During the energy crisis in the mid-seventies, she viewed cheap micro-electronic an upcoming substitute to cheap oil.
The 5 technological revolutions:
- Industrial revolution: machines and canals (the internet of the time)
- Railways (steam engines and iron)
- Heavy engineering and cheap steel
- Assembly-line automobile that overtook other means of transportation (eg: horse carriage, train)
- Information revolution
A technological revolution happens in two phases:
In each technological revolution, there is a huge bubble and a huge crash that signifies the end of the installation phase, and the start of the deployment phase that carries huge capacities for wealth creation and opportunities to improve well-being
The current information revolution has seen two bubbles crashed so far, which seems unique
- the internet use and infrastructure
- the financial sector, which is based on information [AF: some kind of a self-inflicted bubble]
- the turning point after a crash is the realisation that the wealth that has been invested during the bubble wasn't put to real creation of value and a whole range of problem derive from that (eg: unemployment)
- over past technological revolutions, businesses have worked in collaboration with governments to deploy the technology after the crash, but not this time: the financial and industrial sectors have kept apart
- Henry Ford: "What's good for GM is good for America"
- Fred Wilson: "What's good for technology is good for the country"
- Carlota Perez: "What's good for IT is good for the world, what's good for the world is good for the IT industry"
- the people that have driven this technological revolution [tech entrepreneurs] need to engage with policy-makers and governments to come up with right steps to take [to deploy technology] [AF: because we know that subject better than anyone else]
Patterns of the installation period
- a culture of free-market emerges
- industries that might benefit from the technological revolution get away from old governmental obstacles that are getting obsolete [policies and regulations that were put in place over the past technological revolutions]
- Basically, it's "government OUT, finance IN" and "everybody competes and then market decides who wins or lose"
- as we move past the mass-production phase, society will have to move away from "consumerism" (buying multiples times the same things over a lifetime) and go toward improvements in quality of life and well-being
- the upcoming challenge is to redesign infrastructure and products for improved durability, maintainability and sustainability
- the current period of societal unrest (eg. Occupy Wall Street movement) is typical to technological revolutions
- Carlota Perez mentions the anger of a generation that is horrified to not have a future
- human capital and education have increased in cost and decreased in investment when they should have gone in the opposite direction
- demand needs outside intervention to be created
- she suggest that government incentivise business to agree to a vision for the society and way of life [AF: that is beneficial to society, not corporate self-interest]
- Western society is "faced with an appalling crisis of leadership" because "governments seem to think that by solving the current financial debacle they will get back to business as usual" [AF: see Normalcy bias]
She advises that "finance leave the casino and fund the real economy", and this can be achieved by:
- changing the incentive system and making it more profitable to do the latter [fund real economy]
- structural change in economy and regulation of the green economy
- control of finance at a global level
Concluding thought: current leaders of society are governments and businesses while we would instead need people to:
- take a strong political stand
- act to make the future go into a better direction [AF: more beneficial to the whole society]