Mechanical Engineering magazine, the flagship publication of the American Society of Mechanical Engineers, publishes a monthly feature called “The Vault,” where decades old articles are reprinted to offer perspectives from the past.
In the most recent issue (October 2017, Vol. 139, No. 10), the editors included a forty-year-old article titled, “New Career Paths in Engineering, Applications of Solar Energy,” by Lloyd O. Herwig, which provided an overview of the projected economic viability of various solar power technologies circa 1977. The article was a reminder of how often the economic viability of up and coming technologies is only 10 to 20 years away, to which one might add, “And they always will be.”
Acknowledging that forecasts of economic viability are often wrong is not a criticism of such projections per se. To his credit, Dr. Herwig stated that the projections he was citing in 1977 were themselves based on forecasts of “technology development and competing alternative fossil and nuclear-fueled plants.” Absent a crystal ball, how would he or anyone else have predicted the events that would lead to a generations worth of low cost energy at the very height of a widely perceived energy crisis?
What is so frequently misunderstood about projections is that their benefits arguably lie less in their accuracy a decade or two later, but in the work of developing and maintaining them in the first place. Forecasting requires gathering data, considering multiple scenarios, challenging assumptions, and estimating risks, which in turn can be used to develop contingency plans and improve the speed and effectiveness of decision making in the face of uncertainty. At the same time, we do ourselves and the practice of forecasting a disservice when we either (a) unquestioningly believe our projections, investing too much in their accuracy over the long haul, or (b) dismiss them outright because “they’re always wrong.”
When done well, forecasting is as much about what is happening now as it is about the next 10 to 20 years, something that is worth considering when investing in projections of economic viability or in their results.