Why Do Future Forecasts Almost Never Come True?

We should never trust them

If you’re an entrepreneur, you must think about the future. Businesspeople spend their days investing time and effort in the things that will bear fruit months or even years later.

To do so, you need a theory about the future, a picture you believe in. And the easiest way is to make a forecast or use someone else’s.

But it never works. And if you base your strategy only on forecasts, chances are you’ll fail.

Making the correct forecast is impossible. Nature hasn’t created us for that.

Can we see the future?

One hundred years ago, Charles P. Steinmetz, an American scientist,?predicted ?that by 2023 electric power would create a paradise in which humans would be free from hard labor.

“The time is coming at the present rate of world progress when there will be no long, back-breaking drudgery, and when people will work not more than four hours a day,” he said in 1923. “The rest of the time, we will be able to follow our natural bent.”

Isn’t it the same thing as some of today’s prophets promise us about AI? Unfortunately, as you can see, Steinmetz’s prophecy hasn’t been fulfilled.

It was the forecast for 100 years, so no wonder he made a mistake. But people can’t foresee even the nearest future. Actually, we can’t foresee any future.

Problem #1: We can’t see an elephant as a whole

In an old parable, a group of blind men who had never come across an elephant before tried to learn and imagine what the elephant was like by touching it. Each of them felt a different part of the elephant’s body, but only one part, such as the side or the tusk.

They then described the elephant based on their limited experience, and their descriptions differed.

The world is large and complex, whereas our mental capacity and lifetime are limited. Hence, even if we learn something new daily, we die with only a little knowledge of the world. We know a little about one part of the “elephant,” and our theories differ.

If you are 29, you live in Los Angeles, and work in IT, you see the world completely differently from how a 54-year-old loader from Berlin does. If you’re a young mom from Brazil, the word “world” means not the same to you as to a 62-year-old man from Japan.

And our background influences our future thinking. Our brains use?the same neurons ?to envision tomorrow they involve remembering the past. So technically, we don’t “think” about the future — we “recall” it.

That’s why it is relatively easy to imagine how you’ll spend the upcoming weekend than how you will live in 2033. The nearest weekend will most likely be similar to many past weekends.

Your assumptions about tomorrow are your memories projected to the future.

And the?na?ve realism?cognitive bias is also not of much help. It is the “belief that we see reality as it really is — objectively and without bias, which is not true, of course.

It is an excellent cocktail for making wrong future predictions:

1. We have sketchy and incomplete knowledge of the world;
2. We base our future assumptions on our biased worldviews and personal memories;
3. We overestimate our ability to see the world as it is.

No single mind can see the world in its whole complexity. But how about if many smart people join forces, could they achieve a better result? I doubt that.

1. Nobody predicted the 2008 economic crunch, but it occurred.
2. In 2017, many people foresaw the dawn of blockchain technology and cryptocurrencies, but it never happened.
3. Nobody predicted COVID-19, but the pandemic took place.

The problem is that people tend to team up with like-minded people.

Problem #2. Enthusiasts and cowards

2020 was the finest hour for Peloton, an American company that sold exercise bikes and treadmills connected to the Internet with built-in screens. A user could run on a treadmill at home while watching a special video program by a professional fitness trainer or celebrity.

In 2020 the company’s popularity soared because of lockdowns. Peloton founder and Chief Executive John Foley?said , “We saw a massive surge in our sales.”

I learned about Peloton at that time from an article in a business magazine. The article proclaimed a “new era of goods and services,” and Peloton was demonstrated as a perfect example.

The author was visibly happy to inform readers that “the world will never be the same again.” And she was not the only one.

Business prophets and analysts firmly claimed that our world would “turn online” forever. We would never get back to offices, they asserted. We would never go on business trips again, they affirmed. The old-fashioned brick-and-mortar stores would disappear, and we would buy things online only, they said.

I am writing these lines in May 2023. If you had fallen asleep in 2019 and woken up now, you would hardly believe that the world has recently gone through a severe epidemic.

The world has changed, but not that much.

Peloton’s heyday seems to be behind it. Americans?returned ?to gyms, and Peloton’s shares have?fallen ?59% over the past 12 months. The fairy tale is over.

It happens time and again because two types of people make the most notable forecasts — novelty-seekers and people who are afraid of the future.

Novelty-seekers

I am sure you have a friend who adores anything new — new phones, cars, software. Some of such people are tech geeks or nerds, but this isn’t necessarily. They are always the first to taste new food, watch a new series, and buy a piece of newfangled close.

E.M. Rogers, the Diffusion of Innovation theory creator, called them “early adopters.” Fans of this trait call it “neophilia.” These people are in a perpetual search for dopamine, the hormone responsible for the excitement of meeting something new.

If you ask them to predict the future, they will paint you a picture in which robots and AI do all the work, all the people write poetry and play guitars, and the trip to Mars takes less than an hour.

As a strategic practitioner, I read a lot about the future, and I’ve seen hundreds of such forecasts. I believe Charles P. Steinmetz belonged to this type of person.

“It can lead to antisocial behavior,”?says ?C. Robert Cloninger, the psychiatrist who developed personality tests for measuring this trait. “But if you combine this adventurousness and curiosity with persistence…, then you get the kind of creativity that benefits society as a whole.”

Such people often become entrepreneurs. They hate routine, they are very curious and knowledge-hungry. They often write articles and blog posts or give interviews where they share their visions of the future.

So, if you read a piece of content about the nearest future in which AI can cure all diseases and uncover the secrets of eternal life and happiness, it is highly likely written by one of these enthusiasts.

And as the?positive bias ?is often their second name, they see the future through rose-colored glasses — unlike their antipodes.

People who are afraid of the future

Our features didn’t arise by accident. We are the fruit of evolution, most of which took place long before the first iPhone was invented. And we inherited more traits and reflexes from our ancestors than we realize.

And one of them is the fear of uncertainty. Our forebears who lived in forests and jungles firmly knew that the familiar is good and the unknown is bad. Saber-toothed tigers ate their too-curious brothers and sisters, who recklessly rushed to explore new dark caves and holes. So, these explorers didn’t convey to us their genes, and we are descendants of their more careful counterparts.

We are not that brave. We are afraid of uncertainty and, thus, the future. So, when we read that AI will take our job, most of us don’t get excited. Instead, we break out in a sweat of fear.

So, some people are happy to paint a gloomy picture of the future for us.

• Some of them are the same as we are. They are scared by the changes around them and write about them in the unconscious hope of drawing attention to them. And, as the?negativity bias ?is their second name, they sometimes blow things out of proportion.
• Others are cynical hustlers who know our weaknesses very well and who want to earn money or gain popularity by scaring us.

Why do we believe them anyway?

So, the media is full of biased judgments about the future. People who can’t predict their own behavior try to foresee the fate of humanity. Why do we read them and often believe in them?

Because we’re wired to avoid uncertainty. We read these articles for the same reason that other people write them. We open newspapers every morning in a futile hope that somebody else knows more about our future than we do.

But the sad news is that nobody ever knows anything about the future — simply because it doesn’t exist. Some people make the right predictions, but a stopped clock is right twice a day.

Once there was a YouTube prophet, a man who made bold economic outlooks twice a week. The reality proved his projections wrong time after time. Professional economists and journalists unmasked his ignorance many times. But the number of subscribers grew by the day. He gave them hope, and they trusted him no matter what he said.

What can we do instead of reading the wrong forecasts?

Entrepreneurs must remember that the future is unpredictable, but it is creatable. We live in a world where everything except mountains, forests, and seas is created by people. People build our world day by day, step by step.

Future is not an episode of a series that has already been filmed but isn’t available right now. The future will be the one we want.

That’s why I don’t rely too much on forecasts in my strategic work. Instead, we play foresight games with my customers. And our goal is not to guess or predict the future but to create a plausible future scenario that we would like to build.

If you want to learn more about foresight games, visit my?website .

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