l05 technological revolutions
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LECTURE L05TECHNOLOGICAL REVOLUTION
ModulesModule 1 - Technology EvolutionModule 2 - InnovationModule 3 - Business TransformationModule 4 - InfrastructureModule 5 - Algorithms and PlatformsModule 6 - Future of Work
Module 2 - InnovationL05 Technological RevolutionsL06 InnovationL07 Diffusion of InnovationL08 Becoming Invisible
Assignment 2
LECTURE L05TECHNOLOGICAL REVOLUTION
AgendaTechnological revolutionsThe Age of Oil, Automobile and ManufacturingCurrent revolution —similariesGenerations
WHEN IN A TECHNOLOGICAL REVOLUTIONTHE HARDEST THING TO UNDERSTAND IS THAT
YOU ARE IN ONE
We tend to overestimate the immediate impact of technology and underestimate the long-term impact
Timing is everything
We tend to place emphasis on the technology itself, when it is really the social and cultural change that will be the most dramatic
Perception is everything
WE EMPHASIZETECHNOLOGY
BUT IGNORE THE SOCIAL AND CULTURAL
IMPACT
Is it really up to politicians with their 12 point plans?
Economic Growth
Large revolutions that transform society and change the way people live
What is the nature of them?
Are the similarities between them?
Do they always progress in the same way?
Technological Revolution
The 20th century was the age of automobile, oil and mass manufacturing
Example of a Technological Revolution
THE WORLD IN 1899
Local and linear
The Great Horse Manure Crisis of 1894
“In 50 years every street in London would be buried under nine feet of manure.” — An article in Times of London, 1894
New Technological Revolution takes off
Henry Ford (1863 – 1947)
Ford Model-T 1908
Ford Model-T 1908
IRRUPTION
Car companies
Hottest technology companies at the time
New Class Emerges
Inequality rises - few people get very rich
Right age, place, time, and sex
Andrew MellonAndrew Carnegie Henry Ford John D. Rockefeller
FRENZY
The Roaring Twenties
The 1929 Wall Street Stock Crash
The crash began on October 24. Institutions and financiers started to buy stocks to keep them up.
The stock bounced back only to collapse on Tuesday, 29th - Black Tuesday.
The Great Depression
Depression spread world-wide and lasted until the second Great War
Turning Point
Fundamental changes are made to move from the frenzy mode, shaped by financial criteria to synergy mode, solidly based on growing production capabilites
Turning Point
Carlota Perez, Technological Revolution and Financial Capital
From 1960 to 1980 there was unprecedented consumer demand
because of the affluent middle class (Baby Boomers) both in US and
EuropeSource: Retail Revival
SYNEGRY
Prosperity
Benefits of the new technology spreads
More productive economies
Golden Age
Post-war America - „The Glory Days“
STAGNATION
Improvements in technology are waining
Younger generation feels left out
Mistrust, status quo is questioned
Stagnation
Carlota Perez, Technological Revolution and Financial Capital
Technological Revolution
INSTALLATIONPERIOD
TURNINGPOINT DEPLOYMENT
Age of Oil andAutomobile 1908 The Roaring
Twenties 1929-33 & 43 Post-war Golden Age
Source: Carlota Perez
INSTALLATIONPERIOD
TURNINGPOINT DEPLOYMENT
The Industrial Revolution 1771 Canal mania 1793-97 The Great British Leap
Age of Steam and Railways 1829 Railway mania 1848-50 The Victorian Boom
Age of Steel and Electricity 1875 Infrastructure
bubbles 1890-95The Belle Époque (Europe)
Progressive Era (USA)
Age of Oil andAutomobile 1908 The Roaring
Twenties 1929-33 & 43 Post-war Golden Age
Source: Carlota Perez
Technological Revolution
The Long View
The Industrial Revolution
Arkwright’s millin Cromford
1771Age of Steamand Railways
Manchester-Liverpool Rocket
line
1829Age of Steel and
Electricity
Carnegie Bessemer steel plant, Pittsburg
1875Age of Oil and
automobile
Ford’s model T plant, Detroit
1908Age of
Information
Intel’s microchip, Santa Clara
1971
Technical Revolutions span over generations Starts with a cluster of technological revolutions in a particular place
Source: Carlota Perez
3. Industrial Revolution2. Industrial Revolution1. Industrial Revolution
The Long View
The Industrial Revolution
Arkwright’s millin Cromford
1771Age of Steamand Railways
Manchester-Liverpool Rocket
line
1829Age of Steel and
Electricity
Carnegie Bessemer steel plant, Pittsburg
1875Age of Oil and
automobile
Ford’s model T plant, Detroit
1908Age of
Information
Intel’s microchip, Santa Clara
1971
Technical Revolutions span over generations Starts with a cluster of technological revolutions in a particular place
Source: Carlota Perez
Installation period Deployment Period
Institutional recomposition
Deg
ree
of te
chno
logi
cal m
atur
ity
and
mar
ket s
atur
atio
n
timeCrash 2000-2008Big bang Intel 4004
1971 Next big bang
Techno-economic split
IRRUPTION
Financial Bubble Time
FRENZY
Golden Age
SYNERGY
MATURITY
Source: Carlota Perez
An event the signifies the start of an new revolution
Something that changes the world
Technology Trigger
The Industrial Revolution
Arkwright’s millin Cromford
1771Age of Steamand Railways
Manchester-Liverpool Rocket
line
1829Age of Steel and
Electricity
Carnegie Bessemer steel plant, Pittsburg
1875Age of Oil and
automobile
Ford’s model T plant, Detroit
1908Age of
Information
Intel’s microchip, Santa Clara
1971
Source: Carlota Perez
The Irruption Phase: A Time for TechnologyStarts with technology trigger - an event or item that signals beginning of a new era
Old paradigms are mature and stagnant
Unemployment rises, partly due to economic stagnation and technological replacement
New technology is pursued by entrepreneurs
Despair and impotence affect those loosing out
Old industries see declining profits
Policymakers try to keep and protect outdated industries
Political uncertainty and division, sometimes new movements
The Irruption Phase: A Time for Technology
The Frenzy Phase: A Time for FinanceFinancial capital takes over - paper economy decouples the real economoy
Small number of people get very rich, inequality rises
Massive migration as people look for opportunities
The Frenzy Phase: A Time for FinanceTime of speculations, corruption, and love of wealth
The wealth that has grown and concentrated in relatively few hands is greater that can be absorbed by real investment
Excess money goes into infrastucture, over investment
The Turning PointA conceptual device to represent the fundamental change required to move from frenzy mode to synergy
Process of contextual change
Move from individualism to collective well-being
Period that is ripe for reshaping regualtions and policies
The Synergy Phase: A Time for ProductionGolden age
Infrastructure serves as engines of growth
Wealth gets distributed as investment is in production
The Synergy Phase: A Time for ProductionFull employment - production
Reign of the middle class
New paradigms are now accepted and permeates every activity
The Maturity Phase: A Time for QuestioningMarkets get saturated
Technology is stable and mature, productivity gains are drained
The young start to see things as ‘all wrong’ - movements form
Time of questioning
The Maturity Phase: A Time for QuestioningCompany mergers
Migration of activities to less-saturated markets abroad
Age of Information and Telecommunications
1947
Programmable all-purpose electronic computers start to have impact on big businesses and government
Automation starts, jobs get lost
IBM mainframes
Mainframe
1965
Minicomputers allow mid-sized companies and academia to have time shared computing power
Automation continues
Minicomputers
Fifth Technological Revolution starts
Intel 1971
The Technology Trigger 1971
1981
Personal Computer allowed small companies and individuals to own and program computers
Generative platform
Opened up a huge revolution - created a new industry
Personal Computers
IRRUPTION
Bill Gates Steve Jobs Michael Dell Larry Ellison
Tech Companies
1995
Opened up a new way for people to communicate and exchange data
Generative platform, permissionless innovation
Created new industries, transformed businesses
3.4 billion connected
Internet
FRENZY
2007
The smartphone revolution takes off with new possibilities
Powerful computer in your pocket
Access to 4 million apps
Constant access to the Internet
Smartphone
Mainframe
1947
Minicomputer
1965
PC
1981 1995
Internet Smartphone
2007
The Shortening Waves
INSTALLATIONPERIOD
TURNINGPOINT DEPLOYMENT
Age of Information 1971 Internet mania and
financial casino2000 & 2008
The Industrial Revolution 1771 Canal mania 1793-97 The Great British Leap
Age of Steam and Railways 1829 Railway mania 1848-50 The Victorian Boom
Age of Steel and Electricity 1875 Infrastructure
bubbles 1890-95The Belle Époque (Europe)
Progressive Era (USA)
Age of Oil andAutomobile 1908 The Roaring
Twenties 1929-33 & 43 Post-war Golden Age
The New Golden Age?
Source: Carlota Perez
Technological Revolution
Installation period Deployment Period
Institutional recomposition
Deg
ree
of te
chno
logi
cal m
atur
ity
and
mar
ket s
atur
atio
n
timeCrash 2000-2008Big bang Intel 4004
1971 Next big bang
Techno-economic split
IRRUPTION
Financial Bubble Time
FRENZY
Golden Age
SYNERGY
MATURITY
Source: Carlota Perez
Is the turning point over?
The Danger in Turning pointsAfter synergy and maturity, unrest and new movement start to emerge and they are not silence, but people start to listen.
1. Rising Immigrations2. Increasing inequality3. The Perception of corruption4. A big financial crisis
Talking About Generations
GenerationsMajor technological shifts always happens with generations
Research into understanding generations and how they behave
Here are some of the stereotypes - and should be used as a guideline, not absolute facts
Although we see trends human nature is usually the same in any generation
Silent GenerationBorn 1925 until 1942, sometimes called “Lucky Few” and are retired today
Born too early for WWII but before the Baby Boomers
Entered the workplace in a booming economy, the Sputnik Era - high wagers, low fixed rate mortgages
The healthiest and most educated generation of elders that ever lived—and, of course, the wealthiest.
The last Silent cohort reached age 65 in 2007 - perfect timing to the end!
Baby BoomersBorn 1946 until 1964, following the booming years after World War II. Larger than previous generation.
Associated with privilege. Time of widespread government subsidies in post-war housing and education, and increasing affluence. The boomers moved to the suburbs and were perfect consumers for the newly erected malls.
Received peak levels of income. Therefore, the boomers were perfect consumers. In 2015, the boomers are between 51 and 69 years.
Generation XBorn ca. 1965 until 1980, MTV generation
Grew up when the wife stopped being a housewife and started working so Xers became latchkey kids, and got used to daycare and divorce as well as microwave dinners (there is a theory that states that microwave owens and divorce is related).
This is the generation in the middle - boomers and millennials
Got access to computers at school and later work, played video games in arcades. Just as the baby boomers, the Xers are passive consumers. This is the last generation to use email as main form of correspondence.
Born ca. 1980 until 2000 - the net generation or NetGen
Grew up with computers and the internet, and played video games on consoles at home. With online technologies this generation is much better connected with their parents.
More liberal than previous generations and more open minded, don’t mind big governments if they get service.
Unlikely to conform to a routine schedule like working 9-5 or showing up at any particular time, work according their own schedule, output driven. Not as loyal, move from one job to the next.
Millennials
Many millennials prefer smartphone and a laptop to having a car
They like staying in crowded urban areas and are less likely to choose to live in suburbs
Workplaces that want to attract millennials are open spaces, elegantly designed with lots of different places to work like sofas, picnic tables - far away from Dilbert like cubicle place
Millennials
MillennialsMillennials are self centered and want to be the center of attraction
Whereas ad for the Xers and boomers showed some hero or role model that they should look up to and want to become (and thus buy the product, see the movie etc)
These ads don’t work for millennials as they are used to be the star - and don’t want to be anybody else
Millennials
Have the reputation of choosing brands but lacking loyalty
They are quicker to switch brands, loyalty is shorter
Today we have much more choses, much more brands are available and the sources of information that let you switch brands is far bigger than ever
A consumer may choose a brand if a friend recommends it
Millennials
In the book Retail Revival, author points out that brands that are winning with the millennials, of course they need to be good, but also:
•Authentic like Lululemon, living what their brands espouses and being real •Purpose driven like TOMS Shoes, supporting human purpose
beyond pure profit; •Quick to change like Apple, constantly driving obsolescence with
its latest products; and •Socially savvy like Zappos.com, nurturing the visibility of everyone
in the company through social networks.
Millennials
Comparing GenerationsMillennials use technology differently
What makes your generation unique?
Comparing Generations
0
1,000
2,000
3,000
4,000
5,000
6,000
20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99100101102103104105106107108
Series1
Millennials76,321
Gen-X59,302
Baby boomers69,897
hippies/“counterculture”Beatles Kingdom
World war II
World war IValues and traditionsMTV
Latchkeys
smartphonescomputers/net
computers/BASIC
Punk
Born at farms
TV
Religion
Gögn frá Hagstofunni
Radio/telegrams
Rás2Youtube
Social MediaSelfies
Bond
Movie starsQueen
Live AidSpotify Netflix
Silent and before30,054
game consoles
Arcades
Generations
Industrial/progressLP
CD
Key InsightResearch suggest that millennials are in some ways different than the previous generations, in particular their use of technology.
This is the generation that established businesses need to attract as customers, and that means using the same technology as they do - smartphones, web sites, and social media.
Then try to figure out the Snapchat generation
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