Why we are poor at predicting the future
WOEFUL TRACK RECORD OF SEERS
Four days before the Titanic ended up on the bottom of the ocean in 1912, Philip Franklin, Vice President of White Star Line, claimed that “the boat is unsinkable”. Three days prior to the 1929 stock market crash, renowned US economist Irving Fisher asserted that stocks had reached “a permanently high plateau”. Two months in advance of the release of the Apple iPhone in 2007, Microsoft CEO Steve Ballmer sneered “there’s no chance that the iPhone is going to get any significant market share”.
History is littered with people who made bold predictions about the future that turned out to be spectacularly wrong. They each prove the adage that “predicting the future is easy, getting it right is the hard part”. Anytime you make forecasts, you run the risk of looking foolish. While people want to know what will happen in the future, the truth is that no one really knows. Still, that has not stopped “experts” from offering bold yet incorrect pontifications.
To illustrate, the history of predicting business trends is a tale of misjudgments. Just look at the track record of foretelling the future of computing. In 1943, Thomas Watson (IBM) declared that “the world only needs five computers”. In 1977, Ken Olson (Digital) proclaimed that “there is no reason anyone would want a computer in their home”. Not to be outdone in the I-got-it-terribly-wrong category, Bill Gates told us in 1983 that “Microsoft will never make a 32-bit operating system”.
But wait, there’s more! In 1962, British rock band The Beatles were informed that “guitar music is on the way out”. In 1996, Harry Potter author J.K. Rowling was advised that “children just aren’t interested in witches and wizards anymore”. In 2004, Microsoft co-founder Bill Gates told delegates to a World Economic Forum that “two years from now, spam will be solved”.
Clearly, prophecy is a tricky business. Still, that hasn’t stopped hordes of people from trying to prognosticate about the future. There are myriad examples of famous last words including “electricity is just a fad”, “radio has no future”, “television is a flash in the pan”, “a rocket will never be able to leave the Earth’s atmosphere”, and “the Internet will catastrophically collapse”.
Around the time I started my working life in the mid-70s, futurists were saying that by the 21st century, technology would have reduced the need for labour. The concern back then was that automation would usher in a fifteen-hour working week and we would all be bored due to an over-abundance of leisure time. I think it’s fair to say that conjecture was woefully off-target. These days, most of us are time poor with working parents particularly feeling the pressure.
Another inaccurate prophecy was the demise of shopping centres. Internet shopping, we were told, would spell the end of bricks-and-mortar retailing. While online commerce has undisputedly taken off, it has not made the high street store extinct. Indeed, shopping centres remain magnets around Christmas and other peak shopping periods. People still flock to the shops, despite the queues and a lack of parking.
Movie theatres were also put on the endangered species list following the release of home videos. But the long-predicted drama — “Death of the Cinema!” — has not eventuated. Cinemas have hung on with the advent of multiplexes and luxury cinemas. Today, moviegoers can experience plush seats with call buttons, oversized screens with surround sound, and exclusive lounges with complimentary refreshments.
My track record as a blogger for well over a decade proves that I am not afraid to swim against the tide of popular opinion. When it comes to the unmitigated praise surrounding new technology, I am a true doubting Thomas. In posts which I published when I was CEO of Gateway Bank, I took counter positions to the overhyped predictions regarding the take-up of Bitcoin, Google Glass, and wearable technology (to name but a few) and was proven correct in each case.
I’ve always had a healthy scepticism of crystal ball gazers and so was drawn like a magnet to a book by investigative journalist Dan Gardner. Future Babble: Why Expert Predictions Fail and Why We Believe Them Anyway, is a fast and informative tome which reveals the repeated and sometimes monumental failure of expert predictions in every field.
Gardner reveals that he’s “… always been fascinated in the way that experts are held up as gurus and taken so terribly seriously and when their predictions fail, people just shrug and walk away”. He argues that the average pundit is about as reliable as flipping a coin.
To support this view, Gardner draws on the work of Philip Tetlock, a professor of psychology at the University of California at Berkeley. Following extensive research, Tetlock discovered that experts’ predictions were no more precise than random guesses. Tetlock concluded that “… experts are about as accurate as dart-throwing monkeys”.
Gardner surveyed the history of predictions and found a legion of oracles who got it wrong. H.G. Wells famously declared that World War I would be “the war to end all wars”. Albert Einstein argued that “only the creation of a world government can prevent the impending self-destruction of mankind”. Biologist Paul Ehrlich declared in his 1968 book The Population Explosion that “the battle to feed all of humanity is over”.
On the other side of the coin, soothsayers failed to predict events that did occur. No one foresaw the fall of the Berlin Wall. No one forecast the rise in fertility rates after World War II. No one envisaged the phenomenal rise in Internet usage. No one factored the 9/11 disaster into scenario planning. And very few economists predicted the Global Financial Crisis.
From the Y2K hysteria to the fervent belief that the Japanese economy would permanently overtake the American economy in the 1990s, history is littered with examples of seers who got it wrong. Yet, as Gardner notes, the general public continues to put great faith in experts who never lose their widespread appeal.
To that end, modern-day futurists have made a raft of bold predictions about what lies ahead for humanity. A sneak peek into the future through the eyes of one seer predicts that biotechnology will become the foundation of new therapies, autonomous vehicles will become mass-market reality, 3D printing will be everywhere, and artificial intelligence will become an integral part of our lives.
I’m with Gardner when he says that “the future will forever be shrouded in darkness”. Expert predictions fail because the world is complicated, yet our flawed quest for certainty continues. Life has taught me that tomorrow is full of surprises. At best, the future is very uncertain and, at worst, it’s absolutely chaotic. No wonder I’m still waiting on my flying car, robot maid, paperless office, and personal jetpack.
Only fools or geniuses try to predict the future — and I’m neither!
Paul J. Thomas
Chief Executive Officer
Ductus Consulting
Ductus is Latin for “leadership” and “guidance”. Ductus Consulting provides executive mentoring and leadership development. We work one-on-one with CEOs and executives to help them become better and more engaging leaders. We teach top dogs new tricks.
Ductus is owned by Paul Thomas who has personally walked the leadership path for over four decades. He is authoritative with the gravitas you would expect of a business author and former banking CEO.
