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Carlota Perez - Human Habitat 2010 - 18 October 2010



Dando forma ao futuro com o auxílio da História. O estudo das revoluções tecnológicas revela regularidades significativas nos seus padrões de difusão. Uma delas é a mudança de padrões de ...

Dando forma ao futuro com o auxílio da História. O estudo das revoluções tecnológicas revela regularidades significativas nos seus padrões de difusão. Uma delas é a mudança de padrões de consumo que ocorre na segunda onda de cada nova tecnologia, na sequência de um grave colapso financeiro. A revolução da informação encontra-se actualmente nesta encruzilhada e os desafios ambientais, juntamente com a globalização, estão a desenhar um futuro que ainda nos pode parecer improvável, mas que promete assemelhar-se ao impacto dos materiais sintéticos e à suburbanização no período pós-guerra.



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Carlota Perez - Human Habitat 2010 - 18 October 2010 Carlota Perez - Human Habitat 2010 - 18 October 2010 Presentation Transcript

  • Building a sustainable global golden age for overcoming the crisis Prof. Carlota Perez Cambridge and Sussex Universities, U.K. and Tallinn University of Technology, Estonia Human Habitat 2010 Lecture Series 18th October 2010 - Lisbon
  • The current crisis is a problem originated in the financial side of the economy… …with a solution on the production side IT HAS HAPPENED BEFORE MID-WAY ALONG EACH TECHNOLOGICAL REVOLUTION
  • BECAUSE IN MARKET ECONOMIES TECHNICAL CHANGE OCCURS BY REVOLUTIONS Capitalism experiences pendular swings about every three decades From a “gilded age” To a “golden age” under the control under the control of FINANCE of PRODUCTION with unfettered free markets aided by an active government in order to install in order to fully deploy the technological revolution the installed potential THE MAJOR BUBBLE COLLAPSE MARKS THE SWING OF THE PENDULUM What worked before will not work from now on
  • Each begins in a core country and spreads across the world FIVE TECHNOLOGICAL REVOLUTIONS IN 240 YEARS Britain 1771 The „Industrial Revolution‟ (machines, factories and canals) Britain 1829 Age of Steam, Coal, Iron and Railways Germany USA 1875 Age of Steel and Heavy Engineering (electrical, chemical, civil, naval) vs. Britain USA 1908 Age of the Automobile, Oil, Petrochemicals and Mass Production USA 1971 Age of Information Technology and Telecommunications ??? 20?? Age of Biotech, Bioelectronics, Nanotech and new materials? And each drives a GREAT SURGE OF DEVELOPMENT and shapes innovation for half a century or more
  • Why call them revolutions? Because they transform the whole economy! NEW INDUSTRIES and NEW PARADIGM FOR ALL A powerful cluster New generic technologies, of new dynamic industries infrastructures and and infrastructures organisational principles with increasing productivity for modernising and decreasing costs the existing industries too Explosive A quantum growth jump in and structural innovation and change productivity for all A massive change in wealth creating potential TRANSFORMING THE OPPORTUNITY SPACE AND THE WAYS OF LIVING, WORKING AND COMMUNICATING
  • Modernisation and rejuvenation of all sectors Mass production processes Flexible / adaptable production Closed pyramids Open interactive networks / local and global Stable routines Continuous improvement Human resources Human capital Static Tayloristic organizations Innovative learning organisations Suppliers and clients Value network partners Fixed plans Flexible / adaptable strategies Internationalisation Globalisation Three tier stable markets Highly segmented dynamic markets No environmental concern Environment as challenge and guide A radical change in managerial “common sense” brought on by a different set of enabling technologies
  • AN IMPORTANT CLARIFICATION GLOBALISATION IS INEVITABLE WITH THE INTERNET BUT… …it is not about the end of national states but about global companies choosing what to do and where to do it on a highly differentiated global space Each territory defines its role by choosing (or by not choosing) a specialisation strategy
  • ANOTHER CLARIFICATION: THE HYPERSEGMENTATION OF MARKETS (or the so-called long-tail)… …is what facilitates the multiple specialisations and re-specialisations of companies and territories Once there are infinite niches in each product space and systems for handling them by transport and distribution systems only lack of imagination stands in the way of success THE UNIVERSE OF THE PROFITABLE IS VASTLY ENLARGED BY ICT
  • It is due to resistance and difficulty in assimilating such major paradigm shifts THAT EACH GREAT SURGE GOES THROUGH TWO DIFFERENT PERIODS INSTALLATION (20-30 years) (20-30 years) Turning DEPLOYMENT (20-30 years) Point Degree of diffusion of the new technological potential “Creative destruction” “Creative Battle of the new Recessions, institutional change and role shift construction” paradigm against the old Use of new paradigm Concentration of for innovation and investment growth in new-tech across all sectors Income Financial Financial Spreading polarisation bubble bubble of social benefits LED BY LED BY FINANCIAL CAPITAL PRODUCTION CAPITAL From irruption to bubble From “golden age” collapse to maturity Time big-bang We are here Next Next big-bang big-bang
  • Why this pattern? Why the role switch? THE MARKET ECONOMY HAS TWO DIFFERENT AND COMPLEMENTARY AGENTS PRODUCTION FIXED AND CAPITAL KNOWLEDGE-BOUND Long-term bias FLEXIBLE AND MOBILE FINANCIAL Short-term bias CAPITAL Financial capital Production capital is better can massively redirect resources for carrying growth and “force” and expansion new paradigm diffusion within an established paradigm
  • THE HISTORICAL RECORD Bubble prosperities, recessions and golden ages TURNING INSTALLATION PERIOD POINT DEPLOYMENT PERIOD GREAT Collapse & SURGE “Gilded Age” prosperity “Golden Age” prosperity Maturity Recessions 1771 The Great 1st Britain Canal mania 1793–97 British leap 1829 The Victorian 2nd Britain Railway mania 1848–50 Boom 1875 Bubbles of Belle Époque (Europe) 3 rd Britain / USA 1890–95 “Progressive Era” (USA) first globalisation Germany Europe 1908 The roaring 1929–33 Post-war 4th USA twenties USA Golden age 1929–43 2007 1971 Internet mania /08 Global Sustainable 5th USA and financial casino ”Golden Age”? -??? The shift from financial mania and collapse to Golden Ages is enabled by regulation and policies to shape and widen markets
  • A unique feature of our time is that the mid-surge bubble happened in two stages ONE TWO Technological innovation Financial innovation in ICT with ICT The INTERNET MANIA The EASY CREDIT BOOM in the 1990s in the 2000s NASDAQ collapse FINANCIAL MELTDOWN in 2000 in 2007-08 Understanding this is crucial for identifying the nature, the consequences and the solution of the current crisis
  • WE ARE AT THE TURNING POINT There are three tasks for governments after the major crash: Intensive therapy 1 for finance DONE… even overdone This time global finance needs Redesign of regulation both national redesign and 2 and financial architecture a global regulatory “floor” STILL ON THE DRAWING BOARD RARELY BEING CONSIDERED Enable a AS SUCH 3 STRUCTURAL SHIFT in the real economy But recovery will be very difficult without it The length of the process depends on the social and political forces The last time around it took over a decade and a major war
  • THE UNIQUE FEATURE OF THE PREVIOUS TURNING POINT Recessions and depressions that lasted 13 years! Economists resisted Keynes as anti-free markets Business resisted Roosevelt’s New Deal as communism It took WWII as “dress rehearsal” of industry-government collaboration for market expansion The structural shift cannot happen without policy intervention to tilt the playing field
  • What is this structural shift about? What are its consequences? What are its requirements for action
  • TWO LEVELS OF DIFFUSION OF EACH TECHNOLOGICAL POTENTIAL The first half The second half concentrates innovation spreads innovation to set up across the board the new infrastructure to reap the full and to let markets economic and social pick the winners benefits
  • THE ELEMENTS OF ACTION FOR THE STRUCTURAL SHIFT Moving from laissez faire to the active come-back of the State Passing control of investment from financial to production capital Shifting from supply-push to demand-pull in investment and innovation Moving from individualist focus to collective interests SETTING UP A WIN-WIN STRATEGY BETWEEN BUSINESS AND SOCIETY AND THIS TIME IN A GLOBALISED ECONOMY
  • Different periods: different role of the State Installation Deployment THE “GILDED AGE” THE “GOLDEN AGE” Recessions, institutional recomposition and changeover The unrestrained market does it all Intelligent come-back of the State THE GOOD: PROMOTE LONG TERM GROWTH •Revive wealth creation •Regulate to restrain financial excesses •Install the new industries •Avoid monopolies; facilitate oligopolies •Reward the innovators •Restore real values over paper ones •Overinvest in infrastructures •Favour long-term investment in production •Select the leaders •Regulate and support innovation in adequate “demand pull” directions THE BAD: •Facilitate dense fabric of SMEs & SKIES •Skewed growth; polarised incomes RE-ESTABLISH SOCIAL COHESION •Primacy of paper values over real ones •Income distribution •Greed, corruption, short-termism •Social safety nets •Breakdown of collective values •Expansion and stability of demand •Restoring collective values INSTABILITY AND EXCLUSION STABILITY AND INCLUSION
  • A SHIFT IN THE DYNAMICS OF GROWTH AND INNOVATION “Gilded Age” Installation “Golden Age” Deployment SUPPLY PUSH DEMAND PULL Recessions, institutional recomposition and changeover CONTEXT CONTEXT Mature industries The new engines of growth are ready are technologically exhausted The new infrastructure widens and deepens their markets are saturated market access The old industries are rejuvenated The old economy stagnates The new technologies are only incipient The new paradigm has been learned A huge potential for growth is installed SOURCE OF DYNAMISM? SOURCE OF DYNAMISM? Finance for massive investment in new technologies, Expansion of demand industries and infrastructures (public and private) competing to select and reshaping of its profile new engines of growth (direct or indirect income redistribution) and to rejuvenate the rest to enable production growth and constant innovation TIMES OF EXPERIMENT TIMES OF BUILD-OUT AND TURBULENCE AND HARMONIOUS GROWTH
  • A SHIFT IN THE DRIVERS OF INNOVATION INSTALLATION = supply- push DEPLOYMENT = demand- pull FINANCE THE STATE FINANCE PRODUCTION and in a in a and THE NEW facilitating facilitating THE STATE ENTREPRENEURS service service as drivers role as drivers role and innovators and innovators The full flourishing A vast free market experiment of the installed potential During deployment innovation in production depends on EFFECTIVE INSTITUTIONAL AND POLICY INNOVATION
  • EACH GREAT SURGE HAS BROUGHT A CHANGE IN LIFESTYLES with new life-shaping goods and services at „affordable‟ prices DEPLOYMENT PERIOD LIFESTYLE Age of Steam, Coal, Urban, industry-based Iron and Railways 1850s-1860s VICTORIAN LIVING in Britain Age of Steel and Urban, cosmopolitan lifestyle of Heavy Engineering 1890s-1910s THE BELLE EPOQUE in Europe Age of the Automobile, Suburban, energy-intensive oil and Mass Production 1950s-1960s AMERICAN WAY OF LIFE Each style became “the good life” redefining people‟s desires and guiding innovation trajectories Will the developed and emerging countries develop a variety Age of global ICT 2010s-20??s of ICT-intensive and “glocal” SUSTAINABLE LIFESTYLES?
  • An example: The emergence of the „American Way of Life‟ as the paradigm shift from the Belle Époque… FROM ENERGY-SCARCE LIVING TO ENERGY-INTENSIVE HOMES AND MOBILITY Energy is expensive and often inaccessible Energy is cheap and its availability unlimited Trains, horses, carriages, stage coaches, Automobiles, buses, trucks, ships and bicycles airplanes and motorcycles Local newspapers, posters, theaters, parties Mass media, radio, movies and television Ice boxes and coal stoves Refrigerators and central heating Doing housework by hand Doing housework with electrical equipment Natural materials (cotton, wool, leather, silk..) Synthetic materials Paper, cardboard, wood and glass packaging Preference for disposable plastics of all sorts Fresh food bought daily Refrigerated, frozen or preserved food from specialized suppliers bought periodically in supermarkets Urban or country living and working Suburban living separate from work …all strongly aided by advertising, business strategies and government policies
  • THE TECHNOLOGICAL POTENTIAL changes the relative cost structure and marks the direction of change The techno-economic paradigm shift happening since the 1970s-80s FROM THE LOGIC TO THE LOGIC OF CHEAP ENERGY (oil) OF CHEAP INFORMATION for transport, electricity, its processing, transmission synthetic materials, etc. and productive use Preference Preference for tangible products for services and disposability and intangible value Unthinking use Huge potential for savings of energy and materials in energy and materials Unavoidable Capacity for environmental destruction environmental friendliness It is a huge opportunity space for innovation, growth and radical changes in lifestyles
  • YET, THE NEW PARADIGM IS STILL WRAPPED IN THE OLD Mass production disposability and high use of energy and materials are still with us It‟s just like the first automobiles that began looking like horse driven carriages An automobile in 1898 Reproduction: L.De Vries. 1972 WHY? Because in the crucial 1990s we had cheap oil and cheap Asian labour which favoured the stretching of the old marketing and consumption patterns TO CONTINUE ON THIS ROUTE WE WOULD NEED SEVEN PLANETS!
  • THE UNAVOIDABLE PATH OF THE CURRENT GLOBALISATION PATTERN Rising prices of oil Visible effects of and raw materials increasing global Rising packaging and warming freight costs Rising climatic risk CHANGE IN THE ECONOMICS OF THE PRODUCTION, TRANSPORT AND DISTRIBUTION OF TANGIBLE GOODS CHANGE CHANGE IN BUSINESS IN GOVERNMENT STRATEGIES POLICIES Optimal relocation and geographic re-specialisation of physical production Gradual redesign of the consumption patterns for the “good life”
  • WHY WAIT UNTIL THE PLANET FORCES US TO CHANGE COURSE? Firm and intelligent policy action, business strategies and social decisions can take us there! AND IT IS PROBABLY THE ONLY WAY OUT OF RECESSION
  • TECHNOLOGY ONLY DEFINES THE SPACE OF THE FEASIBLE Technologically Socially Economically feasible acceptable profitable The factors defining the space of the acceptable and the profitable change over time … AND ARE ALSO CHANGEABLE!
  • TWO COMPLEMENTARY OPPORTUNITY SPACES FOR INNOVATION THE SUPPLY THE DEMAND opportunity space opportunity space The range of the The range economically profitable of the technologically feasible and socially acceptable together with as defined --and modified-- the capabilities by policy and social to make it happen or other factors THE BETTER THE MATCH BETWEEN THE DEMAND AND SUPPLY SPACES THE MORE DYNAMIC THE ECONOMY
  • THE ELEMENTS OF THE DEMAND OPPORTUNITY SPACE ENABLERS New paradigm Generic technologies Infrastructures Relative cost structure Supply opportunity Sources of space Sources of DEMAND DEMAND DIRECTIONALITY VOLUME The coherence and synergy among the elements generates self-reinforcing loops
  • HOW WAS THE PREVIOUS GOLDEN AGE UNLEASHED? ? Creating a dynamic national opportunity space for deploying the potential of mass production
  • THE DEMAND OPPORTUNITY SPACE THAT SHAPED THE POST WAR GOLDEN AGE INNOVATION Cheap oil ENABLERS and materials FOR MASS Universal electricity PRODUCTION Road and airway network Suburbanisation Welfare State Post-war Labour unions reconstruction Public procurement SPECIFIC Cold war Credit system DEMAND AS DIRECTION DEMAND VOLUME, FOR INNOVATION PROFILE AND TRENDS The various elements were provided in different proportions in each “First World” country
  • Full internet access The new global at low cost positive-sum is equivalent ICT to electrification game and suburbanisation in facilitating demand (and, this time, also education) FULL “GREEN” GLOBAL DEVELOPMENT Revamping Incorporating transport, energy, successive new millions products and production systems into sustainable to make them sustainable consumption patterns is equivalent to is equivalent to the Welfare State post-war reconstruction and government procurement and suburbanisation in terms of demand creation
  • And the elements are interconnected ICT Internet access is ICTs are the main the social enabling instruments and geographic frontier of sustainability of the global market FULL “GREEN” GLOBAL DEVELOPMENT Only with sustainable production and consumption patterns Is globalisation possible But we need policy consensus involving government, business and society
  • “GREEN” is not only about saving the planet It is about saving the economy and having a high (but different) quality of life GLOBAL DEVELOPMENT is not only a humanitarian goal it is about healthy growth, markets and employment for all
  • THE CHANGE IN PREFERENCES BEGINS AT THE TOP OF THE INCOME SCALE AND SPREADS BY IMITATION …AND AFFORDABILITY Part of the paradigm shift There is still is happening a long way to go among sophisticated consumers • Natural vs. synthetic • Durability • Minimalist design • Very high quality vs. quantity • „Gourmet‟ and organic food • Reparability and upgradability • Exercise for well being • Anti-waste, pro-recycling • Small vs. big • Low carbon footprint • Multipurpose products • Customised vs. standard • Working from home • Services vs. tangible products • Solar power as luxurious • Active & creative “prosumer” as well as electric cars vs. passive consumer • Intense Internet use • Etc. etc. THE NEW LUXURY LIFE WOULD INCREASE SATISFACTION WHILE MAXIMISING THE PRODUCTIVITY OF RESOURCES
  • But the change will not come by guilt, fear or obligation But by desire and aspiration “GREEN” HAS TO BECOME FASHIONABLE!
  • THE QUESTION IS HOW TO GO FROM AN ENLIGHTENED MINORITY (by education, consciousness or wealth) TO THE GREAT MAJORITIES Advertising and company strategies and lobbying go in a green direction The new green luxury life pattern becomes fashionable Government tilts the playing field strongly in favour of green However it starts, the process goes through multiple self-reinforcing feedback loops
  • Setting up the framework for a sustainable global golden age THE LEVELS Global THE ACTORS National Government Regional Business THE GOAL Local Civil society (especially A “green economy” A global NGOs) “man-on-the-moon” Universities project Media THE MEANS Building a widespread consensus Innovative policies to change market conditions A tilted playing field on a global scale To be effective, the changes and the policies must be clear, reliable, enforceable, long-term and commanding widespread agreement
  • UTOPIAN OR REALISTIC? It sounded utopian to say But it was realistic: in mid-1930s DEPRESSION: Increasing wages created Blue collar workers will have many more millions of consumers lifetime jobs and for mass production and sustained growth fully equipped suburban houses with a car at the door Rising middle classes in the developing world Most colonies adopted the “American Way of Life” widening world markets for mass production will gain independence …or in the late 1960s: Some of the values Innovations in natural textile fibres have transformed the world of fashion of the hippie movement [back to natural materials, Innovation in distribution logistics organic food, etc.] have made organic foods the premium segment in supermarkets will become the luxury norms Shifts in consumption patterns shift profit-making opportunities
  • THE TECHNOLOGICAL STAGE IS SET TODAY FOR THE GLOBAL GOLDEN AGE OF THE 21st CENTURY It is up to business, government and society to agree on the convergent actions for making it a reality Will it be a success or a wasted opportunity? WE SHALL ALL BE RESPONSIBLE FOR THE OUTCOME