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Predicting the Future Is Tricky for Businesses

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Predicting the Future Is Tricky for Businesses

Business

Predicting the Future Is Tricky for Businesses

Predicting the Future Is Tricky for Businesses

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Companies spend millions of dollars every year trying to figure out the next big thing that will become both a retail success and a popular phenomenon. But when companies try to predict the future, they often fail.

STEVE INSKEEP, host:

Let's look at some more predictions. On Mondays, we look at technology. And today, we will look at the future - or rather, corporate attempts to look into the future.

Companies spend millions of dollars per year to come up with a new thing, the next new thing, an innovation that will generate huge profits, a tech icon, the iPod, the BlackBerry, whatever.

But as Cyrus Farivar reports, when companies try to predict the future, it is safe to predict that they will usually fail.

CYRUS FARIVAR: Every tech company wants to sell people the hot new product that will move them closer to the future.

Mr. ALEX PANG (Research director, Institute for the Future): Thinking about the future is not a science, by any means.

FARIVAR: Alex Pang is the research director of the Institute for the Future in Palo Alto, California.

Mr. PANG: One of the things that futurists have discovered through long years of experience is that you cannot actually predict the future, or at least you can't predict the interesting stuff.

FARIVAR: For example, when cell phones debuted in the 1980s, it was easy to understand why they would be useful for wealthy people who were on call, like doctors and attorneys. But Pang points out that no one at that time had any idea how cell phones would be used 20 years later.

Mr. PANG: Cell phones are also used by, you know, by moms to keep in touch with their kids who use their cell phones to text each other or to text their, you know, friends who may live in Latin America or Africa or Asia. And in those places, those kids' parents are using cell phones sometimes to do micro credit transaction.

FARIVAR: More often, consumer technologies are over hyped and then fail. In recent memory, one of the biggest flops was the Segway, an upright motorized scooter. When it debuted in 2001, its inventor claimed it would be revolutionary. But he didn't account for how it would interact with existing technology, like sidewalks.

Mr. VINTON CERF (Internet Evangelist, Google): It got banned, for example, in places where there were a lot of people who were walking, out of a concern that people would get run over.

FARIVAR: Vinton Cerf is one of the pioneers of the Internet's underlying technologies and now is Internet evangelist at Google. Cerf adds that the technologies that seem to have the most lasting effect are the simplest ones, like phone lines.

Mr. CERF: As an example, the twisted pair copper telephone network, which has been around for a very, very long time now, has had a long-lasting presence in our infrastructure because, in fact, it's very basic. It just - it carries signals. It's like roads. You know, the roads haven't changed a heck of a lot since Roman times, I suppose you could make an argument there.

FARIVAR: Other tech leaders point out that the future isn't just some arbitrary thing that happens on its own. Esther Dyson is an entrepreneur and board member for the Long Now Foundation. It lets people make long bets about the future. She herself has bet $5,000 that by 2012, Russia will be the leader in software development. She hopes her bet will create buzz and interest.

Mr. ESTHER DYSON (Board member, Long Now Foundation): You alone don't have a lot of influence, but getting enough people interested can influence the outcome. So it's not a clean bet on a game of chance. It's not exactly poker, either.

FARIVAR: But influencing the future may be different than making forecasts, says Alex Pang of Institute for the Future.

Mr. PANG: Voice recognition, you know, has been five or 10 years away from commercial applicability, and that's been true for the last 30 years. There are some technologies that we always seem to pretty consistently misjudge. It's a pretty humbling experience.

FARIVAR: So, for now, until the future arrives, we'll have to settle for our Priuses, our Wiis and our iPhones.

For NPR News, I'm Cyrus Farivar.

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