Introduction: The Need for Strategic Foresight

The U.S. government has long found itself at the mercy¹ of what Dean Acheson called “the thundering present.”²

There is widespread agreement—from scholars and practitioners, from the private sector and the public sector, from liberals and conservatives—that U.S. policymakers are too focused on short-term gains at the expense of the long term. Researchers have observed this bias in a slew of domains—from the budget to infrastructure to climate change—and cataloged the damage it has wrought.³ Politicians lament that decisions made today are doing a disservice to future generations, and CEOs remind us that focusing on the short term to the exclusion of the long term is bad for both national policy and business.⁴ The tendency to discount the future not only reduces economic performance, threatens the environment, and undermines national security—to name but a few consequences—it also leaves the United States vulnerable to surprise and limits its ability to respond to crises, a failing on stark display in 2020 and 2021 as the nation has struggled to combat the COVID-19 pandemic after underinvesting in its public health infrastructure.⁵

Lest this myopia be seen as a function of government inefficiency or ineffectiveness, it is worth noting that the situation in the private sector is no better and by some measures worse. Despite a sense that firms should aim to create long-term value,⁶ many companies privilege the short term over the long. For example, to meet quarterly earnings expectations, CEOs often forgo projects that have a positive net present value.⁷ Such behavior has prompted decades of concern about short-termism’s drag on the U.S. economy, and recent studies show that long-termism does, in fact, improve performance.⁸ One such report found that, if companies were more oriented toward the long term, they could reap an additional $1.5 trillion in return on invested capital.⁹ Larry Fink, the CEO of BlackRock, the world’s largest asset manager, has frequently lamented the dangers of short-termism¹⁰; the Business Roundtable issued a statement in 2018 saying that “short-termism is unhealthy for America’s public companies and financial markets”¹¹; and the following year, 181 American CEOs committed to “generating long-term value for shareholders.”¹²

This complaint of short-termism, public and private, is striking in its persistence, its breadth, and its unanimity. It is difficult, if not impossible, to find anyone who thinks that organizations and their leaders are too farsighted, and concern is growing as the present seems to clamor for evermore attention even as awareness of long-term dangers rises.¹³ As the Financial Times put it, “By early 2020, short-termism was being attacked by everyone from executives at Davos to environmentalists at not-for-profit groups such as the World Wide Fund for Nature.”¹⁴

The question is, what can we do about it?

To answer that, we must first understand why public and private organizations choose to prioritize the present at the expense of the future.¹⁵ Business scholars cite investor priorities, executive compensation, shareholder activism, and earnings expectations,¹⁶ while political scientists note that democracies incentivize politicians to focus on the costs and benefits of the current electoral cycle; the concerns of voters, who eschew short-term pain and insist on immediate results; and the demands of special-interest groups, whose objectives can undercut efforts at more sustainable policy.¹⁷ Researchers also cite the tyranny of the in-box, the relentlessness of the news cycle, and the press of social media.¹⁸

Advocates of long-termism generally focus on ameliorating such pressures. Business researchers have suggested changing incentive structures by eliminating the demand for quarterly earnings guidance¹⁹ or by altering the structure of CEO compensation.²⁰ And there are many proposals that would encourage policymakers to accord greater value to the future: legally mandating that they safeguard the interests of future generations; strengthening the voting power of the young, and weakening that of the old (one recent proposal suggested making the voting age zero)²¹; and granting legislators more time in office and requiring them to set long-term goals. There are even proposals to establish a “Secretary of the Future” or, internationally, a “UN High Commissioner for the Future.”²² These remedies share a common goal: incentivize decision-makers to pay more attention to the long term by amplifying its salience.

It is an intuitive solution. Attention to the future would seem to be a prerequisite for appropriately valuing it. But implicit in these remedies—implicit in the idea that policymakers would more accurately value trade-offs between the long and short terms if only they could escape the noise of the present—is the belief that it is possible to see the future clearly. After all, every policy is effectively a prediction that a certain government action will have a certain effect, so arguing that longer-term policy would be better policy assumes the ability to accurately foresee those effects. The suggested fixes for short-termism, therefore, equate long-termism with prediction, which is to say they conflate thinking about the future with knowing the future.

Yet thinking more about the future is obviously no guarantee of accurate anticipation. One could slow the pace of elections and abolish Twitter, but the future would still become less certain the further one moved from the present. Although it is possible to attach meaningful probabilities to political and economic events in the short term,²³ the amount of uncertainty increases with the length of the time horizon,²⁴ degrading our predictive abilities to the point where we are nearly guaranteed to be surprised by some events 10 years or more into the future.²⁵ (See below: Change Over 10 Years)

Absent the ability to predict the long run, a focus on the short run is not simply a function of incentives. It is an understandable, if unfortunate, way to cope with uncertainty. Organizational scholars Richard Cyert and James March argue that firms “avoid the requirement that they correctly anticipate events in the distant future by using decision rules emphasizing short-run reactions to short-run feedback rather than anticipation of long-run uncertain events.”²⁶ Given the option, corporations tend to concentrate on exploiting existing capabilities, engaging in suboptimal levels of exploration—i.e., they concentrate on incrementally improving the widgets they make at the expense of thinking about what widget they should make next.²⁷ Put differently, they sacrifice the future for the present because it is more controllable. As March wrote, exploitation dominates in companies because its “returns are positive, proximate, and predictable,” whereas the wages of exploration are “uncertain, distant, and often negative.”²⁸

The same is true of public policy. Political scientist Jonathan Boston asked, “Why … are policymakers willing to inflict potentially significant costs on those living in the future for short-term advantage?”²⁹ His answer:

Many policy problems … exhibit a cost-benefit asymmetry: governmental action to address them requires the imposition of short-term costs, yet most of the benefits accrue later. Moreover, while the costs are often relatively direct, certain, visible, and tangible, the benefits are less direct, more uncertain, less visible, and perhaps intangible.³⁰

If a focus on the (more predictable) short term is a mechanism for coping with the uncertainty of the long term, then attempting to cure short-termism by increasing the attention devoted to the long term is nonsensical, reinforcing the very problem it is designed to avoid. Earnest calls for more long-term thinking are effectively calls for policymakers to take on more uncertainty when uncertainty is the very thing policymakers are trying to avoid. One might as well suggest that a house-bound agoraphobe spend more time in open spaces. The prescription conflates the cure with the disease. To the extent that the challenge facing policymakers is formulating strategy under uncertainty, encouraging them to focus on the long term begs the question. The necessary question is not (or not only) how much to think about the future, but rather how to think about the future when prediction is not a fruitful option.

It is a question made more vexing by the need to simultaneously attend to the present. After all, the short term is not merely a refuge from uncertainty. Surviving the short term is a prerequisite for thriving in the long term. This challenge, too, is qualitative as well as quantitative. It is certainly true that organizations must appropriately balance the amount of exploration with the amount of exploitation. (Per Daniel Levinthal and James March, “The basic problem confronting an organization is to engage in enough exploitation to ensure the organization’s current viability and to engage in enough exploration to ensure future viability.”)³¹ But, the bigger problem is that these activities are thought to be in tension: Exploration and exploitation are different activities that demand different ways of thinking and different organizational structures, and therefore, the need to do both ostensibly creates a paradox.³² In addition to asking how firms think about the future, we must therefore also ask how they do so while still attending to the present.

Unfortunately, the disconnect between present and future is only going to widen. The world is becoming more volatile, uncertain, complex, and ambiguous.³³ There are many reasons for this, including the increasing speed of technological change and the growing degree of interdependence, whereby the variables that define our economic, social, and political systems have multiplied and developed greater potential to affect other variables. This means that the amount of irreducible uncertainty—the number and range of future phenomena to which we cannot assign meaningful probabilities—is going to grow. Changes in the short term are likely to become ever-more salient—the present is not going to quiet down—even as the long term becomes murkier. Although the sophistication of predictive technologies may increase, the only certainty is that there will be surprises.

For American policymakers, then, the question is, how can the U.S. government get beyond the thundering present? How can it appropriately value and invest in the long term, given the demands of the short term? How can the U.S. government deal with the uncertainty of the long-term future, given the inherent limits to prediction and planning?

This report proposes that one answer is the practice of strategic foresight, specifically the imagination of alternative futures to better sense, shape, and adapt to emerging events. Strategic foresight methods, such as scenario planning, are intended to loosen participants’ assumptions and encourage the development of more robust strategies, thereby improving resilience to rapid change. Strategic foresight assumes a high degree of future uncertainty, and by providing structured methods for engaging with the uncertainty of the long term, it enables more constructive thinking about the long term, while simultaneously providing a mechanism for gleaning short-term insights. That is, it addresses how to think about the uncertainty of the long-term future while also acting in the present.

Unfortunately, the United States has no whole-of-government mechanism for strategic foresight. As Leon Fuerth, the national security adviser to former Vice President Al Gore, has written: “There is no mechanism at the national level for bringing foresight and policy into an effective relationship. The absence of such a system impairs the ability of the government to think and act strategically.”³⁴

To illustrate what a successful strategic foresight effort looks like, the next section of this report examines the case of the U.S. Coast Guard’s Project Evergreen, a series of scenario planning exercises that have been used to inform strategic planning. The subsequent section examines strategic foresight—as distinct from strategic planning—in the U.S. national security establishment. It maintains that operations frequently crowd out planning, that the planning there is frequently fails to influence operations, and that much of what passes for strategic foresight is (less impressively) contingency planning. The chief exception is the Global Trends report, which the National Intelligence Council produces every four years. However, as an intelligence community product, that report makes no policy recommendations, and it is unclear how much influence it has on policymakers. Overall, the upper echelons of the national security establishment have seemingly failed to integrate the uncertainty of the future into high-stakes decisions, even though at lower levels, there is significant attention to alternative futures, particularly within the Department of Defense.

Although much of this report concerns foresight in national security, many of the U.S. government’s most promising foresight efforts are occurring in civilian departments and agencies. The penultimate section provides an overview of such initiatives, including four snapshots of new or newly expanded foresight efforts that suggest a growing interest in the method across the federal government. The report concludes by recommending that the president take advantage of this momentum to establish a whole-of-government foresight effort through an advisory body that would report directly to him.