TOWARD MORE REALISTIC FORECASTS FOR HIGH‐TECHNOLOGY PRODUCTS

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Abstract
Forecasts of demand for innovative, high‐technology products in the 1980s have usually erred on the high side, often by as much as 50 percent or more. Business decisions based on those inflated forecasts have sometimes spelled disaster: empty plants, layoffs, even bankruptcy. This article examines the problem of overoptimistic forecasting in the high‐technology arena, offers reasons for this bias, and suggests some action recommendations which can be applied by high‐tech decision makers to make forecasts more realistic. These recommendations include getting to know your market better, developing forecasting judgment, and finally, applying a “deflator” of up to 30–50 percent to forecasts that involve an abnormally high level of risk.

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