What Is Inductive Reasoning and When To Use It

By Indeed Editorial Team

Published 23 July 2021

Inductive reasoning is a logical thought process that helps us use experiences and observations to perceive patterns and make assumptions about what may happen in the future. This is a skill that can be utilised professionally to forecast sales, conduct research, and predict business outcomes. It helps us make decisions in the workplace and prepare businesses for the future. In this article, we explain what inductive reasoning is, how you can use inductive reasoning in your career, and explain key differences between inductive and deductive reasoning.

What is inductive reasoning?

To understand what is inductive reasoning, you can first understand what it means to be inductive. Inductive means to make generalisations based on specific instances. Inductive reasoning combines observations and experiences to reach a conclusion. This method uses logical thinking to identify connections between data sets and existing knowledge from experience. In inductive reasoning, people use their data to make a logical assumption which generalises a group that the data involves.

An example of inductive reasoning is if you observe consumer behaviour in a specific industry for 10 years, you might notice that consumers spend more money in the summer. You can use patterns you observe in consumer behaviour to predict their spending habits in the future.

Related: 10 Most Essential Data Analysis Skills

What are inductive reasoning skills?

These are skills professionals need when using the method of inductive reasoning:

  • Observation: attention to details and observing your surroundings with all senses helps collect relevant data to form theories.

  • Data analysis: in order to make conclusions about the data observed, work on interpreting, understanding, and relating the data to itself.

  • Research: researching skills are important for collecting information and providing a reference for new data that is observed.

  • Critical thinking: the ability to analyse data and compare it to existing knowledge to better understand and form a conclusion about the new information is an essential skill for inductive reasoning.

  • Memorisation: to perform inductive reasoning, recall past experiences, and remember information you have learned which pertains to the situation you are observing.

What is the difference between inductive reasoning and deductive reasoning?

Both inductive and deductive reasoning aim to form well-researched conclusions. There are a few key differences, including:

Treatment of theories

Inductive reasoning helps develop theories. By using existing knowledge and observations, you can predict outcomes. For example, inductive reasoning can predict sales, the success of projects, and business expenses.

Deductive reasoning tests theories which are developed through inductive reasoning. To perform deductive reasoning, you find an existing theory and create a hypothesis to test the ideas that this theory suggests. For example, if inductive reasoning suggests that consumers spend more in certain months, you can test this by measuring product sales and comparing them for each month.

Research approach

The research approach to inductive reasoning is shorter than the process of researching for deductive reasoning. There are three inductive reasoning stages:

  1. Collect observations. Researchers collect data and compile their existing knowledge that's relevant.

  2. Search for patterns. The second stage is to identify patterns in the data.

  3. Create a theory. Lastly, researchers draw a conclusion from the data and formulate a theory.

This approach means that inductive reasoning cannot prove a prediction or conclusion to be true. Deductive reasoning, however, can be used to prove theories. There are four stages of deductive reasoning to prove theories to be correct or invalidate them:

  • Choose existing theory. This approach requires a developed theory to test.

  • Form a hypothesis. Researchers make a prediction that uses information collected through inductive reasoning.

  • Test the hypothesis. Through collecting data and conducting experiments, researchers test their hypothesis.

  • Analyse the results. To find out if the hypothesis is correct, researchers interpret the data they collect in experimentation.

Practical uses

Researchers and scientists most commonly use deductive reasoning because their job requires that they use evidence to test theories and prove their hypothesis. Professionals who use inductive reasoning are in law enforcement and business development careers such as marketing. They create theories by collecting evidence, but often it's not their responsibility to prove their theory. For example, a police officer may make an arrest because of reasonable suspicion, but it's up to a court to use deductive reasoning to prove the suspect to be innocent or guilty.

Types of inductive reasoning

There are three types of inductive reasoning you may use to develop a theory and make conclusions:

Inductive generalisation

Inductive generalisation is when you use a small data set to make an assumption of the entirety of the data. This makes the data more manageable, since it can be challenging to observe and collect all possible data relating to a subject. This type of inductive reasoning instead uses past experience and new observations to form a conclusion.

For example, if sales increase by 5% in the third quarter of each year on record, one can predict that sales would increase by this percentage every year in the third quarter.

Statistical induction

A statistical induction uses statistics as evidence to draw a conclusion. This type of inductive reasoning provides more evidence to make a prediction about a future outcome, but cannot prove a theory because new information may surface or there could be factors to disrupt the numerical patterns that are observed through statistical induction.

For example, if 80% of customers buy a product through the business's online store and Tom is a customer, it's likely that he buys the product online.

Induction by confirmation

Induction by confirmation requires that you reach a conclusion using a specific set of data. Detectives often use this type of inductive reasoning to solve crimes. They use case observations and witness testimony to figure out a culprit. For example, a coroner uses an autopsy to make observations and determine a cause of death. This is induction by confirmation because they assume a cause of death using a specific set of data before the coroner does.

How to use inductive reasoning in your career

Inductive reasoning skills help one make well-informed decisions and can be useful in data analysis and research for various business operations. Here are practical uses for inductive reasoning, regardless of your career:

Bolster your resume

Inductive reasoning is an excellent soft skill that you can list on your resume. Look for keywords in the job description, such as critical thinking skills, to figure out if the employer may be seeking a job candidate who can use this method to reach conclusions. If you include this on your resume, consider also providing a specific example of how you used inductive reasoning skills in the workplace at a previous job in your cover letter.

It's a valuable skill for many professions. Use your best judgement to determine how you could use inductive reasoning to enhance your work for the jobs to which you apply.

Related: Soft Skills: Definition, Examples and Tips

Succeed in interviews

You can demonstrate your inductive reasoning skills to an employer during a job interview to indicate that you are a decision-maker and skilled at thinking critically. Prepare to talk about a specific instance when you were able to use inductive reasoning to reach a desirable outcome, such as forecasting sales, in case an interviewer asks about your decision-making process or critical thinking skills in the interview. By providing an example, you can show employers you're insightful, resourceful, and able to analyse data.

Related: How To Prepare for an Interview

Set attainable goals

You can set smarter goals by using your experience to strategise how to improve and where to set milestones for progress. Inductive reasoning is helpful in predicting outcomes, such as the goals you want to accomplish. Consider collecting data about workflow, past success, and current projects to make an informed conclusion about how to achieve a desirable result.

For example, if your goal is to finish a project by a certain date, it would be helpful to draw on past instances where you met deadlines. Look at the processes you used to accomplish the goal then, and use the parameters of your current project to determine how you can achieve this result again.

Related: Career Goals: How To Set, Examples and Tips for Achieving

Predict business outcomes

Most commonly, inductive reasoning is used to develop theories, such as predicting patterns and potential outcomes. Marketers find this helpful in identifying consumer trends and use this to develop marketing campaigns. Professionals in business administration roles can use inductive reasoning to create budgets by anticipating expenses based on past budget reports. Inductive reasoning is a logical way to look at evidence and can help inform decisions based on probability where applicable.

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