Normative forecasting is a method of projecting future needs in order to determine what developments will be required to meet those needs.
Normative forecasting is also known as backcasting in business. It refers to planning ahead by beginning from a goal of the future and functioning backward through the required steps.
Normative forecasting can best explain the relationship between the forecast and the public policy decisions. This is an active forecasting approach that requires first determining what future result or outcome is expected and then, planning policies and measures to attain these outcomes.
This forecasting mostly reflects the requirements of a company and, thus, is goal-based. The question being handled fundamentally is “how will you like the future to arrive?” This forecasting answers the question of “what should we do?” Generally, normative or backcasting forecasting is related to large public and private companies as a crucial element of decision-making and allocating resources.
Companies or organizations, institutions, and governments always have an interest in the long-term future. This forecasting has a much narrower vision of that unstructured view to the future. The main features that differentiate normative forecasting from other forecasting are its comprehensive, systematic, and public elements. Here, public elements mean it is open to review and examination by the public other than the forecasters and planners themselves.