It’s cold outside

It’s cold outside

Carlotta Perez argues that Kondratiev Long Waves have an internal shape. One of the trends is the rollout of the driving technology from the core to the periphery and this takes place in the maturity phase as profitability of the once new technology declines. Another important event is the next eruption and where that takes place. Between the Steel & Oil phases, the world’s core moved from England, the economic and political epicentre of the British Empire to the USA and we should remember that this role was contended for by both Germany and the Soviet Union. It’s moved once, it can move again but it’s most unlikely to come back to England. I wonder what being part of the periphery will be like. I suppose it depends upon where the core is. Will it remain in the USA or move, to China or even the EU. The key will be the dynamism of the innovation economy; it looks like, due to Brexit, the UK’s Universities will decline and that much of aerospace and biosciences will leave the UK. Otherwise the UK & US industries may be defended by the ubiquity of English, but the EU has had 40 years of using it as their language of commerce and to a great extent the language of government.

I can’t see it clearly, but the corruption and financialisation of the anglosphere economies are stymieing innovation and inhibiting “creative destruction”; there is opportunity for other national economies to do better. It would also seem that Perez’s predicted regulatory correction is nostalgic this time, looking back to times when things seemed better, or defending old out dated business models. We  cannot recreate the industries of the steel revolution.

It’s unlikely to be pleasant, especially if the UK moves from being a 2nd tier economy to peripheral one. …

Perez: cycles, bubbles & golden ages

Carlota Perez in TECHNOLOGICAL REVOLUTIONS AND FINANCIAL CAPITAL: The Dynamics of Bubbles and Golden Ages in a, to my mind, successful, attempt to explain Kondratiev Long Waves, creates a theory of cycles of technology and output. I find her arguments, illustrated by powerful historical example to be compelling,  I cannot understand why her theories are not more popular.

She argues that there have since the turn of the 19th Century been five technology revolutions, of motion and textiles, the original British industrial revolution, followed by railways, steel, oil & cars and latterly silicon, computers and the internet.

I came across the ideas a number of years ago and was revising an unpublished blog article which includes a piece about her book and ideas; I made the above collage and thought I’d share it now. … …

Don’t (British) girls want to code?

Don’t (British) girls want to code?

Among the debates about the UK’s futures is how to ensure that there are enough high wage jobs and skilled labour to perform them for our future. The need for effectively skilled people today & tomorrow requires a clear education and skills supply policy. Furthermore there is a lack of clarity as to where these jobs might come from, with some arguing that we need to ‘rebalance’ the economy, usually away from the financial services industry, others that we need stronger copyright laws in order to allow our ‘creative’ industries to grow. Carlotta Perez and her acolytes, with others suggest that the IT revolution is not over and that it and its multiplier effects are the source of future work and wealth. …

Influences on my economics

There are three books which have changed my thinking about economics over the last few years. I originally questioned whether these books are revolutionary but they have added to my thinking in very basic ways. These books all look to address the economics of information, or the wealth unleashed by I.T. and the internet. My thinking about this started in the early 1990’s, Dan Remenyi at Henley Management School introduced me to the ideas that Information was the 4th Factor of Production, that Industrial Age economics was insufficient as it was unable to explain why companies that invested in negative or zero profit IT projects, as measured by ROI, outperformed those that didn’t, and that an industrial age balance sheet was incapable of evaluating an information system asset.

The three books all relate to the evolution of society and its economics, the empowering of knowledge workers and their relationships with Capital, and hence capitalists. …

Some insights into managing the cloud

Dave Cliff, Professor of Computer Sci at Bristol spoke to Waters Power:09 in Canary Wharf yesterday. It is clear from many sources that IT is changing and he examined some of these changes. He woke me up by quoting Carlota Perez  who argues that there are five transformational changes since the industrial revolution, Steam, Railways, Electricity, internal combustion and IT. She also argues that the adoption and maturity cycles are similar, and Cliff argues that “money’s out of IT now”. Her book is called “Technological Revolutions and Finance Capital:The Dynamics of Bubbles and Golden Ages”, which gives on an idea of where she’s coming from. Cliff also pointed his audience at Nick Carr’s “The Big Switch”, another pundit that argues that IT is done! …