(Roughly) Daily

Jerry Neumann explores the relevance of Carlota Perez‘s thinking (her concept of Techno-Economic Paradigm Shifts and theory of great surges, which built on Schumpeter’s work on Kondratieff waves) to the socio-economic moment in which we find ourselves…

I’ve been in the technology business for more than thirty years and for most of that time it’s felt like constant change. Is this the way innovation progresses, a never-ending stream of new things?

If you look at the history of technological innovation over the course of decades or centuries, not just years, it looks completely different. It looks like innovation comes in waves: great surges of technological development followed by quieter periods of adaptation.

The past 240 years have seen four of these great surges and the first half of a fifth…

Economist Carlota Perez in her 2002 book Technological Revolutions and Financial Capital puts forward a theory that addresses the causes of these successive cycles and tries to explain why each cycle has a similar trajectory of growth and crisis. Her answers lie not just in technological change, but in the social, institutional, and financial aspects of our society itself…

Perez’ theory divides each cycle into two main parts: the installation period and the deployment period. Installation is from irruption to the crisis, and deployment is after the crisis. These are the ying and the yang of the cycle. Some of the differences between the two periods we’ve already mentioned—creative destruction vs. creative construction, financial capital vs. production capital, the battle of the new paradigm with the old vs. acceptance of the new TEP, etc…

We like theory because it tells us why, but more than that, a good theory is predictive. If Perez’ theory is correct, it should allow us to predict what will happen next in the current technological cycle…

A crisp distillation of Perez’s thinking and a provocative consideration of its possible meaning for our times: “The Age of Deployment,” from @ganeumann.

* Carlota Perez (@CarlotaPrzPerez)

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As we ride the waves, we might recall that it was on this date in 1901, 11 years after the suicide of Vincent Van Gogh (and as his vision and its impact flowered in its “Deployment Age”) a large retrospective of his work (71 paintings) was held at the Bernheim-Jeune Gallery. It captured the excitement of André Derain and Maurice de Vlaminck— and thus contributed to the emergence of Fauvism.