as the shale gas revolution in the United States, China’s slowing economic growth, and declining conflict in major Middle Eastern oil producers such as Libya, were all recognized secular trends that—combined with OPEC’s decision not to take concerted action as prices began to decline—came together in an unexpected way.While scenario analysis played a role in war gaming and strategic planning during the Cold War, the real antecedents of the contemporary practice are found in corporate futures studies of the late 1960s and early 1970s (Raskin et al. 2005). Scenario analysis was essentially initiated at Royal Dutch Shell in 1965, with the realization that the usual forecasting techniques and models were not capturing the rapidly changing environment in which the company operated (Wack 1985; Schwartz 1991). In particular, it had become evident that straight-line extrapolations of past global trends were inadequate for anticipating the evolving business environment. Shell-style scenario planning “helped break the habit, ingrained in most corporate planning, of assuming that the future will look much like the present” (Wilkinson and Kupers 2013, 4). Using scenario thinking, Shell anticipated the possibility of two Arab-induced oil shocks in the 1970s and hence was able to position itself for major disruptions in the global petroleum sector.Building on its corporate roots, scenario analysis has become a standard policymaking tool. For example, the Project on Forward Engagement advocates linking systematic foresight, which it defines as the disciplined analysis of alternative futures, to planning and feedback loops to better equip the United States to meet contemporary governance challenges (Fuerth 2011). Another prominent application of scenario thinking is found in the National Intelligence Council’s series of Global Trends reports, issued every four years to aid policymakers in anticipating and planning for future challenges. These reports present a handful of “alternative worlds” approximately twenty years into the future, carefully constructed on the basis of emerging global trends, risks, and opportunities, and intended to stimulate thinking about geopolitical change and its effects.4 As with corporate scenario analysis, the technique can be used in foreign policymaking for long-range general planning purposes as well as for anticipating and coping with more narrow and immediate challenges. An example of the latter is the German Marshall Fund’s EuroFutures project, which uses four scenarios to map the potential consequences of the Euro-area financial crisis (German Marshall Fund 2013).Several features make scenario analysis particularly useful for policymaking.5 Long-term global trends across a number of different realms—social, technological, environmental, economic, and political—combine in often-unexpected ways to produce unforeseen challenges.
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