FT Tech Tonic Harnessing the technological revolution
Nov 2, 2016
Carlota Perez of the London School of Economics discusses the need for radical changes to harness the benefits of the current technological revolution. Topics include the phases of technological evolution, green innovation driving capitalism, tax reforms for sustainable investments, and the role of governments in shaping a sustainable global economy.
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Two Phase Pattern Of Technological Revolutions
- Technological revolutions follow a two-phase pattern: an installation period of creative destruction, a speculative bubble, then a deployment period of broad social benefit.
- Perez illustrates this with five revolutions from the 18th century machines to today's information age, noting polarization and crashes in installation and wider diffusion in deployment.
Current Revolution Could Deliver A Global Golden Age
- The current information revolution has mirrored past patterns but produced multiple crashes and may still reach a global sustainable golden age.
- Perez notes we've had two big crashes so far and that the deployment phase could deliver a worldwide golden age if steered correctly.
Tilt Policy To Shape Technological Direction
- Governments must make socio-political choices to tilt the economy so technological gains benefit the many rather than a few.
- Perez points to postwar policies like suburbanization, welfare and consumer credit as deliberate choices that created mass demand and a sustained golden age.