Future Scenarios to Inspire Innovation

Forth International Seville Conference on Future-Oriented Technology Analysis (FTA)
FTA and Grand Societal Challenges – Shaping and Driving Structural and Systemic Transformations
Seville, 12-13 May 2011

Future scenarios to inspire innovation

Peter De Smedt*[1] Kristian Borch**

*SVR - Research Centre of the Flemish Government - Boudewijnlaan 30, B-1000 Brussels, BE

** Department of Management Engineering - Technical University of Denmark, DK

Abstract

In recent years, and accelerated by the economic and financial crisis, complex global issues have moved to the forefront of EU policy making. These grand challenges cut across different policy domains and hence cannot be addressed through a specific sector alone. The EU 2020 strategy supporting the transition towards sustainability is seen as the process of coming to terms with the grand challenges in all its ecological, social, economic and institutional dimensions. This process is as much about designing future innovation systems and research priorities, as it is about implementing present technologies and (risk) management practices.

Thinking about the future in forms of scenarios implies imaging it in ways it might, should or should not come into reality. But is the near future – or the end of the present - still open? Or is it already occupied by political visions, economical interests and technological unfolding? What innovations deserve our immediate interest? Why is the future given less value than the present, as reflected in the current and continuous attempts to discount the future of our natural environment?

In this paper the authors will motivate that new methods are emerging for orienting innovation systems towards sustainability. Participatory scenario analysis is one of these promising methodologies.The authors will focus on the question how participatory scenario analysis can be used as a tool that supports innovation, in theory as well as in practice. The paper will first provide an overview of new emerging concepts and paradigms from different scientific disciplines such as future studies, innovation research, sociology, policy analysis and global environmental change. These concepts and paradigms will then be used to analyse the selected European case studies with a focus on disruptive transformations. This empirical analysis will strongly focus on the ex-post evaluation of the different scenario processes, the related outcomes and indications of the impact on planning and decision-making. Issues of interest are how the applied or perceived notions of time,multiple stakeholder values and sustainability transitions are initiating enablers or barriers for innovation in the scenario process. These empirical findings will then be reflected back to the scenario methodology providing new insights to inspire processes that support innovation addressing the grand challenges.

Keywords:Scenario methodology; Innovation; Sustainability transitions; Participatory scenario analysis

1. Introduction

A society is characterized by the problems and solutions on the political agenda. Most policies are complex and dynamic in nature. External and internal developments change continuously, causing shifts in problem perception and priority setting. Often it is not clear what the real causes are and different competing policy options are on the table. In this context, a policy is defined as a formal statement giving the relationship between information input and resulting decision flows. One result of the above described complexity is a new type of uncertainty about the future, an uncertainty whose distinctive feature is disagreement amongst experts and stakeholders about the future consequences of present-day innovations (Webster, 1999). But also efforts to control, manage and engineer the future produce unprecedented uncertainties Adam, 2006). For instance, developments in science and technology have a strong potential to influence social change. There are, however, many reasons why the practical use of technology and scientific knowledge varies widely between countries. Societies differ, economies differ, and governments deal with international scientific developments in different ways through the policies they pursue (Timmermans, 2001). This complexity challenges the capacity to learn from experience (Welp et al., 2006).

Foresight is a professional practice to support significant decisions, and therefore it needs to be more assured of its claims to knowledge (methodology). With respect to the globalisation of a fast-moving world, the complex relationships between endogenous and exogenous processes are easier to conceptualise than to identify via quantitative assessments (Young et al., 2006). When drivers of change are not only multiple but also mutable, it is not sensible to extrapolate the future from data and relationships of the past. It is often stated that scenarios can provide a heuristic for identifying, understanding and responding to future change (van’ t Kloostervan Asselt, 2011). However, developing the scenarios in practice is less straightforward than in theory (Fuller et al., 2006).

Using future scenarios is practiced across many domains and is not restricted to specialised futurists or scenario specialists. Unfortunately, the disciplines of foresight are not well articulated or disseminated across domains, leading to re-inventions and practice that does not make best use of existing experience in other domains.The continuation of a ‘futures’ elite will therefore not serve the society in best way.Chermack (2005) argued that even after more than 50 years of scenario planning there has been insufficient research to fully ground scenario practice. In addition, Fuller & De Smedt (2008) highlighted that foresight methodology lacks reflexivity. Reflexivity is a relatively modern epistemological position in social sciences. It states that social knowledge, including the interpretation and use of scientific knowledge, is created through the interactions between people (discourses, language, social action). These interactionstrigger changes in self-identify, interpretation of meaning, practice and anticipations of the future (Fuller & De Smedt, 2008). In this paper we analyse how scenario analysis is used as a tool that supports innovation by intentionally leveraging the principle of reflexivity (‘participatory’).The empirical findings will then be reflected back to scenario methodology providing insights to inspire processes that better support innovation addressing the grand challenges.

2. Methodology

The paper reflects on the intermediate outcomes of an ongoing research. The research is set-up as an iterative inquiry how scenario analysis can be used as a tool to support innovation in theory as well as in practice.The key methodological issue at stake is why scenarios are more often used to explore potential future risks instead of inspiring sustainable innovation. Are inherent assumptions imbedded in the scenario methodology in favour of this risk approach, or is this more related with habits of past and current practitioners or sponsors of scenario studies?

Three complementary perspectives on policy change (after De Smedt, 2006) were proposed to analyse how to better use future scenarios to drive innovation:

(i)How can future scenarios present a window of opportunity to effectively drive decisions?

(ii)How can future scenarios enhance the legitimacy for action?

(iii)How can future scenarios provide evidence to decision-makers empowering the stakeholders involved?

The comparative case-study design allowed for a systematic ex-post evaluation of similarities and differences between the scenario projects of which some were driving innovation better than others. The empirical evidence is based on a limited number of scenario projects (see Annex 1) and therefore could not provide a full picture of scenario practice. Hence, our aim was to initiate the work on comparing scenarios to disclose some principles on how to better drive innovation through scenarios. This comparison revealed different clusters of scenario practices allowing us to compare and formulate areas of methodological improvements to better incorporate innovation to support the transition towards sustainability.

3. Results and policy impact/implications

Achieving sustainability via transformations of the future is about seeking to change what is assumed would have been there had no interference taken place (Adam, 2006).The objective of a scenario exercise is to assess the variation in possible futures in order to provide insights on the potential range of outcomes (Alcamo 2001, Metzger et al., 2010).The value of scenarios lies in the robustness of the claims to knowledge arising. As foresight knowledge is (socially) constructed, an explicit reflexive account of the production of that knowledge is a methodological necessity, as it will reveal such significant choices underlying the presented texts (Fuller & De Smedt, 2008).

In the 16 cases analysed, scenarios have dealt with uncertainty, complexity and discontinuities. We found different scenario approaches that addressed future transformations to drive innovation as well. To structure our research, the scenarios have been evaluated using the 3 perspectives mentioned in the methodology section: (i) window of opportunity; (ii) legitimacy for action; and (iii) empowering stakeholders. A brief overview of our findings is given in the corresponding paragraphs.

3.1. Window of opportunity

Leveraging the first perspective, i.e. window of opportunity, we looked at the use of scenarios to support decisions. A first impression indicates a dichotomy between public and private sector. While the private sector uses scenario exercises as an input to strategy making in order to be innovative and competitive in changing markets, the public sector uses the same type of exercises for adapting policies to emerging trends in societies. In our analysis, we see that within the public domain the process objectives of scenario projects such as open dialogue with stakeholders and public awareness raising are more dominant. Innovation or at least innovative approaches are also part of the discourse. However our analysis indicates that these scenarios are too broad for being successful in defining tangible opportunities for innovation. This is contrasting with the more business oriented scenarios that are more opportunity and technology driven therefore providing tangible areas for innovation. Net, a more comprehensive analysis is not evident due to the explained dichotomy. What neither helps is that the sample of case-studies is biased towards the public sector. Additional analyses are needed to further ground our preliminary observations.

3. 2. Legitimacy for action

Looking at the second perspective, i.e. legitimacy for action, our analysis revealed 3 clusters:

1. A first cluster is characterised by a focus on framing boundaries. The “Prelude Scenarios”[2] are a good example. An important input for the scenario work in this cluster are the comprehensive descriptions of the external drivers for change highlighting the uncertainty of future developments. This uncertainty is reflected in a distinguished set of possible long term future images that are often derived from a multi axes framework of the most important but uncertain drivers of change. The value of the set of scenarios lays in the capacity to explore boundaries. Creating awareness for the unforeseen is most often an important objective and desired outcome of this cluster of scenario exercises. A technique underpinning these types of scenarios is described by Weiner & Brown (2006) as the extremes that inform the middle. We found that adapting for change is often the general theme in the lessons-learned. Still, it is less obvious using these scenarios for bridging today’s decisions with the future images. We found that crystallising concrete policy initiatives for innovation from long-termfuture images, i.e. beyond 20 years, can be difficult. Most often, the scenarios are used to highlight important societal assets under threat. This links well with the concept of risk-society (Beck, 1995) and risk management. Our preliminary analysis suggests that this can be partly contributed to the selected process design for developing the scenarios. By having a strong focus on the external dimension, adapting for change is logically seen as the dominant response. In that sense the potential for innovation within the system is less acknowledged in the analysis.

To address this imbalance between outward and inward reflection we suggest that the scenarios in this cluster could benefit from complementary techniques connecting the long-term future images to the present via step stones. In addition, using complementary roadmaps - linking action to change - can enhance the (internal) innovation potential. The concept of road-mapping has it roots in science and technology planning. A science or technology roadmap is like a highway roadmap that describes how one might proceed from a starting point to a final destination. Like a highway roadmap shows the intersections between roads, a science or technology roadmap also shows the intersections between scientific steps or technologies (Gordon, 2003). A roadmap can take various forms, but generally comprises a time-based chart together with a number of layers, which provides a means to link technology and other resources to future products, as well as to innovation objectives and milestones (Phaal et al., 2001).

1. A second cluster is characterised by a focus on back casting from targets. “Getting into the Right Lane for 2050”[3] is here a good example. In this cluster, changes in the external environment are part of the scenarios. But in contrast with the first cluster, change is less described via framing very different long term future worlds. The focus of the scenarios in the second cluster is oriented towards a sequence of clear targets linked with short-term step-stones, i.e. 5-10 year. By breaking up the long-term in more tangible time periods it helps to understand the necessary steps for embracing change. In addition, the interplay of the different contributions to achieve the targets becomes more visible. The foreseen outcome of long-term investments, for example, can be visualised and confronted with a changing environment. Different from the above cluster, this one already leverages the use of roadmaps. We found that selecting areas for future opportunities are often the general theme in the lessons-learned from this cluster. Often the focus is very much on elaborating areas of enhanced technological cooperation and converging technologies.Clearly innovation is an essential feature of the scenarios. The images of the future are focused and often strongly technology driven.

Our preliminary analysis also suggests possible improvements for this cluster. The innovation potential of the scenarios can be strengthened via broadening the system boundaries and enriching the future images. Flexibility, either avoidance of surprises or fast utilization of sudden opportunities, becomes one of the key issues. In order to avoid surprises the policy/strategy process should be able to open the scope of observation for periphery incidents and early, unstructured data that implicate potential discontinuities (Ilmola & Kuusi, 2006). In addition, including perspectives from the different stakeholders can reveal new areas for innovation (Prell et al., 2007).

1. A third cluster is characterised by a focus on back casting from principles.A good example can be found with the scenario practice developed by the Natural Step[4] (see for instance Givaudan, 2011).The main focal points of the scenarios are sustainability concerns and criteria. Here, the future plays more the role as the time needed to introduce the necessary changes to comply with the envisaged principles. Change is part of the scenarios but the focus is less on framing the extremes. Interaction between the organisation and the environment is seen as the main driver. This is often reflected in the outcomes envisioning a preferable future and experiments towards that future.

Also for the third cluster, we suggest some areas of improvement. For instance, well designed roadmaps linking today’s experiments with future images can improve the impact of the scenarios. In addition the success of the roadmaps can be tested for different possible future images. This will provide essential information about the robustness of the innovation potential.

The 3rd SCAR foresight exercise (EC, 2011) also falls into this cluster with its focus on research priorities and innovation to meet necessary change and uncertainties in the agri-food sector facing resource constrains and environmental limits. The impact of the scenarios are implemented as research priorities, but could be improved with regards to knowledge dissemination e.g. education and the scientific societies involvement in policy discourse.

3. 3. Empowering stakeholders

Developing scenarios does not only deal with the collection of data and models; it also involves the interaction of the stakeholders, their ideas, values and capacities for possible action. In the past decades, expert judgement was the main input for scenario development. Involvement of stakeholders was not intentionally looked for. The Delphi-technique for instance is a forecasting techniquethat uses estimates from mainly experts (Rowe Wright, 2001). In reality, this might lead to limitations. Firstly, the expert (i.e. scientific) mind-set fosters expectations of regularity, simplicity and certainty in the phenomena and in our interventions (Funtowicz & Ravetz, 1999).But these can inhibit the understanding of the problems and of appropriate methods to their solution (van’ t Kloostervan Asselt, 2011). Secondly, experts are not always having an interest/stake in the problem or solution discussed. Our analysis suggests that scenarios developed with broader stakeholder/expert participation will provide richer future images that go beyond the probable that is determined by the past and present (Prell et al., 2007). Opposite to past scenario practice, we believe there is no clear cut between experts and stakeholders: experts sometimes have a stake in the problem or solution discussed and stakeholders equally have their expertise. It is key to benefit from this rich and complex audience.