Posts Tagged ‘development’
“There is often a decades-long time lag between the development of powerful new technologies and their widespread deployment”*…
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.
“To overcome a desperate situation, make a complete turn in one sudden burst”*…
Rupert Wingfield-Hayes, the BBC’s Tokyo correspondent, on the riddle of Japan…
This is the world’s third-largest economy. It’s a peaceful, prosperous country with the longest life expectancy in the world, the lowest murder rate, little political conflict, a powerful passport, and the sublime Shinkansen, the world’s best high-speed rail network.
America and Europe once feared the Japanese economic juggernaut much the same way they fear China’s growing economic might today. But the Japan the world expected never arrived. In the late 1980s, Japanese people were richer than Americans. Now they earn less than Britons.
For decades Japan has been struggling with a sluggish economy, held back by a deep resistance to change and a stubborn attachment to the past. Now, its population is both ageing and shrinking.
Japan is stuck…
His diagnosis and his prognosis: “Japan was the future but it’s stuck in the past,” @wingcommander1 in @BBCWorld.
* Japanese proverb
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As we ponder progress, we might recall that it was on this date in 2011 that three reactors at the Fukushima Daiichi Nuclear Power Plant exploded and released radioactivity into the atmosphere a day after the 2011 Tōhoku earthquake and tsunami.
The radiation releases forced the evacuation of 83,000 residents from towns around the plant. The meltdown caused concerns about contamination of food and water supplies, including the 2011 rice harvest, and also the health effects of radiation on workers at the plant. Scientists estimate that the accident released 18 quadrillion becquerels of caesium-137 into the Pacific Ocean, contaminating 150 square miles of the ocean floor.
“Seek truth from facts”*…
China’s property sector is enormous, under tremendous financial strain– and, as Jeremy Wallace explains, a very big contributor to climate issues (e.g., construction on China accounts for 5% of global energy consumption)…
China has ended zero-Covid. The resultant viral tsunami is crashing through China’s cities and countryside, causing hundreds of millions of infections and untold numbers of deaths. The reversal followed widespread protests against lockdown measures. But the protests were not the only cause—the country’s sagging economy also required attention. Outside of a few strong sectors, including EVs and renewable energy technologies, China’s economic dynamo was beginning to stutter in ways it had not in decades.
Whenever global demand or internal growth faltered in the recent past, China’s government would unleash pro-investment stimulus with impressive results. Vast expanses of highways, shiny airports, an enviable high-speed rail network, and especially apartments. In 2016, one estimate of planned new construction in Chinese cities could have housed 3.4 billion people. Those plans have been reined in, but what has been completed is still prodigious. Hundreds of millions of urbanizing Chinese have found shelter, and old buildings have been replaced with upgrades.
The scale of construction has been so prodigious, in fact, that it has far exceeded demand for housing. Tens of millions of apartments sit empty—almost as many homes as the US has constructed this century. Whole complexes of unfinished concrete shells sixteen stories tall surround most cities. Real estate, which constitutes a quarter of China’s GDP, has become a $52 trillion bubble that fundamentally rests on the foundational belief that it is too big to fail. The reality is that it has become too big to sustain, either economically or environmentally….
The “Chinese real estate bubble” is the world’s problem: “The Carbon Triangle,” from @jerometenk in @phenomenalworld. Eminently worth reading in full.
Analogically related (and at the risk of piling on): “China must stop its coal industry“
* Chinese maxim, popularized by Mao, then Deng Xiaoping
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As we get real about real estate, we might spare a thought for Deng Xiaoping; he died on this date in 1997. A Chinese revolutionary leader, military commander, and statesman, he served as the paramount leader of the People’s Republic of China from December, 1978 to November, 1989. Deng led China through a series of far-reaching market-economy reforms, earning him the reputation as the “Architect of Modern China”.
The reforms carried out by Deng and his allies gradually led China away from a planned economy and Maoist ideologies, opened it up to foreign investments and technology, and introduced its vast labor force to the global market, thus turning China into one of the world’s fastest-growing economies.
But China’s real estate bubble is a reminder that every solution can all-too-easily turn into the next problem.
“When you leave the Island of Pentam and sail about 100 miles, you reach the Island of Java”*…
Indonesia is the 14th largest country by area at 735,358 square miles; Java, the island on which the capital Jakarta is located, is only 58,000 square miles– but Java is home to over half the Indonesian population, over 150 million people. It’s the most populous island in the world, and one of its most populous places. Tomas Pueyo explores the reasons why…
Java’s population density is 1,100 people per square km. This is 3x the density of Japan or the Philippines, 7x that of China, 30x that of the US. It’s nearly the density of Houston, Texas. For an entire island! With volcanoes!
Even weirder: Its neighboring islands in Indonesia are not that densely populated. Compared to its big neighboring islands, it’s 8x more densely populated than Sumatra and 30x more than Borneo.
Why!? What made this island so special?
Read on for a fascinating explanation: “Why is Java So Weird?!” from @tomaspueyo via his wonderful newsletter Uncharted Territories.
* Marco Polo (who was probably, it turns out, actually talking about Sumatra)
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As we dig into development, we might recall that it was on this date in 1497 that Dominican friar and populist agitator Girolamo Savonarola, having convinced the populace of Florence to expel the Medici and recruited the city-state’s youth in a puritanical campaign, presided over “The Bonfire of the Vanities,” the public burning of art works, books, cosmetics, and other items deemed to be vessels of personal aggrandizement. Many art historians, relying on Vasari’s account, believe that Botticelli, a partisan of Savonarola, consigned several of his paintings to the flames and “fell into very great distress.” Others are not so certain. In any case, it seems sure that the fire consumed works by Fra Bartolomeo, Lorenzo di Credi, and many other painters, along with a number of statues and other antiquities.
“Demography is destiny”*…
But what destiny? Strong population growth has fueled economic development in some countries (where the phenomenon of economic growth tends to moderate population growth), and it has exacerbated problems in others. Conversely, a shrinking population can vex the prospects for development and growth. The Economist weighs in with thoughts on the world’s two most populous nations– one shrinking, the other growing…
China has been the world’s most populous country for hundreds of years. In 1750 it had an estimated 225m people, more than a quarter of the world’s total. India, not then a politically unified country, had roughly 200m, which ranked it second. In 2023 it will seize the crown. The UN guesses that India’s population will surpass that of China on April 14th. India’s population on the following day is projected to be 1,425,775,850.
The crown itself has little value, but it is a signal of things that matter. That India does not have a permanent seat on the UN Security Council while China does will come to seem more anomalous. Although China’s economy is nearly six times larger, India’s growing population will help it catch up. India is expected to provide more than a sixth of the increase of the world’s population of working age (15-64) between now and 2050.
China’s population, by contrast, is poised for a steep decline. The number of Chinese of working age peaked a decade ago. By 2050 the country’s median age will be 51, 12 years higher than now. An older China will have to work harder to maintain its political and economic clout. [See also:”For the first time since the 1960s, China’s population is shrinking” and “Here’s why China’s population dropped for the first time in decades.”]
Both countries took draconian measures in the 20th century to limit the growth of their populations. A famine in 1959-61 caused by China’s “great leap forward” was a big factor in persuading the Communist Party of the need to rein in population growth. A decade later China launched a “later, longer, fewer” campaign—later marriages, longer gaps between children and fewer of them. That had a bigger effect than the more famous one-child policy, introduced in 1980, says Tim Dyson, a British demographer. The decline in fertility, from more than six babies per woman in the late 1960s to fewer than three by the late 1970s, was the swiftest in history for any big population, he says.
It paid dividends. China’s economic miracle was in part the result of the rising ratio of working-age adults to children and oldsters from the 1970s to the early 2000s…
India’s attempt to reduce fertility was less successful. It was the first country to introduce family planning on a national scale in the 1950s. Mass-sterilisation campaigns, encouraged by Western donors, grew and were implemented more forcefully during the state of emergency declared by Indira Gandhi, the prime minister, in 1975-77… Though brutal, the campaign was not thorough enough to cause a dramatic drop in India’s birth rate. India’s fertility has dropped, but by less, and more slowly than China’s. With a median age of 28 and a growing working-age population, India now has a chance to reap its own demographic dividend. Its economy recently displaced Britain’s as the world’s fifth-biggest and will rank third by 2029, predicts State Bank of India. But India’s prosperity depends on the productivity of its youthful people, which is not as high as in China. Fewer than half of adult Indians are in the workforce, compared with two-thirds in China. Chinese aged 25 and older have on average 1.5 years more schooling than Indians of the same age.
That will not spare China from suffering the consequences of the demographic slump it engineered. The government ended the one-child policy in 2016 and removed all restrictions on family size in 2021. But birth rates have kept falling. China’s zero-covid policy has made young adults even more reluctant to bear children. The government faces resistance to its plans to raise the average retirement age, which at 54 is among the lowest in the world. The main pension fund may run out of money by 2035. Yet perhaps most painful for China will be the emergence of India as a superpower on its doorstep…
The contrasting demographic dynamics of China and India, and what they might mean: “India will become the world’s most populous country in 2023,” from @TheEconomist.
* attributed to Auguste Comte
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As we ponder population, we might recall that it was on this date in 1829 that the first part of the tragic play Faust by Johann Wolfgang von Goethe premiered. Originally published in 1808, the tale of Dr. Faust’s deal with Memphistopheles is considered by many to be the greatest work of German literature.
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