Cross Impact Analysis

Cross-impact analysis is a methodology developed by Theodore Gordon and Olaf Helmer in 1966 to help determine how relationships between events would impact resulting events and reduce uncertainty in the future. The Central Intelligence Agency (CIA) became interested in the methodology in the late 1960s and early 1970s as an analytic technique for predicting how different factors and variables would impact future decisions. In the mid-1970s, futurists began to use the methodology in larger numbers as a means to predict the probability of specific events and determine how related events impacted one another. By 2006, Cross Impact Analysis matured into a number of related methodologies with uses for businesses and communities as well as futurists and intelligence analysts.

The basic principles of Cross-impact analysis date back to the late 1960s, but the original processes were relatively simple and were based on a game design. Eventually, advanced techniques, methodologies, and programs were developed to apply the principles of cross-impact analysis, and the basic method is now applied in futures think tanks, business settings, and the intelligence community.

Theodore J. Gordon writes that cross-impact analysis was the result of a question: "can forecasting be based on perceptions about how future events may interact?"

The first format of the method was a card game titled Future, where events were determined by probabilities, a special die, and impacts from previously played events. This initial game format of cross-impact analysis was programmed for computers at UCLA in 1968. From this point on, the methodology underwent increasing development and sophistication to meet certain needs and conditions of users.

As cross-impact analysis expanded in the early 1970s, researchers and futurists modified the basic principles to improve on the methodology. In 1972, researchers at The Institute for the Future added time-series instead of "Slice of Time", Norman Dalkey used conditional probabilities, and Julius Kane developed "KSIM", a simulation technique that used interactions between time series variables rather than events. In 1974, Duperrin and Godet developed Cross Impact Systems and Matrices (or SMIC) in France for prospective forecasting studies.

Advancements in simulation models continued into the 1980s. In 1980, Selwyn Enzer at the University of California incorporated Cross Impact Analysis into a simulation method known as Interax, The Delphi technique was combined with Cross Impact Analysis in 1984, and researchers at Texas A&M University used Cross Impact in a process called "EZ-IMPACT" that was based on Kane's algorithm from KSIM.

After simulation models and methods were developed for cross-impact analysis, analysts began to develop the range of topics that it could address. Cross Impact Analysis was being used to solve real world issues as John Stover applied the methodology to simulate the economy of Uruguay. However, real world application of the methodology advanced rapidly in the 1990s. By 1993, SMIC was used for subjects as diverse as the nuclear industry, world geopolitical evolution, and corporate activities and jobs to 2000. In 1999, Robert Blanning and Bruce Reinig from the Owen Graduate School of Management at Vanderbilt University utilized a modified form of cross-impact analysis to determine futures for Hong Kong and the Hong Kong economy as the United Kingdom relinquished control to the People's Republic of China.

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