It's the dominant function of ENFPs and ENTPs and plays an important role in 8 of the 16 types. How does it work?
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Extraverted Intuition can be thought of as a sort of mental pattern matching process, one that keeps the mind constantly engaged in scanning its external environment in search of meaning or connection. Like all personality functions, Ne is an unconscious, natural process—the Extraverted Intuitive doesn't say to themself, "I will scan my environment now to pick out the things that are important to me"—they just do it.
In his book Psychological Types, Carl Jung described Ne as an "active, creative process that puts into the object just as much as it takes out," meaning that a person using Ne will attach significance and meaning to what they perceive in the outer world, making their perceptions highly personal rather than strictly objective. Ne seeks connections and relationships between the things it perceives, and these connections provide insights that are highly meaningful to the person using Ne, and are given priority in understanding the world around them.
In order to attach meaning to objects in the external world via Ne, Sensation must be suppressed to some degree. One cannot perceive an external object with complete objectivity and also gather known connections to that object at the same time. Perceiving with Sensation requires that one take things in objectively, exactly as seen, heard, smelt, felt or tasted, with no strings attached. Ne wants the strings, wants the meaning. And so those using Ne as their primary way of taking in information will miss some concrete realities around them, like walking past the same building every day without noticing it's been painted a different color, or not noticing that their sweater is stained. Ne picks and chooses which objects to consider, in a personal way, based on the experiences and priorities of the person using Ne. It's worth noting that Ne is interested in perceiving objects with as much accuracy as possibility, so as to generate real possibilities This interest in accuracy, when combined with all the strings and tethers of meaning, can render an astonishingly insightful perception of people and situations. Ne is the most classicly "perceptive" personality function.
While the main goal of Extraverted Sensation is to get the most accurate picture of the world, the main goal of Extraverted Intuition is to suss out possibilities in the world. The act of discovering a possibility satisfies Ne like nothing else can. If a possibility comes to fruition by solving a problem or leading to a new, exciting, possibility, Ne will bask in the light of the discovery for a short while, and then drop it completely to move onto the next thing. Similarly, if the discovery doesn't pan out or continue to offer possibilities, Ne will drop it and begin to look for other possibilities.
Ne is a bit of a slave to finding possibilities, but all personalities have more than one function in play. Only the most one-sided Extraverted Intuitives will be as flaky as Ne sounds when described purely as a function. Even so, types who are dominated by Ne will need to have the freedom to find possibilities in their lives in order to feel fulfilled, much less happy.
The shadow function of Ne is Introverted Sensing. Ne has little need or value for storing up lots of data.