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Chapter
2
The Forecasting
Business
Some
"Amusing" Forecasts
- What follows are a number of
"amusing" quotations. Each section begins with a quote
and is then followed by a brief analysis. You may want to
attempt to put yourself in the shoes of the people who
made these statements. What was their knowledge and world
view that led to such poor forecasts? Are today's
forecasters producing equally poor forecasts?
Medicine
The "theory" of germs represented a
major step forward in medicine. Such major breakthroughs
in science do not occur very often. The theory of germs
led to significant changes in medical practice. Nowadays,
even young children are taught to wash their hands and to
"cover" their sneezes-to avoid the spread of germs.
The Telephone
Samuel Morse invented the telegraph
in 1842 and its use gradually spread to much of the
world. Using Morse code, printed messages could quickly
be sent over long distances. The telegraph technology was
well established by the time that Alexander Graham Bell
invented the telephone in 1876. Western Union was a major
supplier of telegraph services in the United States.
When a new technology competes with
an existing technology, it is not always easy to see
which will win. Who could have foreseen a person driving
a car down a freeway, carrying on a telephone
conversation with a person flying across an ocean on the
other side of the world?
Motion Pictures
Thomas A. Edison was a prolific
inventor and was very successful in developing companies
to produce and market his inventions. He is considered to
be one of the inventors of the motion picture. The two
quotes give his insights into how the motion picture
would revolutionize education. He was wrong.
A number of years later, similar
predictions were made about television, and then about
video tape. It seems clear that Edison had little insight
into the complexities of an educational system. Education
is far more than an information delivery system. We must
keep this in mind as we examine some of the possible
impacts of information technology on our educational
system.
The Radio
The first commercial radio station
began broadcasting in 1920. Few people had a clear vision
of the future of commercial radio broadcasts. For
example, who would have thought that there would be
radios in cars or that people would carry portable
radios-even when jogging?
Electronic Digital
Computers
Electronic digital computers based
on vacuum tube technology were simultaneously developed
in England, Germany, and the United States beginning in
the late 1930s. The Electronic Numerical Integrator and
Calculator (ENIAC) was built in the United States and
became operational in January of 1946. It is considered
to be the world's first fully operational,
general-purpose electronic digital computer.
The ENIAC was designed to do
numerical calculations-it was an amplification of the
desktop calculating machine. It could do the work of
several hundred people working with electric calculators.
In 1943, Thomas Watson did not envision very many
problems that required such massive amounts of
calculation.
The
Transistor
The transistor was invented in 1947.
At that time, there were less than a dozen computers in
the whole world. These were room-filling machines, each
employing many thousands of vacuum tubes. In many
electronic circuits, a transistor can replace a vacuum
tube. Even the very first transistors were much smaller
than vacuum tubes and consumed much less electrical
power.
The invention of the transistor was
a major breakthrough in science. Its inventors were
awarded the Nobel Prize. Further research on transistors
led to the invention of the integrated circuit. The
integrated circuit has made transistors much smaller and
much cheaper. A single integrated circuit-smaller than a
dime-can now contain many tens of millions of
transistors. Worldwide production of transistors is now
well in excess of a sixth of a million transistors per
person per year, for every person on earth. This progress
in chip technology has made possible laptop and palmtop
computers.
Microprocessor
By 1968, timeshared computing was a
well-established technology. Terminals could be directly
wired to a timeshared computer, or the connection could
be made over a telephone line. In 1968, timeshared
computing using a 10 character per second (uppercase
only) Teletype terminal cost about $40 per hour.
The first integrated circuit was
developed in 1958, and the first single-chip central
processing unit (the first microprocessor) was developed
in 1971 for use in a calculator. At that time, and for
years to come, IBM was firmly committed to the mainframe
computer. The Advanced Computing Systems Division of IBM
did not envision the very rapid progress that would occur
in microprocessor technology.
The Apple
Computer
Steve Jobs and Steve Wozniak started
Apple Computer, Inc. in 1975. A number of other start-up
companies and already well-established companies began
manufacturing microcomputers at about the same time. This
all happened because of the development of
microprocessors powerful enough to be used in a
general-purpose computer.
Personal
Computers
Digital Equipment Corporation (DEC)
produced the world's first minicomputer in 1960. Although
DECs first minicomputer, the PDP-1, cost $120,000, it was
the start of a major trend away from mainframe computers
toward smaller sized, lower priced computers that could
be used in a room that was not air-conditioned. DEC was
slow to realize that microcomputers would eventually have
capabilities that rivaled minicomputers at a much lower
price. The relatively low costs of microcomputers have
opened up school use and home use as major computer
markets.
Many of the future-looking insights
illustrated in this section were made by people who were
well situated to help shape the future. In most cases,
these people eventually came to realize that their
initial forecasts had been incorrect. They then made
significant contributions to implementation of the
technologies they had first denigrated.
At the same time that some
well-situated business people are delaying acting on
possible major new technologies, others are making major
financial commitments to the new technologies. By doing
so, they shape the future. Consider the following quote
from Steve Jobs, one of the founders of Apple
Corporation:
Steve Jobs was able to translate
these insights into the creation of the Macintosh
computer, which first became available in 1984. Notice
the time lag. A rough rule of thumb in the electronics
industry is that it takes 5 years to bring an idea from
the research laboratory into the commercial
marketplace.
Worldwide
Growth in Computing Power
- Computer technology is no longer a
new invention. The year 2001 will see us celebrating 50
years since the commercial introduction of the UNIVAC-the
first mass produced computer. Computer electronics is now
a huge and still rapidly growing industry. How rapidly
will this market continue to grow? Here is one forecast
that looks 20 years into the future.
Growth in the
Electronics Industry
A 20% a year growth rate is more
than a doubling in 4 years. (If you could earn 20%
interest on your money, compounded annually, $1 would
grow to $2.07 in 4 years.) Two decades of this pace of
change would represent a growth by a factor of more than
38 in the annual dollar sales of the electronics
industry.
The 20% yearly growth rate
forecasted by Vladi Catto is a forecast of increased
dollar sales. The number of transistors and other
electronic components that can be purchased for a given
dollar amount has continued to decrease rapidly over the
years. For example, a megabyte of chip memory has
decreased in price from $550,000 25 years ago to well
under $10 today. This indicates how rapid this pace of
change has been. People in the electronics industry have
gotten used to the idea that the amount of computing
power that one can buy for a given amount of money tends
to double in less than 2 years. This rapid pace of price
to performance improvement has been going on for several
decades.
Now, let's put these two types of
change together. Over a period of 4 years, the dollar
value of worldwide productivity of chips doubles.
Meanwhile, the amount of computing power that a dollar
will buy doubles twice. This means that at the end of 4
years, the worldwide productivity of computing power has
gone up by a factor of eight. This pace of change has
been going on for many years and it appears likely to
continue for many more years to come.
Growth in the telecommunications
industry is a key and essential companion component of
growth in the electronics industry. It is a combination
of computing power and connectivity that is changing the
way that the world does business and that is going to
change our educational system.
Fiber optics, communications,
cellular telephones, and progress in data compression
(reducing the amount of storage that is required for a
document or a video also reduces the time needed to
transmit it over a telecommunications system) are all
making rapid progress.
Fiber Optic Link Around
the Globe
A 64 kilobits per second circuit can
carry a high quality telephone conversation. The Flag
project will support 120,000 simultaneous long distance
telephone calls. However, much faster transmission rates
(a much greater bandwidth) are needed for dealing with
large amounts of data, such as graphics.
Boosting Internet
Bandwidth
Another Global Telecom
Alliance
AT&T Plans $9
Billion Upgrade
These brief news items indicate that
the major telecommunications companies are investing
heavily to support continued rapid and worldwide growth
of telecommunications.
The leading electronics and
telecommunications companies of the world are committing
huge amounts of resources to increase their capacities.
This huge commitment of resources is shaping the future.
That is, we can base a number of our forecasts for the
future uses of electronics and telecommunications on an
expectation of continued rapid increases in availability
of computing power and telecommunications capacity.
We conclude this section with two
predictions about the future of networking. The first is
from Nathan Myhrvold, Senior Vice-President, Advanced
Technology, Microsoft. Microsoft is a major force in the
world's computer software industry. The second is from
Netscape president Jim Clark. Netscape is a world leader
in the development of World Wide Web browsers.
As Big as Gutenberg
- This [global networks such
as the Web] is going to be at least as big as
Gutenberg. Soon
digital networks will let
people buy anything, meet anyone, and conduct any
business over a virtual marketplace. Digitized money
will transform regional banking into a global
exchange. Third World countries will enter markets
that could never be dreamed of before.
(Nathan Myhrvold,
senior vice-president, advanced technology,
Microsoft.) Business Week. (1994, November 18).
p. 108.
Internet is
"Fundamental Change" in Telecom
Conclusions
and Recommendation
- This chapter contains a number of
examples of forecasts or predictions that proved to be
wrong. Such examples serve as a warning to people who may
want to commit major resources based on forecasts and
predictions. "Off the top of the head" predictions are
easy to make. Long-range strategic planning based on such
predictions is apt to be totally useless. The obvious
recommendation is "Look before you leap."
This chapter also contains a number
of brief news items indicating that leaders in the
electronics industry are investing heavily in the future
of their field. They are building a great deal of
increased capacity. They believe that the world is just
at the beginning of really massive growth in its use of
computer and communications technology. These large
investments in capacity building are based on careful
long-range strategic planning. The companies making these
large investments are shaping the future.
There is every reason to believe
that we are just at the beginning of massive growth in
the number and nature of computer facilities and
telecommunication facilities that are in use throughout
the world. The total worldwide amount of computing power
and connectivity bandwidth could each grow by a factor of
1,000 or more during the next two decades. (A more
detailed analysis of this assertion is given in Chapter
6.)
The message for our educational
system is clear. Students need to be prepared for adult
life in a world that has immense amount of more
information technology than is currently available.
The next chapter contains a brief
history of our educational system. The emphasis is on how
changes in technology have fostered changes in education
in the past.
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