Saturday, 27 February 2010

History Repeats: Economic Surges of Modern Times

"When you go back and read contemporary accounts of life in the 1880s and ’90s, you could replace the words steamships and telegraph with computers and Internet and the text would sound completely modern" Carlota Perez

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The first surge was the classic Industrial Revolution that started in 1771. It brought mechanization, factories, and canals. The second, centered in Victorian England, began around 1829: the age of steam engines, coal, and iron railways. The third was the age of steel and heavy engineering. Civil, electrical, chemical, and naval engineering developed impetuously then.

Around the mid-1870s. That was when cheap Bessemer steel made possible transcontinental railways, major tunnels and bridges, and rapid steamship lines. Those, along with telegraphy, led to the first great globalization — which, by the way, was coordinated by the British Central Bank and the City of London. With those technologies, Argentina, Australia, and others in the Southern Hemisphere could send grain and meat in refrigerated ships to the northern winter markets.

In the fourth surge, which started with Henry Ford’s Model T in 1908, the center of gravity shifted to America. This was the age of oil, mass production, and the automobile. Our present, fifth, surge, the age of information technology and telecommunications, began in 1971 with Intel’s microprocessor. If the historical pattern holds, this surge still has 20 to 30 years left to realize its potential.

I could guess that the next wave will involve biotechnology, bioelectronics, nanotechnology, and new materials. But those are still in gestation, just like the transistor of the 1950s represented the microprocessor in gestation
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