Decisions, decisions
“Decision problems come in two kinds: risk and uncertainty. Risk applies to situations that are well structured and stable, such as gambles, lotteries, and cancer screening, and has been tamed by the probabilistic revolution in the sciences since the beginning of the 17th century. Uncertainty applies to situations that are ill structured and instable, such as human interaction, investment, and business.”
Max Planck Institute for Human Development[1]
The Max Plank Institute viewpoint above is important for the practice of foresight projects. Foresight is the structured exploration of the possible future. The possible future is an infinite rather than calculable space. Foresight work often involves narrowing down that space of infinite possible futures to a useful few.
Possible futures in foresight are known as scenarios – and we really enjoy building these out, both with our experts at Imperial and our Imperial Business Partners.
The problem of constrained scenarios
While foresight can integrate numerical evidence, such as projections of statistical trends, too much will constrain the possibility that can be explored. At worst, scenarios of the possible future become limited variations of the present, projected forwards and driven by data divergences.
The outcome of constrained divergence scenarios is that they are explorations of risk rather than unusual circumstances of uncertainty.
So why is the uncertain future important? Shouldn’t we be looking to quantify and predict more of what’s to come to make better decisions now?
The value of the uncertain future
Considering the uncertain future leads to being able to identify new opportunities, directions of experimentation and, paradoxically, a reduction in risk. Risk is reduced through the inclusion and examination of novel future scenarios as it prompts thinking of ways to cope with unexpected problems or new advantages.
In foresight, inputs to scenarios typically follow a scan of change across the domains of STEEPV being Society, Technology, Economics, Environment, Politics and Human Values.
Where scenario planning leans towards evidence there can be an overemphasis on Society, Technology and Economic domains. These are more probabilistically explored than Environmental, Political and Human Value shifts.
This uncertain realm is where the unthinkable can be found, for example limited wars breaking out that radically shift energy supplies.[2]
Certain future scenarios for the National Grid
Is there an example? Take the UK National Grid Future Energy Scenarios 2021[3] aimed at laying out a path to net zero carbon emissions by 2050 for the UK. Professionally produced, detailed, populated with strongly grounded evidence and well presented. They are a set of four probable future scenarios.
- ‘Steady Progression’ is an extension of the present
- ‘System Transformation’ is a progression with hydrogen for heating but with lower general energy efficiency. Here Consumers are less inclined to change behaviour.
- ‘Consumer Transformation’ is also a progression with electricity for heating and higher energy efficiency. Here Consumers are more inclined to change behaviour.
- ‘Leading the Way’ the most aspirational future of significant consumer behaviour and a mix of hydrogen and electricity heating.
They provide a set of grounded, evidence-based scenarios which address the known challenges and strategies that the National Grid currently faces, and are palatable and broadly optimistic, but that do little to explore more radically divergent futures that provoke uncomfortable but useful considerations.
So how can we strengthen them?
Uncertain scenarios: Helping the National Grid prepare for an unknowable future
The National Grid scenarios are weak on the less probabilistic domains; Environmental, Political and Value changes. Let’s consider a couple of less evidence-based but still plausible scenarios that could be part of the National Grid scenarios.
- ‘The Lights go out’ is a darker future where ongoing weather patterns make renewable energy sources untenable, consumer behaviour change has failed to produce significant energy savings and international energy supplies are erratic due to ongoing de-globalisation (re-ordering of economic power) are failing to deliver. How would we cope with a future of energy poverty after today’s technologies prove inadequate in the future?
- ‘Shading our Eyes’ is a brighter future where, through a pathway of SMRs (Small Modular Reactors) to practical scalable fusion energy, the energy needs are generally satiated for commerce and consumers. The UK has energy abundance, energy independence and so do all countries i.e., energy export is not a significant input to the economy. What opportunities are there when we have an energy abundance through the mass deployment of today’s theoretical technologies?
What value do these less certain scenarios have for future proofing?
The value of uncertain scenarios
Our less evidence-based and speculative scenarios help to de-risk, or future-proof, the future of energy. By considering outlying possibilities we can start to construct productive pathways for when our speculation goes awry.
- In the case of energy paucity, strategies for energy demand reduction can be made. For example:
– through policies that offshore the production of physical goods that require high energy to create.
– shifting production to countries with more stable energy supplies in the face of climate change – which could be also have implications for addressing or worsening inequality around the world.
– by being active in forums for more extreme measures for carbon pollution mitigation such as geoengineering. - In the case of energy abundance, strategies for maximising the gain can be employed. For example:
– re-shoring production activities that call for high energy to perform,
– maintaining electricity international interconnectors for grid resilience,
– removing historic grid infrastructure through promoting over-the-air power transmission.
These two simple and less-certain scenarios provoke strategic preparedness that can be deployed in other energy paucity or abundance future scenarios.
These scenarios may come about for different reasons but have value in preparing for them. For example, energy paucity may come about as the carbon waste produced in transitioning an economy fails to reduce carbon production.
In the case of abundance, another energy source may emerge that is not even conceived of yet from orbital exploration (Orbital solar power)[4] or, due to global conflict, consumer behaviour radically shifts to a domestic orientation.
The case for a mixed bag of scenarios
The case here then is that, yes, there is value for evidence-based scenarios. Scenarios that are certainty based to manage planning and execution.
There is also a case for more speculative ones that provoke increased risk mitigation and opportunity maximisation strategies.
Eating your own dog food?
In software development there is a practice called ‘dog fooding’. This is where developers use the tools, they are producing while doing their work. In Imperial Tech Foresight we take a similar approach.
In our 2041 Scenarios we included the use of Quantum Computing and Fusion Energy even though today there is evidence of their scalability. We pushed out their global impact in our Unknowable scenario.
By doing so we could think of a world of abundant computing and energy and how organisations could operate differently. By doing so we could develop strategies that could be used if computing and energy abundance came from other sources.
Why is this interesting?
If you are going to commission foresight work that includes a set of scenarios, they should include in some speculative elements. Elements or even more thoroughly developed scenarios.
These elements will bring more robustness and resilience than more evidence-based work alone, and they combine constructive and directed lateral thinking with effective storytelling methods – all of which helps explain a possible future to those whose job it is to make decisions in the here and now.
[1] The Heuristics Revolution – Gerd Gigerenzer at Summer Institute 2018, Max Planck Institute for Human Development https://www.youtube.com/watch?v=v2SDBbtFp3c
[2] The Russo-Ukrainian War https://en.wikipedia.org/wiki/Russo-Ukrainian_War
[3] National Grid ESO https://www.nationalgrideso.com/future-energy/future-energy-scenarios/fes-2021
[4] https://spectrum.ieee.org/solar-power-from-space-caltechs-100-million-gambit