Horizon Scanning – Have You Heard of It?

The Small Business Blog

4 years ago

By Dene Stuart

In a meeting last week the person I was talking used the term “Horizon Scanning”, I hadn’t come across this before. It has a military derivation, coming from the necessity to scan the horizon for possible threats.

SWOT analysis is one of the oldest and most well known and frequently used planning tools; for anyone who hasn’t used it:

S = Strengths
W = Weaknesses
O = Opportunities
T = Threats

So Horizon Scanning has been a fundamental to good planning for many years, even if it wasn’t always called that.

What makes it more important now than ever before is the pace of change and the impact of that change on our lives and our businesses.

We only have to go back 30 or so years to be in a period when there was time to see potential threats on the horizon and formulate a plan to deal with them. Successful businesses and people have always done this but in years gone by there was much more time, for those with less foresight, to be able to react and defend against these potential threats.

That has been changing for some years now and the sheer number of new innovations, initiatives and ideas that are streaming over the horizon makes it very difficult to know which is a threat, which is friendly and which is not going to be relevant to you and your business.

It is the internet that is making this possible. Not only is it making it possible to access information more easily but it also allows access to cheaper labour markets, making the barriers to entry that much less than in those bygone days of the 1980’s (30 years ago).

Information from the American patents office shows the growth of patent applications

1880: 12926
1890: 25308
1900: 24656
1910: 35130
1920: 37057
1930: 45226
1940: 42237
1950: 43039
1960: 47169
1970: 64429
1980: 61819
1990: 90365
2000: 157495
2001: 166039

You can see from this that in the 100 years from 1880 to 1980 the number of patents applied for increased by approximately 50,000 per year to 61,819. In the 20 years from 1980 to 2001 (latest data I could find easily) applications increased by over 100,000 per year to 166,039; and we have to assume that in the 12 years since that data was compiled that it has increased again.

To put this in the context of Horizon Scanning it means that there are a huge number of new “things” coming over the horizon and as soon as they are over the horizon and coming towards us there are even more replacing them and coming at us even faster.

We can think easily of the effect that Facebook, Google, Amazon, Ebay have had in the last ten years. I have personal experience of family businesses that had traded for tens and tens of years that could not cope with these developments and went out of business; and of people whose skills similarly became redundant.

To be effective in this world we have to develop radar for the developments that are coming over the horizon that are going to affect our lives and businesses.

There is an old saying that there is nothing as useless as yesterday’s newspaper (EU rules mean we can’t even wrap our fish and chips in them any more).

Well the same is now true of us as people and our businesses. The question we have to ask ourselves is: “Are we good enough to compete with what’s coming over the horizon?”

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Previously published on sme-blog with Creative Commons License

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