Identifying Development Challenges: Option 2

In this approach, the team develops detailed scenarios to explore how drivers might interact and shape the future. This method is ideal for teams with more time, resources, or experience in foresight exercises. Two commonly used methods for scenario development are the 2x2 Matrix and the Scenario Archetypes approach.

What are scenarios and why are they important?

Scenarios are structured narratives about the future, designed to explore a range of possible outcomes by projecting key drivers of change and uncertainties into alternative futures. They are not forecasts or predictions; rather, they are tools to help teams learn from the future to take informed actions in the present.

Why Scenarios Matter

Scenarios challenge traditional ways of thinking and force teams to grapple with complexity, uncertainty, and interconnected systems. They are particularly valuable in identifying development challenges that might not be visible through current data or linear analysis. By encouraging creative exploration, scenarios expand strategic thinking and foster innovation.

According to Pierre Wack, one of the pioneers of scenario planning, forecasts are dangerous because they tend to fail when unexpected changes or major shifts occur. Scenarios mitigate this risk by presenting multiple plausible futures, helping teams prepare for a range of possibilities rather than relying on singular predictions.

Scenarios enable teams to explore development challenges in ways that analytical approaches might not:

Challenge Assumptions: Scenarios disrupt the "we've always done it this way" mindset, allowing teams to challenge their assumptions and broaden their perspective.

Explore Complex Interactions: Scenarios reveal how drivers interact with each other, often creating new challenges or amplifying existing ones.

Surface Unconventional Challenges: By exploring futures that deviate significantly from today's trajectory, scenarios bring to light unconventional development challenges that might otherwise be overlooked.

Connecting Scenarios to UNDP's Work

In the context of UNDP, scenarios are critical for anticipating future risks and opportunities and designing development programs that are resilient, innovative, and forward-looking. By using scenarios, teams can:

• Align their work with plausible future conditions, making strategies more anticipatory.
• Prepare for high-impact uncertainties by addressing challenges that might arise in multiple scenarios.
• Inspire new ways of working by embedding creativity and systems thinking into development planning.

Scenarios are more than just stories—they are tools for surfacing hidden challenges, imagining transformative possibilities, and building resilience to future uncertainties.

If you've chosen Option 2, you'll embark on a creative approach to identify development challenges by exploring scenarios. This method enables teams to consider how different drivers interact across plausible futures, surfacing challenges that may not be immediately apparent in today's context.

The process is structured into two steps, each designed to guide you from building scenarios to defining actionable development challenges.

Option 2: Developing Scenarios

While there are many methodologies for building scenarios, this guide focuses on two widely used and practical techniques: the 2x2 Matrix Method and the Archetype Technique. Each approach has its strengths and is suited for different team needs and contexts. Below, we'll provide an overview of each method, including when to use them.

The 2x2 Matrix Method

What It Is

The 2x2 Matrix Method is a structured scenario-building approach that explores future possibilities based on two critical uncertainties. By placing these uncertainties along two axes, the method creates four quadrants, each representing a distinct and plausible future.

When to Use the 2x2 Matrix

• When the team has limited time and needs a relatively quick way to generate scenarios.
• When two key uncertainties are particularly important in shaping the development landscape.
• When stakeholder input is needed, as the visual grid format is highly intuitive and easy to engage with.

The Archetype Technique

What It Is

The Archetype Technique is a narrative-driven approach that builds scenarios using predefined archetypes to explore a wide range of future possibilities. These archetypes are recurring patterns that describe how the future could unfold.

When to Use the Archetype Technique

• When the team has more time and wants to explore systemic challenges across a broader range of possibilities.
• When creativity and narrative depth are priorities, enabling a rich exploration of complex, dynamic systems.
• When the goal is to explore extreme or unconventional futures, beyond current trends.

By selecting the approach that best suits their objectives, teams can build scenarios that not only reflect plausible futures but also uncover innovative development challenges across these contexts. In the following sections, we'll provide step-by-step guidance for applying both methodologies effectively.

Developing Scenarios: the 2X2 Matrix method

The 2x2 Matrix Technique is a structured and efficient way to develop scenarios by prioritizing key drivers of change and exploring their interaction across different conditions. Below is a detailed, step-by-step guide to help teams create scenarios using this technique.

Step 1: Start with Prioritizing the Drivers of Change

Review the list of drivers of change identified in the previous sections. These drivers represent forces shaping the future development landscape. As a team, you will need to prioritize two drivers of change to focus on.

Ask the following questions to narrow down the list:

• Which drivers have the most significant potential impact on the development context?
• Which drivers are characterized by high uncertainty?
• Which drivers are interdependent or have cascading effects on other forces?

Prioritize two key drivers that are both high impact and high uncertainty and independent of each other (i.e., they don't overlap in scope or effects).

Defining Impact

Impact refers to a driver's potential significance in shaping the future development landscape. A high-impact driver is one that could create substantial changes across sectors, systems, or populations, whether through risks, opportunities, or cascading effects.

1. Consider Breadth and Depth:

• Breadth: How many people, sectors, or regions will this driver affect?
• Depth: How profound or transformative will the changes caused by this driver be?

2. Evaluate Systemic Effects: Does this driver influence other drivers or systems? High-impact drivers often have cascading effects.

For example: Climate change affects migration, agriculture, health, and urban development, making it a high-impact driver.

Defining Certainty

Certainty refers to the level of agreement about whether and how a driver will manifest in the future. It's not about predicting likelihood with precision (no one has a crystal ball), but rather about assessing the degree of consensus or ambiguity surrounding the driver.

1. Gauge Team Agreement: If most team members agree that the driver will evolve in a specific, predictable way, then it's likely that the driver is highly certain. If however, significant disagreement exists about how or whether the driver will evolve- it will be a highly uncertain driver.
2. Examine Data and Trends: Drivers with strong, observable trends or robust evidence are typically more certain, while drivers influenced by unpredictable dynamics (e.g., political shifts) are less certain.

Tips for Assessing Impact and Certainty of Drivers

1. Use a Scoring System: Rate each driver on a scale of 1 to 5 for impact and certainty, using team discussions to reach a consensus.
2. Facilitate Team Discussions: Use structured conversations to surface assumptions, disagreements, and different perspectives. Ask team members to explain why they perceive a driver as high or low impact/certainty.
3. Avoid Overconfidence: Be cautious of biases, such as assuming high certainty simply because a driver aligns with current trends.
4. Consider Interdependence: Look at how drivers influence one another. Drivers with many interdependencies are often high-impact but may also introduce more uncertainty.

Impact Assessment Scale

How would you rate the potential impact of this driver on the development context?

1 → 2 → 3 → 4 → 5

This driver is not impactful ←→ This driver is very impactful

Certainty Assessment Scale

How would you rate the certainty of this driver?

1 → 2 → 3 → 4 → 5

This driver is likely to evolve in a predictable way ←→ This driver is very unpredictable

Step 2: Define the Two Axes of the Matrix

Place the two selected drivers on the X and Y axes of a blank matrix. For each driver, define the two ends of the spectrum (i.e., opposite conditions or extremes). Ensure the extremes are clear and specific, avoiding vague or overly broad terms.

For example, for Pace of AI Adoption, one end could be "Rapid, equitable adoption" and the other "Slow, uneven adoption."

Step 3: Populate the Matrix with Four Scenarios

The matrix's four quadrants represent the interplay of the two drivers' extremes. Each quadrant becomes a distinct scenario.

For example, if the two drivers being considered were 'Pace of Technological Adoption (Fast vs. Slow)' on the X axis and the 'Level of Social Cohesion (High vs. Low)' on the Y axis the example scenarios would be:

• Quadrant 1 (High Cohesion, Fast Tech Adoption): A thriving, inclusive digital society.

• Quadrant 2 (Low Cohesion, Fast Tech Adoption): A fragmented world of tech elites and marginalized communities.

• Quadrant 3 (High Cohesion, Slow Tech Adoption): A unified but technologically stagnant society.

• Quadrant 4 (Low Cohesion, Slow Tech Adoption): A divided, innovation-starved world.

Step 4: Build the Narrative

Once the 2x2 matrix is populated with four distinct quadrants, it's time to bring each scenario to life through a compelling and detailed narrative. This step aims to describe a plausible future world for each quadrant by exploring the interplay between the two key drivers of change and incorporating other drivers that may influence the scenario indirectly. These narratives help contextualize development challenges and opportunities, making them more actionable and relevant for planning.

To start, focus on one quadrant of the matrix at a time.

Begin by describing the world in this specific future based on the intersection of the two extremes of the selected drivers. For instance, if your drivers are Pace of Technological Adoption (fast vs. slow) and Level of Social Cohesion (high vs. low), you would explore how these two forces interact to shape a unique world in each quadrant.

In a scenario where technological adoption is rapid and social cohesion is high, the narrative might describe a thriving, inclusive digital society where technological advances are widely accessible and used to improve livelihoods. In contrast, a quadrant with slow technological adoption and low social cohesion might describe a fragmented world where innovation is stalled, and inequality is widespread.

As you develop the scenario, incorporate additional context from other drivers of change, especially the high-impact, high-certainty ones identified earlier in the foresight process.

Although these drivers were not prioritized for the matrix, they still play a role in shaping the future. For example, a high-tech world will still be influenced by climate-related migrations to urban areas, straining even the most advanced smart cities. Including such dynamics enriches the narrative, making it more multi-dimensional and reflective of systemic interdependencies.

To ensure the scenario is robust, reflect on its implications for different stakeholders. How might governments, businesses, and communities respond to this future? For example, in the low-tech, low-cohesion scenario, governments might struggle to maintain public trust, while communities could develop grassroots resilience strategies.

Conclusion

The outputs from this process offer a comprehensive view of the complexities and opportunities of the future.

These challenges are not just reflections of risks but also invitations to innovate, collaborate, and strategically position UNDP’s work in an uncertain world. However, not all challenges can be addressed at once. The next step in this process is to prioritize these challenges, ensuring that the focus is aligned with UNDP’s mandate, comparative
advantage, and the strategic needs of the country context. Prioritization is critical to translating foresight insights into impactful action. With a long list of development challenges now identified, the focus shifts to determining which ones UNDP should prioritize.

This step involves evaluating the challenges based on strategic criteria, such as alignment with UNDP’s mandate, national development goals, and the potential impact on vulnerable populations. Through this process, the most critical and actionable challenges will emerge, guiding the program priorities and partnerships in the CPD.
In the next section, we’ll explore tools, frameworks, and methodologies to systematically prioritize these challenges, ensuring that UNDP’s contributions are both impactful and future-ready.