I am amazed at how many of us fall into the trap of linear thinking. Almost nothing in life follows a linear pattern – and yet we continue to act as if everything will.
I left the cult of linearity years ago. Back when the cult leaders – IDC, Gartner and other forecasters would – with a straight face – predict that IT markets were going to grow exponentially following their fast introduction. I was involved with e-Learning for awhile and these guys were projecting outrageous growth – that never materialized. They are still going strong. In the Economist this week, they are predicting there will be 2 billion smart phones sold per year by 2015. Where are we going? 20 billion smart phones by 2020?
I still remember the so-called experts in 1998-1999 talking about the ‘10,000’ NASDAQ. That didn’t work out so well. More than a decade later the NASDAQ is 2,479. At this rate, the NASDAQ will reach 10,000 in 2100.
And then there were the gurus of world trade. We had these discussions in the mid 2000s around the Atlantic Gateway. Experts were telling us that trade into North America was going to triple or quadruple within a generation. I remember thinking at the time – how much more disposable crap do we need? My daughter already had more than 20 dolls and my son 40 or more video games.
Of course the whole housing bubble in the US and the financial crisis were predicated on this notion that things were going to continue in the direction in perpetuity.
Even in New Brunswick, people think that things will continue on the same trajectory. The only thing I know for sure is that things will not.
The problem is there seems to be no penalty for not being able to predict. Jim Kramer boasted that BearStearns was a solid investment -right up until the point it wasn’t.
The guys at Freakonomics looked at the ‘science’ of prediction and found that across the board most experts are never right much more than 50 percent of the time. In other words, about as good as random guessing.
We need to try and project future scenarios so that decision makers can make decisions based on a range of potential outcomes.
But I would urge you not to put too much faith in these predictions and remember the oldest of axioms – if it looks too good to be true……