Dynamic strategic planning for technology policy

International Journal of Technology Management

Volumn 19, Issue 3, 2000, Pages 225-245

  De Neufville, Richard ^a,b  

^a MASSACHUSETTS INSTITUTE OF TECHNOLOGY   (United States)

^b Dynamic Strat Plan Eng Mgmt P   (United Kingdom)

Author keywords

[No Author keywords available]

Indexed keywords

DECISION THEORY; ECONOMIC AND SOCIAL EFFECTS; ELECTRIC VEHICLES; ENGINEERING; PROJECT MANAGEMENT; PUBLIC POLICY; RISK ASSESSMENT; SUSTAINABLE DEVELOPMENT; SYNTHETIC FUELS; SYSTEMS ANALYSIS; TECHNOLOGICAL FORECASTING; TECHNOLOGY;

DYNAMIC STRATEGIC PLANNING; LARGE SCALE ENGINEERING PROJECTS; MYOPIC OBJECTIVES; REAL OPTIONS; TECHNOLOGY POLICY;

STRATEGIC PLANNING;

EID: 0033906733     PISSN: 02675730     EISSN: None     Source Type: None    
DOI: 10.1504/ijtm.2000.002825     Document Type: Article

References (41)

1. For some of the early developments in systems analysis, see, for example [2-4].
2. Quade, E. (1967) Analysis for Military Decisions, Rand McNally & Co., Chicago, IL.
3. Quade, E. and Boucher, W.I. (eds.) (1968) Systems Analysis and Policy Planning; Applications in Defense, American Elsevier, New York, NY;
4. Miser, H.J. and Quade, E.S. (eds.) (1985) Handbook of Systems Analysis: Overview of Uses, Procedures, Applications and Practice, North-Holland, New York, NY.
5. von Hippel, F. (1991) Citizen Scientist, Simon and Shuster, New York, NY. See especially the chapter on 'Peer review of public policy' in which he provides some interesting discussions of the difficulty the systems analysts had in recognizing the real, and subsequently demonstrated uncertainties in the demand for electric power - and the consequent need for flexibility in the pace and type of development of nuclear power, all while they were supposedly investigating risks!
6. In the United States for example, several power companies have been bankrupted by their inflexible commitment to massive nuclear power plants, such as the Washington State Power Company, the Long Island Lighting Company near New York City that spent about US $ 5 billion on a plant that was disposed of for virtually nothing, and several others. With the deregulation of the market for electric power in the United States, billions of dollars worth of investments have become uneconomical and are said to be 'stranded'. Much the same happened in Britain when deregulation of the power market occurred there.
7. Aberdein, D. (1994) 'Incorporating risk into power station investment decisions in South Africa', Master of Science thesis, Management of Technology Program, Massachusetts Institute of Technology, Cambridge, MA, USA. This work discusses the South African situation at length.
8. de Neufville, R. (1990) Applied Systems Analysis - Engineering Planning and Technology Management, McGraw-Hill, New York, NY, USA. This text provides one of many descriptions of how decision analysis applies to systems planning and design.
9. Trigeorgis, L. (1996) Real Options - Managerial Flexibility and Strategy in Resource Allocation, MIT Press, Cambridge, MA, USA.
10. de Neufville, R. and Stafford, J. (1971) Systems Analysis for Engineers and Managers, McGraw-Hill, New York, NY, USA. This textbook provides an early example of the integration of the methods of operations research into a design process for technological systems.
11. de Neufville, R. and Marks, D. (eds.) (1974) Systems Planning and Design - Case Studies in Modelling, Optimization and Design, Prentice-Hall, Englewood Cliffs, NJ, USA. This text provided a collection of examples as early as a generation ago. Recent excellent examples are highlighted by the annual Franz Edelman Prizes of the Institute for Operations Research and the Management Sciences, and are available on video and as case studies. See their web page: http://www.informs.org/
12. Ascher, W. (1978) Forecasting: An Appraisal for Policy Makers and Planners, John Hopkins University Press, Baltimore, MD, USA. This text is a classic compendium of illustrations of how forecasters are inherently unable to anticipate the surprise developments arising from new technologies, changes in the structure of an industry, and reshuffled political configurations such as the demise of the Soviet bloc or the rise and fall of the Organization of the Oil Poducing Countries (OPEC) as a determining force in the petroleum markets.
13. de Neufville, R. (1976) Airport Systems Planning and Design - a Critical Look and the Methods and Experience, Macmillan, London, UK and MIT Press, Cambridge, MA, USA. See especially Chapter 3, 'Guessing at the future.'
14. de Neufville, R. (1976) Airport Systems Planning and Design - a Critical Look and the Methods and Experience, Macmillan, London, UK and MIT Press, Cambridge, MA, USA. See especially Chapter 3, 'Guessing at the future.'
15. Lynch, M. (1996) 'The analysis and forecasting of petroleum supply: sources of error and bias,' in Energy Watchers VII, ed. by Dorothea H. El Mallakh, International Research Center for Energy and Economic Development.
16. Lynch, M. (1994) 'Bias and theoretical error in long-term oil market forecasting,' in Advances in the Economics of Energy and Natural Resources, John R. Moroney, (ed.) JAI Press. Lynch's work over many years documents the way that the consensus of forecasts on oil prices, the cost of production and the amount of oil available have all been systematically wide of the actual developments.
17. Kimura, M. (1995) 'Strategic planning for the newcomer in silicon wafer industry,' Master of Science thesis, Management of Technology Program, Massachusetts Institute of Technology, Cambridge, MA, USA.
18. de Neufville, R. and Keeney, R. (1972, 1976) 'Use of decision analysis in airport development for Mexico City', Chapter 24 in de Neufville and Marks (1974) (Note 11), and adapted from Chapter 23 in Drake, A., Keeney. R. and Morse, P. (eds.) (1972) Analysis of Public Systems, MIT Press, Cambridge, MA, USA.
19. de Neufville, R. and Keeney, R. (1972, 1976) 'Use of decision analysis in airport development for Mexico City', Chapter 24 in de Neufville and Marks (1974) (Note 11), and adapted from Chapter 23 in Drake, A., Keeney. R. and Morse, P. (eds.) (1972) Analysis of Public Systems, MIT Press, Cambridge, MA, USA.
20. Nichols, N. (1994) 'Scientific management at Merck: an interview with CFO Judy Lewent', Harvard Business Review, Jan.-Feb., pp.89-99.
21. Faulkner, T. (1996) 'Applying 'options thinking' to R&D valuation', Industrial Research, pp.50-57.
22. Hull, J.C. (1993) Options, Futures, and other Derivative Securities, 2nd ed., Prentice-Hall, Englewood Cliffs, NJ provides a textbook approach to financial options.
23. Kulatilaka, N. (1993) 'The value of flexibility: the case of a dual-fuel industrial steam boiler', Financial Management, Vol. 22, No. 3, pp.271.-279, provides a description of this case, as a specific example of the real options described in [9].
24. See for example Dewar, J.A. et al. (1993) Assumption Based Planning: A Planning Tool for Very Uncertain Times, Report MR-114-A, RAND, Santa Monica, CA.
25. See for example Cohen, J.H. (1973) 'Multiobjective analysis in water resource planning', Water Resources Research, Vol. 9, No. 4, August, pp.333-340, or de Neufville and Marks [11], Chap.21, PP.304-321.
26. Fisher, R. and Ury, W. with Patton, B. (ed.) (1981) Getting to Yes; Negotiating Agreement Without Giving In, Houghton Mifflin, Boston, MA.
27. Ury, W. (1991) Getting Past No: Negotiating with Difficult People, Bantam Books, New York, NY.
28. There are some minor exceptions to this rule, for example for emergency vehicles and for the importers of small numbers of vehicles.
29. Notice the focus on the 'drive train'. The mandate did not cover other uses of power in the car, as for climate control. Thus the 'Zero Emission Vehicle' produced by the Ford Motor Company legitimately featured an oil burning heater, together with an exhaust pipe!
30. de Neufville, R, Connors, S., Field, F.R., Marks, D., Sadoway, D.R. and Tabors, R. (1996) 'The electric car unplugged', Technology Review, Jan., pp.30-36; also published as 'Quell'auto con le batterie scariche', Technology Review, editzione italiana, Apr./May, Nos. 90/91,pp.22-29.
31. de Neufville, R, Connors, S., Field, F.R., Marks, D., Sadoway, D.R. and Tabors, R. (1996) 'The electric car unplugged', Technology Review, Jan., pp.30-36; also published as 'Quell'auto con le batterie scariche', Technology Review, editzione italiana, Apr./May, Nos. 90/91,pp.22-29.
32. Child, C. (1997) 'Dealers lease 155 EV-s in 3 Months', Automotive News, Mar. 10, pp.1 and 47; ' GM has 240-day supply of EV-1 car; had 31 leases in 2/97, vs. 76 in 12/96', Automotive News, No. 5703, p. 1 .
33. Child, C. (1997) 'Dealers lease 155 EV-s in 3 Months', Automotive News, Mar. 10, pp.1 and 47; ' GM has 240-day supply of EV-1 car; had 31 leases in 2/97, vs. 76 in 12/96', Automotive News, No. 5703, p. 1 .
34. See [8], Chapter 15, for textbook discussion of this phenomenon well-known in psychometrics.
35. Kassakian, J., et al. (1996) 'Automotive electrical systems circa 2005', IEEE Spectrum, August, pp.22-27. This article gives a good indication of what might be possible.
36. Cohen, R.E. (1992) Washington at Work - Back Rooms and Clean Air, Macmillan Publishing, New York, NY, USA. This text illustrates the kinds of negotiations that take place in an overtly political process, in this case in the context of the passage of the Federal Clean Air Act Amendments of 1990 in the United States.
37. Schnayerson, M. (1996) The Car that Could - The Inside Story of GM's Revolutionary Electric Vehicle, Random House, New York, NY, USA. This text complements the Cohen book [32] by showing the political difficulties of implementing a new technology policy within the context of a single major company, as different interest groups within the company fight over priorities and resources.
38. Oveslati, S. (1999) 'Evaluation of tested and parallel lead options: case study of Ford's investment in fuel cell technology', Master of Science Theses, Technology and Policy Program, Massachusetts Institute of Technology, Cambridge, MA, USA.
39. Hackney, J. (1997) 'Alternative fuel vehicle policy: a life cycle analysis tool for emissions, costs and energy efficiency with an application to the United States,' Master of Science thesis. Technology and Policy Program, Massachusetts Institute of Technology, Cambridge, MA, USA.
40. Hackney, J. and de Neufville, R. (1999) 'Lifecycle model of alternative fuel vehicles: emissions, energy and cost tradeoffs', Transportation Research.
41. de Neufville, R. (1997) 'Alternative fuels for tomorrow's cars', Proceedings of the 1997 World Methanol Conference, Tampa, FL, USA (Dec.), pp. 199-209.