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Technology Factors
Toffler 'future shock'
Mankind has existed for 800 lifetimes of 62 years.
First 650 spent in caves
Effective communication for the last 70
Printed word in the last 6
Measured time in the last 4
Material affluence in the last 1
The first law of technology: 'we overestimate the short term impact of new technologies
while underestimating their long term effects'

Impact of Technological Change

Technology involves the application of science and scientific principles
Science is about understanding natural phenomena
Technology is embedded in artefacts and people
Contains a large amount of tacit knowledge
Economies are continually disrupted by technology based innovations, key role of the
entrepreneur in innovating (Schumpeter)

- Entrepreneur as the individual innovator and the large companies that can afford
R&D
'Creative destruction' in which new industries sweep away the old, and the adjustment
is often painful eg. Shipping, railways, airplanes

Kondratiev 'long wave cycle'

There is a 50 year cycle of economic activity 'boom and bust'
Recovery - Prosperity - Depression - Recession
Each cycle is associated with a new transforming technology eg. steam, electricity, etc
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4 Phases of the Long Wave Cycle

Recovery: increased innovation, competing design, premium prices
Prosperity: spread of innovations, new technology spreads, standards emerge,
expansion
Recession: risky investments, financial collapses
Depression: consolidation, new industries mature, intense price competition

Significance of Long Waves

Technological paradigm emerges with big leaps and innovations
Usually associated with big improvements of productivity
Leads to creative destruction and new innovations - industries

Invention + Commercialisation = Innovation