The document discusses various theories and methods related to technology forecasting. It defines technology and discusses theories on the process of technological change proposed by various scholars. It also outlines some limitations of these theories. Additionally, it describes various quantitative and qualitative methods used for technology forecasting like trend extrapolation, growth curves, Delphi method, relevance trees, and morphological analysis. It provides details on how these methods are applied and discusses their relevance and limitations.

2. - Ferré (1988) has defined technology as
“practical implementations of intelligence”.
- Gen dron (1977) defined as “A technology
is any systematized practical knowledge,
based on experimentation and/or scientific
theory, which is embodied in productive
skills, organization, or machinery”.

3. defined as:
“the process by which economies change over
time in respect of the products and services they
produce and the processes used to produce
them”.
it also has been termed as:
“Alteration in physical processes, materials,
machinery or equipment, which has impact on
the way work is performed or on the efficiency
or effectiveness of the enterprise”.

6. Some of the major limitations of neo-classical theory are:
• Only labor and capital are incorporated as factors of production.
• The presence of infinite techniques at a given level of technology is
rather unrealistic.
• Only cost-reducing improvements can be described by the production
function.
• Though an efficient tool for equilibrium analysis of economic life, it is
ill at ease when dealing with dynamic problems.

7. - Karl Marx perceived technology as not self
generating, but as a process directed by
willful, conscious, active people and molded
by historical forces
He held that technological change - the
development of the productive forces - was
the prime mover of history

8. • Undermining of capital-saving innovations.
• Underemphasizing the concept of
productivity.
• Controversy involved in the theory of the
falling rate of profit.

9. This theory views innovation as the engine of economic
development and as a disequilibrium phenomenon.
Innovation is defined as the carrying out of new
combinations of means of production, which include a
wide variety of cases such as: the introduction of a
new good or of a new quality of a good, or of a new
method of production, the opening of a new market,
the conquest of a new source of supply of raw
materials, the carrying out of a new organization of
any industry.

10. Continuation Schumpeter’s Theory
Schumpeter’s formulation of
production function differed from
neo-classical theory in that capital
was excluded and only labor and
land were included as inputs.
Major limitations of this theory are:
• Psychology of the entrepreneur (the embodied aspect of
innovation) is an elusive phenomenon.
• No explicit attention is paid to the process by which
innovation is generated.
• Lack of empirical evidence.

11. This suggests a biological analogy to explain
technological change.
The Darwinian two-state process of mutation
(invention) and selection (innovation) has been
employed to understand the evolution of
technology

12. Major limitations of the evolutionary theory
are:
• Dearth of quantitative models.
• Many propositions need to be validated.

13. Markets govern the innovation process.
The market constitutes a communication
channel through which political, economic,
social and ecological forces influence
buyers in their demand for technological
products.

14. Major limitations of this theory are:
• The logical and practical difficulties in interpreting
the innovation process.
• Difficulties of defining demand functions as
determined by utility functions.
• The incapability of defining the ‘why’, ‘when’ and
‘where’ of certain technological developments instead
of others.

15. Technology is defined as an autonomous or
quasi-autonomous factor. It assumes a oneway causal determination approach, i.e.,
from science to technology to the economy.

16. Major limitations of this theory are:
• Failure to take into account the intuitive
importance of economic factor in shaping the
direction of technological change.
• Lack of understanding of the complex
structure of feedbacks between the economic
environment and the directions of technological
change.

17. Measurement
Of
Technological Change

18. Economic Indices
Arithmetic indices are derived based on
price variations in capital and labor in
relation to the industrial output.
Technological change is measured as the
weighted average of the change in factor
prices, holding inputs constant.

19. Patent
s also been
They have
used to analyze the
diffusion of technology
across firms or
industries or countries.

20. Rate of improvement of technology
A figure of merit for each functional
capability of a technology is to be
identified.
S-shaped growth curves are
formulated to form a system of
curves depicting advancement of
technologies.

21. Rate of Substitution of Technology
It is determined on the basis of relative
changes in the market shares of two
technologies or two sets of technologies.
Cumulative pattern of gain in market
share by a technology exhibits S-shaped
growth.

22. Rate of Diffusion of Technology
It represents the
cumulative number
of adopters of a new
product, material or
process. This follows
an S-shaped curve.

23. Use Of Technology
Forecasts

24. In the National Context:
• Developing technological competencies.
• Planning for creation of sustainable comparative
advantages in select technological thrust areas.
• Planning for the well-being of citizens with the aid
of technological innovations.

25. In the context of Business Firms:
• Establishing technical parameters and performance
standards for new products and processes.
• Augmenting new product development efforts as well
as improvement of existing products.
• Enabling better timing for new technology introduction
and facilitate ‘take-to-market’ strategy formulation.
• Aiding prioritization of research programs and
identification of techno- scientific skills required for the
same.
• Identifying major opportunities and challenges in
technological environment and offering guidance for
technological planning.

26. • One of the main aspects of Technology
Forecasting is its communication aspect.
• Technology Forecasting (TF) initiates and fosters
the communication between various communities
such as:
• Science and science (inter-disciplinary fields)
• Science and Technology
• Industry and politics
• Technology and public administration
• Technology and the general public.

27. Technology forecasts can be a short, medium
or a long-term exercise.
Short term forecasts are of usually a year or
less, might typically deal with a single technology.
Medium-term forecasts might cover a 2-10 year
period.
Long-term forecasts cover 10-20 years - a time
horizon long enough for totally new technologies
to emerge.

28. The most appropriate choice of forecasting
method depends on:
• What is being attempted to forecast
• Rate of technological and market change
• Availability and accuracy of information
• The planning horizon
• The resources available for forecasting.

29. Classification
Of
Technology Forecasting Methods
The technology forecasting methods can be classified as
exploratory and normative forecasting methods.
Exploratory technology forecasting starts from today’s
assured basis of knowledge and is oriented towards the
future.
Normative technology forecasting first assesses
future goals, needs, desires, mission, etc., and works
backwards to the present.

31. Delphi Method
The Delphi method, which is subjective in nature, is
arguably the most popular forecasting tool in vogue.
Though statistical or model-based forecasting
techniques are preferred over expert opinion
techniques, there are two scenarios where subjective
(or intuitive) methods are found to be relevant.
• When there is no precedent - mostly in the case of new
technology forecasting where expert opinion is the only
possible source of forecasting or in situations where the
impact of factors which were previously considered to be
relevant have lost their strength.
• Ethical evaluation is required – instances where ethical
issues are more important than technical and economical
issues.

32. The Delphi process involves the following steps:
• Identify the subject in which the Delphi survey is to be conducted.
• Recruit a group of experienced people who can prepare the questionnaire for
forecasting the technological developments.
• During the first round the questionnaire is then distributed among experts to address
all possible aspects of the issues. These participants are asked to forecast events or
predict trends regarding the issue. The responses are collected and all opinions
including the extreme ones are taken into cognizance.
• In the second round, results of the first round are sent back to the participants and it
contains a consolidated list of all the responses. The participants are then asked to
forecast the possible occurrences enlisted in each of the responses.
• In the third round, all the responses are sent back to the participants. This time,
along with the inclusion of statistical details, they are also asked to reevaluate their
responses. After the end of the third round, the moderator processes the response by
combining it with similar responses, summarizing lengthy ones, etc.

33. • The questionnaire for the fourth round contains the responses, the statistical
information and the summary of points for modifying the forecasts, if any. Here
the participants are required to provide reasons for any change in a given forecast
value.
• At the end of the fourth round, the moderator collects and summarizes the
results and comes out with forecasts, the degree of disagreement and a summary
of critical issues for each forecast.
• The Delphi method is mostly used in the following contexts:
• To determine critical factors that might impact the development of technology.
• To forecast statistical estimates on the progress of a particular technology over
a specified duration.
• When forecasting cannot be made using other methods.
• To evaluate the chance of a particular event occurring under given conditions.

34. Trend Extrapolation
This method uses historical data rate to determine
the rate of progress of technology in the past and
extends it into the future. This type of forecasting
implies that the factors which affected the past
trends would continue to impact in the same
known manner.
There are two types of extrapolation based on the
rate of progress of past behavior – linear and
exponential methods.

35. Linear Extrapolation is used where a linear
growth function is predicted. The trend is explained
using the linear equation:
y=Ax+B
i
i
yi is the value of the dependant variable in the ith
time period
xi is the value of the independent variable in the ith
time period
A and B are estimated by the method of sum of
squares and minimizing them from the projected
extrapolation.

36. The second method of trend extrapolation is
the exponential method. A exponential
growth curve could be assumed to be as
follows:
Y=AB
i
Xi
Yi is the value of the variable to be estimated
Xi is the impact variable
A, B are constants to be estimated.

37. Technology Monitoring
Major steps involved in technology
monitoring are:
• Scanning
• Filtering
• Analysis and Development of
forecast

38. Scanning
The idea behind scanning is to collect as much information that
is available on the particular field of technology. The
information could cover the following aspects:
• Research plans and developments
• Environment of the technology
• Support of various governments for the technology
• Human skills and capabilities
• Social and ethical issues
• Benefits of the technology

39. Filtering
In most cases, not all the information
captured on the technology would be
relevant for a particular forecast. Hence,
based on the forecast required, the
necessary information is identified
through filtering of pertinent data.

40. Analysis and
Development
This methodology is relevant in
situations such as developing
Research and Development (R&D)
plan; and identifying new sources of
technology or emerging technologies

41. Growth Curves
The evolution of technology as function of time has
been found to follow patterns similar to the growth
curves of biological systems. The biological s-curve is
used to represent technology evolution with technology
adoption on the y axis and time on the y axis.
There are basically two types of s-curve formulations,
which can be adopted based on the requirements of
the forecaster.

42. Pearl - Reed Curve
The Pearl-Reed curve is symmetric about the
inflection point (at y = L/2) and plots a straight line
on a semi log graph.
The pearl curve is used to track individual
technologies. But the overall growth of
technologies is tracked by integrating the s-curves
of all the individual curves.
y = L / (1 +a * e-bt)
y
L
a
B
Forecast variable
Upper limit of y
Location coefficient
Shape coefficient

43. Gompertz curve
The Gompertz curve is not symmetric about the inflection
point and does not plot a straight line on a semi log graph. But
the log of L/y does plot a straight line on a semi log graph.
These curves are used to represent technologies where the
growth in the initial stage is faster than in the Pearl curve.
Y = L*(e-bt)^-kt
y
Forecast variable
L
Upper limit of y
b
Location coefficient
k
Shape coefficient

44. Relevance Trees
It is an organized ‘normative’ approach starting with a particular objective and
used for forecasting as well as planning. The basic structure looks like an
organizational chart and presents information in a hierarchical structure.
The principle behind using the relevance tree is to evaluate systematically
all the related technologies that would lead to the success of the intended
objective.
From the forecasting perspective, the branches represent alternatives
that are traced to a number of points, which represent deficiencies in
the existing technology. Thus, the relevance tree provides a framework
for identifying the deficiencies that need to be overcome. It is usually
relevant in situations where distinct levels of complexity can be
identified and the same can be simplified by further breaking them
down.

46. Morphological Analysis
It is a normative technique developed by Fritz Zwicky
which provides a framework for exploring all possible
solutions to a particular problem.
The morphological analysis involves the systematic study
of the current and future scenarios of a particular
problem.
Of all the techniques available for forecasting new
products or processes, morphology is one of the most
systematic. The technique relies on a matrix, usually
called a morphological box.

47. Figure 13 is an example that uses a morphological box to examine the
possible development of clocks. The vertical axis, lettered A, B. C. etc.,
defines the stages of parameters or the technology under
consideration. The horizontal axis, numbered 1, 2, 3, etc., defines
alternate methods to achieve the stages or parameters.
The analysis is usually initiated by starting with a well-known or existing solution (AlB1-Cl-D1-El-FI), and changing one element at a time. Alternate methods (e.g., A2-B2Cl-D1-El-F1) are analyzed to find potential improvements in current technology. The
solutions can be examined for efficiency, and estimates then made of the time when
the alternative technologies might be available.

48. Mission Flow Diagrams
Mission Flow Diagrams have been originally conceived by
Harold Linstone as a means of analyzing military missions.
The analyst needs to identify significant steps on each route
and also determine the challenges/costs associated with
each route.
This involves mapping all the alternative routes or sequences
by which a given task can be accomplished.
The performance requirements
can then be derived for each
associated technology and the
same can be used as normative
forecasts.