L05 Technological Revolutions

LECTURE L05TECHNOLOGICAL REVOLUTION

ModulesModule 1 - Technology EvolutionModule 2 - InnovationModule 3 - Business TransformationModule 4 - InfrastructureModule 5 - Algorithms and PlatformsModule 6 - Future of Work

Module 2 - InnovationL05 Technological RevolutionsL06 InnovationL07 Diffusion of InnovationL08 Becoming Invisible

Assignment 2

LECTURE L05TECHNOLOGICAL REVOLUTION

AgendaTechnological revolutionsThe Age of Oil, Automobile and ManufacturingCurrent revolution —similariesGenerations

WHEN IN A TECHNOLOGICAL REVOLUTIONTHE HARDEST THING TO UNDERSTAND IS THAT

YOU ARE IN ONE

We tend to overestimate the immediate impact of technology and underestimate the long-term impact

Timing is everything

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

WE EMPHASIZETECHNOLOGY

BUT IGNORE THE SOCIAL AND CULTURAL

IMPACT

Is it really up to politicians with their 12 point plans?

Economic Growth

Large revolutions that transform society and change the way people live

What is the nature of them?

Are the similarities between them?

Do they always progress in the same way?

Technological Revolution

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

Example of a Technological Revolution

THE WORLD IN 1899

Local and linear

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

New Technological Revolution takes off

Henry Ford (1863 – 1947)

Ford Model-T 1908

Ford Model-T 1908

IRRUPTION

Car companies

Hottest technology companies at the time

New Class Emerges

Inequality rises - few people get very rich

Right age, place, time, and sex

Andrew MellonAndrew Carnegie Henry Ford John D. Rockefeller

FRENZY

The Roaring Twenties

The 1929 Wall Street Stock Crash

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 Great Depression

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

Turning Point

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

From 1960 to 1980 there was unprecedented consumer demand

because of the affluent middle class (Baby Boomers) both in US and

EuropeSource: Retail Revival

SYNEGRY

Prosperity

Benefits of the new technology spreads

More productive economies

Golden Age

Post-war America - „The Glory Days“

STAGNATION

Improvements in technology are waining

Younger generation feels left out

Mistrust, status quo is questioned

Stagnation

Carlota Perez, Technological Revolution and Financial Capital


INSTALLATIONPERIOD

TURNINGPOINT DEPLOYMENT

Age of Oil andAutomobile 1908 The Roaring

Twenties 1929-33 & 43 Post-war Golden Age

Source: Carlota Perez

INSTALLATIONPERIOD


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 1890-95The Belle Époque (Europe)

Progressive Era (USA)





The Long View

The Industrial Revolution

Arkwright’s millin Cromford

1771Age of Steamand Railways

Manchester-Liverpool Rocket

line

1829Age of Steel and

Electricity

Carnegie Bessemer steel plant, Pittsburg

1875Age of Oil and

automobile

Ford’s model T plant, Detroit

1908Age of

Information

Intel’s microchip, Santa Clara

1971

Technical Revolutions span over generations Starts with a cluster of technological revolutions in a particular place


3. Industrial Revolution2. Industrial Revolution1. Industrial Revolution

The Long View





line


Electricity


1875Age of Oil and

automobile


1908Age of

Information


1971

Technical Revolutions span over generations Starts with a cluster of technological revolutions in a particular place


Installation period Deployment Period

Institutional recomposition

Deg

ree

of te

chno

logi

cal m

atur

ity

and

mar

ket s

atur

atio

n

timeCrash 2000-2008Big bang Intel 4004

1971 Next big bang

Techno-economic split

IRRUPTION

Financial Bubble Time

FRENZY

Golden Age

SYNERGY

MATURITY


An event the signifies the start of an new revolution

Something that changes the world

Technology Trigger





line


Electricity


1875Age of Oil and

automobile


1908Age of

Information


1971


The Irruption Phase: A Time for TechnologyStarts 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

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

The Frenzy Phase: A Time for FinanceFinancial 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

The Frenzy Phase: A Time for FinanceTime 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, over investment

The Turning PointA 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

The Synergy Phase: A Time for ProductionGolden age

Infrastructure serves as engines of growth

Wealth gets distributed as investment is in production

The Synergy Phase: A Time for ProductionFull employment - production

Reign of the middle class

New paradigms are now accepted and permeates every activity

The Maturity Phase: A Time for QuestioningMarkets 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

The Maturity Phase: A Time for QuestioningCompany mergers

Migration of activities to less-saturated markets abroad

Age of Information and Telecommunications

1947

Programmable all-purpose electronic computers start to have impact on big businesses and government

Automation starts, jobs get lost

IBM mainframes

Mainframe

1965

Minicomputers allow mid-sized companies and academia to have time shared computing power

Automation continues

Minicomputers

Fifth Technological Revolution starts

Intel 1971

The Technology Trigger 1971

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

IRRUPTION

Bill Gates Steve Jobs Michael Dell Larry Ellison

Tech Companies

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

FRENZY

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

Mainframe

1947

Minicomputer

1965

PC

1981 1995

Internet Smartphone

2007

The Shortening Waves

INSTALLATIONPERIOD


Age of Information 1971 Internet mania and

financial casino2000 & 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 1890-95The Belle Époque (Europe)

Progressive Era (USA)



The New Golden Age?



Installation period Deployment Period

Institutional recomposition

Deg

ree

of te

chno

logi

cal m

atur

ity

and

mar

ket s

atur

atio

n

timeCrash 2000-2008Big bang Intel 4004

1971 Next big bang

Techno-economic split

IRRUPTION

Financial Bubble Time

FRENZY

Golden Age

SYNERGY

MATURITY


Is the turning point over?

The Danger in Turning pointsAfter synergy and maturity, unrest and new movement start to emerge and they are not silence, but people start to listen.

1. Rising Immigrations2. Increasing inequality3. The Perception of corruption4. A big financial crisis

Talking About Generations

GenerationsMajor 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

Silent GenerationBorn 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!

Baby BoomersBorn 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.

Generation XBorn 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.

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.

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

Millennials

MillennialsMillennials 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

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

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.

Millennials

Comparing GenerationsMillennials use technology differently

What makes your generation unique?

Comparing Generations

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 99100101102103104105106107108

Series1

Millennials76,321

Gen-X59,302

Baby boomers69,897

hippies/“counterculture”Beatles Kingdom

World war II

World war IValues and traditionsMTV

Latchkeys

smartphonescomputers/net

computers/BASIC

Punk

Born at farms

TV

Religion

Gögn frá Hagstofunni

Radio/telegrams

Rás2Youtube

Social MediaSelfies

Bond

Movie starsQueen

Live AidSpotify Netflix

Silent and before30,054

game consoles

Arcades

Generations

Industrial/progressLP

CD

Key InsightResearch 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.

Then try to figure out the Snapchat generation

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