitious plans, a focus on making do with what one has, and a lack of credit and capital to try new things. Technology growth also is related to the production context in which it will be applied. Section 8.1.1 described how Porter's five-forces framework can affect the success of a new technology. Moreover, the technology delivery system (TDS) that is a focus of this book includes both the general economic environment ...