Technology evolves in big waves that we call revolutions. The first revolution was the Industrial revolution that started in Britain in 1771. Since than we have see more revolutions come and how we are in the fifth. These revolutions follow a similar path. First there is an installation period where the new technologies are installed and deployed, creating wealth to those who were are the right place at the right time. This is followed by a frenzy, where financial markets wants to be apart. The there is crash and turning point, followed by synergy, a golden age. In 1908, a new technological revolution started. It was the Age of Oil and Automobile. The technology trigger was Henry Ford´s new assembly line technique that allowed the manufacturing of standardized, low cost automobile. This created the car industry and other manufacturing companies. This also created demand for gas thus creating the oil industry. During the Roaring Twenties the stock prices rose to new levels, until a crash and the Great Depression. Only after World War II, came a turnaround point followed by a golden age in the post-war boom. In this lecture we look at a framework for understanding technological revolutions. There revolutions completely change societies and replace the old with new technologies. We will explore how these revolutions take place. We should now be in the golden age phase. We also look at generations.

1. LECTURE L06
TECHNOLOGICAL REVOLUTIONS

2. WHEN IN A TECHNOLOGICAL REVOLUTION
THE HARDEST THING TO UNDERSTAND IS THAT
YOU ARE IN ONE

3. We tend to overestimate the immediate impact
of technology and underestimate the long-
term impact
Timing is everything

4. 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

5. WE EMPHASIZE
TECHNOLOGY
BUT IGNORE THE
SOCIAL AND CULTURAL
IMPACT

6. Is it really up to politicians with their plans?
Economic Growth

7. THE LAST REVOLUTION

8. The 20th century was the age of
automobile, oil and mass manufacturing

9. THE WORLD IN 1899

10. Local and linear

12. 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

13. New Technological Revolution takes off

14. Ford Model-T 1908

15. Ford Model-T 1908
IRRUPTION

16. Car companies were the hottest
technology companies

17. Andrew MellonAndrew Carnegie Henry Ford John D. Rockefeller
Inequality rises - few people get very
rich

18. FRENZY
The Roaring Twenties

21. 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 1929 Wall Street Stock Crash

23. Depression spread world-wide and lasted until
the second Great War
The Great Depression

24. Turning Point

25. 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

26. From 1960 to 1980 there was
unprecedented consumer demand
because of the affluent middle class
(Baby Boomers) both in US and
Europe
Source: Retail Revival
SYNEGRY

27. Benefits of the new technology spreads

28. Golden Age

29. Post-war America - from high street
to the mall

30. INSTALLATION
PERIOD
TURNING
POINT
DEPLOYMENT
Age of Oil and
Automobile
1908
The Roaring
Twenties
1929-33 & 43 Post-war Golden Age
Source: Carlota Perez
Technological Revolution

31. INSTALLATION
PERIOD
TURNING
POINT
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
1890-95
The Belle Époque (Europe)
Progressive Era (USA)
Age of Oil and
Automobile
1908
The Roaring
Twenties
1929-33 & 43 Post-war Golden Age
Source: Carlota Perez
Technological Revolution

32. The Long View
The Industrial
Revolution
Arkwright’s mill
in Cromford
1771
Age of Steam
and Railways
Manchester-
Liverpool Rocket
line
1829
Age of Steel and
Electricity
Carnegie
Bessemer steel
plant, Pittsburg
1875
Age of Oil and
automobile
Ford’s model T
plant, Detroit
1908
Age 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

33. Installation period Deployment Period
Institutional
recomposition
Degreeoftechnologicalmaturity
andmarketsaturation
time
Crash 2000-2008Big bang Intel 4004 1971 Next big bang
Techno-economic
split
IRRUPTION
Financial Bubble
Time
FRENZY
Golden Age
SYNERGY
MATURITY
Source: Carlota Perez

34. An event the signifies the start of an new
revolution
Something that changes the world
Technology Trigger
The Industrial
Revolution
Arkwright’s mill
in Cromford
1771
Age of Steam
and Railways
Manchester-
Liverpool Rocket
line
1829
Age of Steel and
Electricity
Carnegie
Bessemer steel
plant, Pittsburg
1875
Age of Oil and
automobile
Ford’s model T
plant, Detroit
1908
Age of
Information
Intel’s microchip,
Santa Clara
1971
Source: Carlota Perez

35. The Irruption Phase: A Time for Technology
Starts 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

36. 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

37. The Frenzy Phase: A Time for Finance
Financial 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

38. The Frenzy Phase: A Time for Finance
Time 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,
overinvestment

40. The Turning Point
A 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

41. The Synergy Phase: A Time for Production
Golden age
Infrastructure serves as engines of growth
Wealth gets distributed as investment is in
production

42. The Synergy Phase: A Time for Production
Full employment - production
Reign of the middle class
New paradigms are now accepted and
permeates every activity

43. The Maturity Phase: A Time for Questioning
Markets 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

44. The Maturity Phase: A Time for Questioning
Company mergers
Migration of activities to less-saturated markets
abroad

45. Age of Information and Telecommunications

46. 1947
Programmable all-purpose electronic
computers start to have impact on big
businesses and government
Automation starts, jobs get lost
IBM mainframes
Mainframe

47. 1965
Minicomputers allow mid-sized companies
and academia to have time shared
computing power
Automation continues
Minicomputers

48. Fifth Technological Revolution
starts
Intel 1971
The Technology Trigger 1971

49. 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

50. IRRUPTION

51. Bill Gates Steve Jobs Michael Dell Larry Ellison

52. 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

53. FRENZY

55. 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

56. PDP-8
Computer from DEC in
March 1965
Cost 18.500 USD
50.000 machines sold
12 bit architecture
32K memory
0,5 MIPS
MIPS: millions instruction per second
iPhone 6
Smartphone from
September 2015
Cost $649
Sold 10 million phones
in 3 days
64 bit architecture
128GB “capacity”
25.000 MIPS

57. From PDP-8 to the iPhone 6
50.000 times faster
50 years
And has camera, sensors, speakers, Wi-Fi, etc…

58. Mainframe
1947
Minicomputer
1965
PC
1981 1995
Internet Smartphone
2007
The Shortening Waves

59. INSTALLATION
PERIOD
TURNING
POINT
DEPLOYMENT
Age of
Information
1971
Internet mania and
financial casino
2000 & 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
1890-95
The Belle Époque (Europe)
Progressive Era (USA)
Age of Oil and
Automobile
1908
The Roaring
Twenties
1929-33 & 43 Post-war Golden Age
The New Golden Age?
Source: Carlota Perez
Technological Revolution

60. Installation period Deployment Period
Institutional
recomposition
Degreeoftechnologicalmaturity
andmarketsaturation
time
Crash 2000-2008Big bang Intel 4004 1971 Next big bang
Techno-economic
split
IRRUPTION
Financial Bubble
Time
FRENZY
Golden Age
SYNERGY
MATURITY
Source: Carlota Perez

61. Is the turning point over?

62. Talking About Generations

63. Generations
Major 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

64. Silent Generation
Born 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!

65. Baby Boomers
Born 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.

66. Generation X
Born 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.

67. Millennials
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.

68. 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

69. Millennials
Millennials 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

71. Millennials

72. 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

73. 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.

74. Comparing Generations
Millennials use technology differently

75. Comparing Generations
What makes your generation unique

76. 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 99 100 101 102 103 104 105 106 107 108
Series1
Millennials
76,321
Gen-X
59,302
Baby boomers
69,897
hippies/“counterculture”
Beatles Kingdom
World war II
World war I
Values and traditions
MTV Latchkeys
smartphones
computers/net
computers/BASIC
Punk
Born at farms
TV
Religion
Gögn frá Hagstofunni
Radio/telegrams
Rás2
Youtube
Social Media
Selfies
Bond
Movie stars
Queen
Live Aid
Spotify
Netflix
Silent and before
30,054
game consoles
Arcades
Generations
Industrial/progress
LP
CD

77. Key Insight
Research 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.