Has horizon scanning failed the public sector by its inability to scan the financial crisis?

In 2008, I attended The February meeting of the FAN Club (Future Analysts Network).  This was a meeting jointly hosted by Foresight Horizon Scanning Centre and the Cabinet Office’s Strategy Unit. The meeting was there to discuss the horizon scanning work Realising Britain’s Potential: Future Strategic Challenges for Britain,

I look back on this document, and the discussions, and realize that no one was talking about the pending financial crisis. The obvious signs of that crisis were only emerging, yet horizon scanning should have been picking these up.  In addition, one could argue that a horizon scan is looking to 20 or 30 years, when the current situation is a distant memory.  [For the purpose of this post, I am using horizon scanning both as a specific tool and as description for any futures work.]

The future is not already here!

What it taught me is that William Gibson’s statement “The future is already here. It is just not distributed evenly”, does not apply to all forecasting because so many aspects of the future were still to unfold.  The financial bubble had just broken but people did not realize how far it would reach, its depth, or its full effect. In that sense, the future was not yet there nor was it ready to be distributed.  What had horizon scanning had failed to was to fulfil Gibson’s remark.  The horizon scanners, especially in public service, had failed to see the signals and understand the possible futures it was suggesting. For me, two fundamental questions emerged from this episode.

Why did public sector horizon scanners miss the crisis?

First, why were the antecedents to this crisis not picked up within any horizon scanning or forecasting by the public sector?  For example, on the Sigma scan site at that time the financial crisis and its effect on public service within the UK was not discussed. The Sigma Scan is a searchable repository for horizon scanning papers, designed for government users. It was created by the Horizon Scanning Centre with interviews, studies, and questionnaire of top thinkers condensed into 250 short papers to challenge assumptions and spark ideas.

To be sure, if no one is looking for it, it will not be found. In one sense, an emergent crisis falls between short-term analysis (the next 3 months or less) and long-term horizon scanning (20+ years) financial firms may be looking for such signs and indicators with regard to the markets or their share prices.  However, they may have a short-term focus and not a proper horizon scanning approach.  What this may show is that horizon scanning, by its very nature, will be blind to some topics.  One has to note that horizon scanning is not the same as forecasting and even forecasters are focused on a specific topic (weather, stocks, and technological innovation) and not a horizon. See for example Paul Saffo’s excellent article on six rules for effective forecasting.  Perhaps, the lesson is to consider forecasting tools with horizon scanning tools. For example, see the tools offered by the Horizon Scanning Centre.

Is horizon-scanning best left to people who use it?

The second question though is immediate and direct. Does horizon scanning have a role in government?  Aside from missing the largest crisis to face public service within the UK within a century, horizon scanning seems to be of limited use to politicians and other decision makers.  For example, one struggles to find any reference to scenario planning or backcasting, or the fifth scenario tool used with the UK government’s manifesto for example, its Big Society idea.  If such work has been done, it has not been published.  If it is not published, or is only available within the government, how can the public judge the potential of any proposed policy?  In effect, the politician makes promises about a rosy future (jam tomorrow) yet the basis for this is often assumed or rarely contested.  Was there a scenario plan done with different future societal outcomes for decreased public sector spending on the different strata in society?

In a sense, back casting should help us to understand the future because it works backwards and can help us forecast better.  For example, the extent to which the UK economy, and by extension, local government was dependent upon funding from the central government that was aligned to the growth of the City. To put it quite simply, the UK government tied its economic growth between 1997 and 2008 to the emergence of London as a financial centre and its revenue streams.  The increasing returns, as the city became more and more important to the GDP, allowed the Government to expand public sector spending including that of local government.

When the financial crisis, ruptured that relationship, it should have been reasonable to see that the funding streams to the public sector would change.  An immediate horizon scan would suggest that organisations should be doing scanning to consider the scale of the cuts and its effects. Here horizon scanning and forecasting would come into their own.  The question in itself was not surprising because all the major parties were talking about significant changes in spending (disagreements over the speed and depth aside).  Yet, the forecasts and the scans do not seem to have picked explored this although scenario planning may have had a good effect in sketching possible outcomes.

The ability to understand the future effects of current policy decisions is vitally important to all forms of government. For example, some councils in the UK had to restate their approach to the government funding reductions because they had miscalculated what the government settlement might be.  In those instances, one wonders if the Councils that performed better had better scenarios mapped out or whether they guessed right, or just had better political knowledge.  Although the LGA has done work in this area, there is no evidence that any of the successful councils used futures work to deal with reacting to the reduced public sector funding.

If that is the case, I wonder if any local government horizon scanners or forecasters had developed their own forecasts.  The LGA has done some work in this area with some horizon scanning work.

What do the current horizon scans tell us?

In 2010, after the election did anyone make a horizon scan or a scenario to answer the following question. “What is the future of public service in 5 years?”  If the politicians propose a potential outcome (paint a scenario), one would hope some sort of horizon scanning informs its.  What may be the case is that politicians are captive to the moment and cannot shape their futures as much as they believe they can.  What is particularly interesting is that UK government policy is supposed to be guided, or at least informed, by strategic futures analysis.

Does jam today trump bread tomorrow?

The middle ground between immediate policy demands and the horizon of 20 years is caught by politics.  In other words, there is too much noise to filter (politics and political bias) to find signals.  If that is the case, then is horizon scanning and forecasting left to speculate and not inform? The counter argument would be that horizon scanning has never been tried because such analysis is always secondary to political concerns.  What is certain is that the tools for forecasting and horizon scanning are important. What remains to be seen is whether political judgements can ever attain the wisdom needed to use them appropriately.

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About lawrence serewicz

An American living and working in the UK trying to understand the American idea and explain it to others. The views in this blog are my own for better or worse.
This entry was posted in change managment, information management, innovation, learning organisation, local government, path dependency and tagged , , , , , , , . Bookmark the permalink.

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