Back in February 2017 I wrote a post about air travel and compared the roughly one million people in the air at any one time to a city the size of Adelaide, Australia.
The COVID-19 pandemic shot a hole in that post.
In a blink, the number of people choosing to travel by air was slashed and projections for increases in airline passenger numbers were wrong. Nobody knew how deep the reduction in air travel would go or how long it would last. Statista estimated that it would set the global tourism industry back by $1 trillion.
This is the challenging thing about predictions. Despite the historical trend, you can never be sure what will happen next.
Predictions for tourism after the pandemic were dire. As a result of all those people no longer jumping onto aircraft, many businesses were decimated.
Mothballing a tourism business may not be enough. Infrastructure needs to stay in reasonable shape. It’s one thing to close a few hotels for a few months; any longer they will begin to look decades-old and not lived in. Nobody will want to stay in musty rooms particularly if they’re paying twice the previous going rate for their airfare.
Given time the industry will recover, likely with a few new players and destinations to replace those that went out of business.
So predictions are always tricky. There’s a projection that you would like to see versus the projection that is reality. Then there’s always a black swan around the corner.
All the uncertainty around prediction creates the perception that prediction is not a smart way to do science.
A better way to predict
At sustainably FED we have a love-hate relationship with predictions.
We are wary of predictions that assume the future will reflect the past. It rarely does even though there is much to learn from historical trends.
We like predictions that reflect scenarios—situations that have a chance of happening for real. Our own afterbefore system to predict sustainable land management is built on the comparison of possible future scenarios with business as usual.
This is the best way to predict—compare options (scenarios of what could happen) with the counterfactual (what would have happened under business as usual).
This is especially useful in food production.
We can predict outcomes for food production with and without various interventions such as fertilizer inputs, pesticide use, changes to land management or husbandry, even a pandemic that causes half the lorry drivers to call in sick—all sorts of changes that are within the capability of the supply chain to implement. Even those options that are currently out of reach.
We can look at the situation of what production approaches would you adopt if there were
- high-speed transport systems into remote areas
- optimal soil carbon levels
- market price halved
- Fertiliser price doubled
Any number of scenarios around these kinds of questions.
We’ve developed the afterbefore system to be predictive and as we began prediction is always only an educated guess.
We can bound the predictions with likelihoods and we can use statistical techniques to ensure that those likelihoods have some meaning. But we are always open to not knowing the future for this is the human condition.
In 2021 the UK Road Haulage Association estimated there was a shortage of 100,000 qualified HGV drivers across the country.
Does history help?
None of the people alive prior to the industrial revolution would have predicted the technology that emerged and certainly not the number of people that now live on the planet.
We are aware that predicting forward is not only a challenge but comes with risk.
History is more reliable because at least some of the detail is recorded. We can piece together facts and understand how we got here. At least to a point.
Look backwards and we see that in the year 2000 global tourism was worth $500 billion. And as the pandemic bit value collapsed off a peak of $1.5 trillion. The growth trend over the two decades was so consistent that any projection would not have found a cliff for there was no cliff.
Reviewing the trajectory is useful, especially if you happen to be an investor or an entrepreneur looking for an angel, but history is only useful if it can do more than show trends. It has to predict the pandemic black swan.
Scenarios can reveal the black swans and in some cases even give them a likelihood. A pandemic was always going to happen. What was uncertain was when and how severe such a global event would be on, in this example, tourism receipts.
In 2021 the cruise industry partially recovered from 2020 pandemic lockdowns carrying 13.9 million passengers but this was 53% lower than the pre-pandemic levels of 2019.
What sustainably FED suggests
Try thinking scenarios once in a while.
Look at all the possible outcomes, good, bad and ugly from all the possible interventions to business as usual.
And that is where to start — the ‘business as usual’ scenario that is sometimes called the baseline.
In the case of tourism, a steady increase in global value as more and more wealth creation gives more and more people the wherewithal to travel. The project was always up because there was nothing to suggest that global wealth creation would stop or that the newly wealthy would not want to travel.
Then imagine alternatives: a doubling of wealth creation, a collapse in the global economy, virtual reality technology so good that it beats the real thing, a regional military conflict, a rogue state landing a nuclear missile…
Then think what such events would do to tourism or food production or any other of the many sustainability and environmental issues of concern.
Even a simple thought experiment is instructive.
Try it—scenarios might surprise you.
Hero image from a photo by Josiah Weiss on Unsplash