Industry Foresight: analysing changes in the business environment

Claudio Roveda
Professor of Industrial Economics and Business Administration
and President of the Centre for Technology Transfer
Politecnico di Milano, Italy
and
Vice President (Research)
Fondazione Rosselli Research Institute, Italy

Riccardo Vecchiato
Research Fellow at the Department of Management, Economics and Industrial Engineering
Politecnico di Milano, Italy

The formulation of the business strategy of a firm is intrinsically linked with the "foresight" analysis about the future of the industry where the firm competes.

Corporate foresight has already been largely dealt with in the international literature; there are many cases of either successful or unsuccessful use of foresight techniques and methods (first of all, scenario building and roadmapping). A rather autonomous research field has been developed, with a few specialised journals, such as "Futures" and "Foresight".

Today many companies, in all types of industries, continuously monitor the emerging technologies, in order to decide which should be pursued through R&D and embedded in their processes and products. Moreover, in the late '90s, foresight has been used beyond technology, as a systematic attempt to investigate the likely and possible futures of themes in economy, ecology, politics and society. The analysis of these different domains may encompass different levels: the macro one, aiming at a broadly defined industry (e.g. energy industry); the meso one, aiming at a business area or at a narrowly defined industry (e.g., the gas industry); the micro one, aiming at an investment project.

However, what still seems to be lacking is a comprehensive framework of analysis, that clearly defines how all the different foresight activities carried out in a firm could be integrated and coordinated in a synergistic and organic way.

Some key questions arise: how emerging trends, potentially able to affect and reshape an industry, can be identified? How their implications for corporate and business strategy can be drawn?

This means to consider: how should the business environment for a firm be defined? How should its investigation be carried out in order to provide really useful information for strategy decision makers, and how should this information be generated and spread throughout a firm, from corporate to business and operational units?

These are the main questions we will try to give an answer in the proposed paper, through the in-depth study of several cases of industry transformation and by means of the field research we carried out on some large international companies that established an organizational unit dedicated to foresight activities. These firms are Shell, BASF, Nokia, Philips, Siemens, Morgan Stanley, Daimler Chrysler. In depth interviews with the top executives of the foresight units were made and in-house materials were collected and analysed.

One result of our research is the delivery of some general guidelines on how to frame the definition of the business environment of any company and on how to integrate and coordinate foresight activities within a firm.

In this way, we intend to bring a relevant contribution to industry foresight, bridging the gap between strategic management theory and future oriented studies.

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