Dando forma ao futuro com o auxílio da História. O estudo das revoluções tecnológicas revela regularidades significativas nos seus padrões de difusão. Uma delas é a mudança de padrões de consumo que ocorre na segunda onda de cada nova tecnologia, na sequência de um grave colapso financeiro. A revolução da informação encontra-se actualmente nesta encruzilhada e os desafios ambientais, juntamente com a globalização, estão a desenhar um futuro que ainda nos pode parecer improvável, mas que promete assemelhar-se ao impacto dos materiais sintéticos e à suburbanização no período pós-guerra.

1. Prof. Carlota Perez
Cambridge and Sussex Universities, U.K.
and Tallinn University of Technology, Estonia
Human Habitat 2010 Lecture Series
18th October 2010 - Lisbon
Building a sustainable
global golden age
for overcoming the crisis

2. The current crisis
is a problem
originated in the financial side
of the economy…
IT HAS HAPPENED BEFORE
MID-WAY ALONG
EACH TECHNOLOGICAL REVOLUTION
…with a solution
on the production side

3. What worked before will not work from now on
BECAUSE IN MARKET ECONOMIES
TECHNICAL CHANGE OCCURS BY REVOLUTIONS
Capitalism experiences pendular swings
about every three decades
THE MAJOR BUBBLE COLLAPSE
MARKS THE SWING OF THE PENDULUM
To a “golden age”
under the control
of PRODUCTION
aided by an active government
in order to fully deploy
the installed potential
From a “gilded age”
under the control
of FINANCE
with unfettered free markets
in order to install
the technological revolution

4. And each drives a GREAT SURGE OF DEVELOPMENT
and shapes innovation for half a century or more
FIVE TECHNOLOGICAL REVOLUTIONS IN 240 YEARS
The „Industrial Revolution‟ (machines, factories and canals)1771
Age of Steam, Coal, Iron and Railways1829
Age of Steel and Heavy Engineering (electrical, chemical, civil, naval)1875
Age of the Automobile, Oil, Petrochemicals and Mass Production1908
Age of Information Technology and Telecommunications1971
Age of Biotech, Bioelectronics, Nanotech and new materials?20??
Britain
Britain
Germany
USA
vs. Britain
USA
???
USA
Eachbeginsinacorecountryandspreadsacrosstheworld

5. A massive change in wealth creating potential
Why call them revolutions?
TRANSFORMING THE OPPORTUNITY SPACE AND
THE WAYS OF LIVING, WORKING AND COMMUNICATING
A powerful cluster
of new dynamic industries
and infrastructures
with increasing productivity
and decreasing costs
Explosive
growth
and structural
change
New generic technologies,
infrastructures and
organisational principles
for modernising
the existing industries too
A quantum
jump in
innovation and
productivity
for all
NEW INDUSTRIES and NEW PARADIGM FOR ALL
Because they transform the whole economy!

6. Continuous improvementStable routines
Human capitalHuman resources
Flexible / adaptable strategiesFixed plans
GlobalisationInternationalisation
Highly segmented dynamic marketsThree tier stable markets
Open interactive networks / local and globalClosed pyramids
Flexible/adaptable productionMass production processes
Environment as challenge and guideNo environmental concern
Innovative learning organisationsStatic Tayloristic organizations
Value network partnersSuppliers and clients
Modernisation and rejuvenation of all sectors
A radical change in managerial “common sense”
brought on by a different set of enabling technologies

7. AN IMPORTANT CLARIFICATION
GLOBALISATION
IS INEVITABLE WITH THE INTERNET
BUT…
…it is not about the end of national states
but about global companies
choosing what to do and where to do it
on a highly differentiated global space
Each territory defines its role
by choosing (or by not choosing)
a specialisation strategy

8. ANOTHER CLARIFICATION:
THE HYPERSEGMENTATION
OF MARKETS
(or the so-called long-tail)…
…is what facilitates the multiple specialisations
and re-specialisations
of companies and territories
Once there are infinite niches
in each product space
and systems for handling them
by transport and distribution systems
only lack of imagination
stands in the way of success
THE UNIVERSE OF THE PROFITABLE
IS VASTLY ENLARGED BY ICT

9. DEPLOYMENT (20-30 years)INSTALLATION (20-30 years)
Financial
bubble
THAT EACH GREAT SURGE GOES THROUGH TWO DIFFERENT PERIODS
It is due to resistance and difficulty in assimilating such major paradigm shifts
We are here Next
big-bang
Time
Degreeofdiffusionofthenewtechnologicalpotential
big-bang
“Creative destruction”
Battle of the new
paradigm
against the old
Concentration of
investment
in new-tech
Income
polarisation
LED BY
FINANCIAL CAPITAL
INSTALLATION (20-30 years)
Financial
bubble
“Creative
construction”
Use of
new paradigm
for innovation and
growth
across all sectors
Spreading
of social benefits
LED BY
PRODUCTION CAPITAL
DEPLOYMENT (20-30 years)
Recessions,institutionalchangeandroleshift
Turning
Point
Next
big-bang
From irruption
to bubble
collapse
From “golden age”
to maturity

10. FINANCIAL
CAPITAL
PRODUCTION
CAPITAL
Why this pattern? Why the role switch?
FIXED AND
KNOWLEDGE-BOUND
Long-term bias
FLEXIBLE
AND MOBILE
Short-term bias
Financial capital
can massively redirect resources
and “force”
new paradigm diffusion
Production capital is better
for carrying growth
and expansion
within an established paradigm
THE MARKET ECONOMY
HAS TWO DIFFERENT AND COMPLEMENTARY AGENTS

11. The shift from financial mania and collapse to Golden Ages
is enabled by regulation and policies to shape and widen markets
THE HISTORICAL RECORD
Bubble prosperities, recessions and golden ages
INSTALLATION PERIOD DEPLOYMENT PERIODTURNING
POINT
Bubbles of
first globalisation
Belle Époque (Europe)
“Progressive Era” (USA)1890–95
Railway mania
The Victorian
Boom1848–50
Canal mania
The Great
British leap1793–97
Internet mania
and financial casino
Global Sustainable
”Golden Age”?
2007
/08
-???
The roaring
twenties
Post-war
Golden age
Europe
1929–33
USA
1929–43
1771
Britain
1829
Britain
1875
Britain / USA
Germany
1908
USA
1971
USA
1st
2nd
3rd
4th
5th
GREAT
SURGE “Gilded Age” prosperity Maturity“Golden Age” prosperityCollapse &
Recessions

12. ONE
Technological innovation
in ICT
The INTERNET MANIA
in the 1990s
NASDAQ collapse
in 2000
TWO
Financial innovation
with ICT
The EASY CREDIT BOOM
in the 2000s
FINANCIAL MELTDOWN
in 2007-08
Understanding this is crucial
for identifying the nature, the consequences
and the solution of the current crisis
A unique feature of our time
is that the mid-surge bubble happened in two stages

13. WE ARE AT THE TURNING POINT
The length of the process depends on the social and political forces
The last time around it took over a decade and a major war
There are three tasks for governments after the major crash:
DONE… even overdone
This time global finance needs
both national redesign and
a global regulatory “floor”
STILL ON THE DRAWING BOARD
RARELY BEING CONSIDERED
AS SUCH
But recovery will be very difficult
without it
Intensive therapy
for finance1
Redesign of regulation
and financial architecture2
Enable a
STRUCTURAL SHIFT
in the real economy
3

14. THE UNIQUE FEATURE
OF THE PREVIOUS TURNING POINT
Recessions and depressions
that lasted 13 years!
Economists resisted Keynes
as anti-free markets
Business resisted Roosevelt’s New Deal
as communism
It took WWII as “dress rehearsal”
of industry-government collaboration
for market expansion
The structural shift
cannot happen without policy intervention
to tilt the playing field

15. What is this structural shift about?
What are its consequences?
What are its requirements for action

16. The second half
spreads innovation
across the board
to reap the full
economic and social
benefits
The first half
concentrates innovation
to set up
the new infrastructure
and to let markets
pick the winners
TWO LEVELS OF DIFFUSION
OF EACH TECHNOLOGICAL POTENTIAL

17. Moving from laissez faire
to the active come-back of the State
Passing control of investment
from financial to production capital
Shifting from supply-push to demand-pull
in investment and innovation
Moving from individualist focus
to collective interests
SETTING UP A WIN-WIN STRATEGY
BETWEEN BUSINESS AND SOCIETY
THE ELEMENTS OF ACTION
FOR THE STRUCTURAL SHIFT
AND THIS TIME
IN A GLOBALISED ECONOMY

18. Different periods: different role of the State
Installation
THE “GILDED AGE”
Deployment
THE “GOLDEN AGE”
Recessions,institutionalrecompositionandchangeover
The unrestrained market does it all
THE BAD:
•Skewed growth; polarised incomes
•Primacy of paper values over real ones
•Greed, corruption, short-termism
•Breakdown of collective values
PROMOTE LONG TERM GROWTH
•Regulate to restrain financial excesses
•Avoid monopolies; facilitate oligopolies
•Restore real values over paper ones
•Favour long-term investment in production
•Regulate and support innovation
in adequate “demand pull” directions
•Facilitate dense fabric of SMEs & SKIES
Intelligent come-back of the State
INSTABILITY AND EXCLUSION STABILITY AND INCLUSION
THE GOOD:
•Revive wealth creation
•Install the new industries
•Reward the innovators
•Overinvest in infrastructures
•Select the leaders
RE-ESTABLISH SOCIAL COHESION
•Income distribution
•Social safety nets
•Expansion and stability of demand
•Restoring collective values

19. A SHIFT IN THE DYNAMICS OF GROWTH AND INNOVATION
“Gilded Age” Installation
SUPPLY PUSH
“Golden Age” Deployment
DEMAND PULL
Recessions,institutionalrecompositionandchangeover
CONTEXT
Mature industries
are technologically exhausted
their markets are saturated
The old economy stagnates
The new technologies are only incipient
CONTEXT
The new engines of growth are ready
The new infrastructure widens and deepens
market access
The old industries are rejuvenated
The new paradigm has been learned
A huge potential for growth is installed
TIMES OF EXPERIMENT
AND TURBULENCE
TIMES OF BUILD-OUT
AND HARMONIOUS GROWTH
SOURCE OF DYNAMISM?
Finance for massive investment
in new technologies,
industries and infrastructures
competing to select
new engines of growth
and to rejuvenate the rest
SOURCE OF DYNAMISM?
Expansion of demand
(public and private)
and reshaping of its profile
(direct or indirect income redistribution)
to enable production growth
and constant innovation

20. FINANCE
in a
facilitating
service
role
A SHIFT IN THE DRIVERS OF INNOVATION
THE STATE
in a
facilitating
service
role
During deployment innovation in production depends on
EFFECTIVE INSTITUTIONAL AND POLICY INNOVATION
A vast free market experiment
The full flourishing
of the installed potential
PRODUCTION
and
THE STATE
as drivers
and innovators
DEPLOYMENT = demand- pull
FINANCE
and
THE NEW
ENTREPRENEURS
as drivers
and innovators
INSTALLATION = supply- push

21. Age of Steam, Coal,
Iron and Railways
1850s-1860s
Urban, industry-based
VICTORIAN LIVING in Britain
DEPLOYMENT PERIOD LIFESTYLE
Each style became “the good life” redefining people‟s desires
and guiding innovation trajectories
Age of Steel and
Heavy Engineering
1890s-1910s
Urban, cosmopolitan lifestyle of
THE BELLE EPOQUE in Europe
Age of the Automobile,
oil and Mass Production 1950s-1960s
Suburban, energy-intensive
AMERICAN WAY OF LIFE
2010s-20??s
Will the developed and emerging
countries develop a variety
of ICT-intensive and “glocal”
SUSTAINABLE LIFESTYLES?
Age of global ICT
EACH GREAT SURGE HAS BROUGHT A CHANGE IN LIFESTYLES
with new life-shaping goods and services at „affordable‟ prices

22. An example: The emergence of the „American Way of Life‟
as the paradigm shift from the Belle Époque…
Refrigerators and central heatingIce boxes and coal stoves
Doing housework with electrical equipmentDoing housework by hand
Preference for disposable plastics of all sortsPaper, cardboard, wood and glass packaging
Suburban living separate from workUrban or country living and working
Mass media, radio, movies and televisionLocal newspapers, posters, theaters, parties
Automobiles, buses, trucks,
airplanes and motorcycles
Trains, horses, carriages, stage coaches,
ships and bicycles
Synthetic materialsNatural materials (cotton, wool, leather, silk..)
Refrigerated, frozen or preserved food
bought periodically in supermarkets
Fresh food bought daily
from specialized suppliers
FROM ENERGY-SCARCE LIVING
Energy is expensive and often inaccessible
TO ENERGY-INTENSIVE HOMES AND MOBILITY
Energy is cheap and its availability unlimited
…all strongly aided by advertising, business strategies
and government policies

23. THE TECHNOLOGICAL POTENTIAL
changes the relative cost structure and marks the direction of change
It is a huge opportunity space for innovation, growth
and radical changes in lifestyles
FROM THE LOGIC
OF CHEAP ENERGY (oil)
for transport, electricity,
synthetic materials, etc.
TO THE LOGIC
OF CHEAP INFORMATION
its processing, transmission
and productive use
Preference
for services
and intangible value
Huge potential for savings
in energy and materials
Preference
for tangible products
and disposability
Unthinking use
of energy and materials
Unavoidable
environmental destruction
Capacity for
environmental friendliness
The techno-economic paradigm shift happening since the 1970s-80s

24. YET, THE NEW PARADIGM IS STILL WRAPPED IN THE OLD
WHY? Because in the crucial 1990s we had cheap oil and cheap Asian labour
which favoured the stretching of the old marketing and consumption patterns
Mass production disposability and high use of energy and materials are still with us
An automobile in 1898
It‟s just like the first automobiles
that began looking like horse driven carriages
Reproduction: L.De Vries. 1972
TO CONTINUE ON THIS ROUTE WE WOULD NEED SEVEN PLANETS!

25. CHANGE IN THE ECONOMICS OF THE PRODUCTION,
TRANSPORT AND DISTRIBUTION OF TANGIBLE GOODS
Optimal relocation and geographic re-specialisation of physical production
Gradual redesign of the consumption patterns for the “good life”
Rising prices of oil
and raw materials
Rising packaging and
freight costs
Visible effects of
increasing global
warming
Rising climatic risk
CHANGE
IN BUSINESS
STRATEGIES
CHANGE
IN GOVERNMENT
POLICIES
THE UNAVOIDABLE PATH OF THE CURRENT GLOBALISATION PATTERN

26. Firm and intelligent
policy action, business strategies
and social decisions
can take us there!
WHY WAIT
UNTIL THE PLANET FORCES US
TO CHANGE COURSE?
AND IT IS PROBABLY
THE ONLY WAY
OUT OF RECESSION

27. Technologically
feasible
Socially
acceptable
Economically
profitable
TECHNOLOGY ONLY DEFINES THE SPACE OF THE FEASIBLE
The factors defining the space of the acceptable and the profitable
change over time
… AND ARE ALSO CHANGEABLE!

28. THE SUPPLY
opportunity space
THE DEMAND
opportunity space
The range
of the technologically feasible
together with
the capabilities
to make it happen
The range of the
economically profitable
and socially acceptable
as defined --and modified--
by policy and social
or other factors
THE BETTER THE MATCH
BETWEEN THE DEMAND AND SUPPLY SPACES
THE MORE DYNAMIC THE ECONOMY
TWO COMPLEMENTARY OPPORTUNITY SPACES
FOR INNOVATION

29. THE ELEMENTS OF THE DEMAND OPPORTUNITY SPACE
Sources of
DEMAND
DIRECTIONALITY
Sources of
DEMAND
VOLUME
Supply
opportunity
space
The coherence and synergy among the elements
generates self-reinforcing loops
ENABLERS
New paradigm
Generic technologies
Infrastructures
Relative cost structure

30. HOW WAS
THE PREVIOUS
GOLDEN AGE
UNLEASHED?
?
Creating a dynamic national opportunity space
for deploying the potential of mass production

31. THE DEMAND OPPORTUNITY SPACE
THAT SHAPED THE POST WAR GOLDEN AGE
DEMAND VOLUME,
PROFILE
AND TRENDS
Welfare State
Labour unions
Public procurement
Credit systemSPECIFIC
DEMAND
AS DIRECTION
FOR INNOVATION
Suburbanisation
Post-war
reconstruction
Cold war
Cheap oil
and materials
Universal electricity
Road and airway
network
INNOVATION
ENABLERS
FOR MASS
PRODUCTION
The various elements were provided in different proportions
in each “First World” country

32. A POSITIVE-SUM GAME
THAT ACHIEVED
THE GREATEST BOOM
IN HISTORY
Now we are facing
a global economy
CAN A BOOM
BE UNLEASHED AGAIN?

33. The new global
positive-sum
game
ICT
“GREEN”
FULL
GLOBAL
DEVELOPMENT
Full internet access
at low cost
is equivalent
to electrification
and suburbanisation
in facilitating demand
(and, this time,
also education)
Revamping
transport, energy,
products and production systems
to make them sustainable
is equivalent to
post-war reconstruction
and suburbanisation
Incorporating
successive new millions
into sustainable
consumption patterns
is equivalent to the Welfare State
and government procurement
in terms of demand creation

34. And the elements are interconnected
ICT
“GREEN”
FULL
GLOBAL
DEVELOPMENT
But we need policy consensus
involving government, business and society
Internet access is
the social
and geographic frontier
of the global market
ICTs are the main
enabling instruments
of sustainability
Only with sustainable
production and consumption patterns
Is globalisation possible

35. “GREEN” is not only about
saving the planet
It is about saving the economy
and having a high (but different)
quality of life
GLOBAL DEVELOPMENT
is not only
a humanitarian goal
it is about healthy growth,
markets and employment for all

36. • Natural vs. synthetic
• Minimalist design
• „Gourmet‟ and organic food
• Exercise for well being
• Small vs. big
• Multipurpose products
• Working from home
• Solar power as luxurious
as well as electric cars
• Intense Internet use
Part of the paradigm shift
is happening
among sophisticated
consumers
There is still
a long way to go
THE CHANGE IN PREFERENCES BEGINS AT THE TOP OF THE INCOME SCALE
AND SPREADS BY IMITATION …AND AFFORDABILITY
• Durability
• Very high quality vs. quantity
• Reparability and upgradability
• Anti-waste, pro-recycling
• Low carbon footprint
• Customised vs. standard
• Services vs. tangible products
• Active & creative “prosumer”
vs. passive consumer
• Etc. etc.
THE NEW LUXURY LIFE WOULD INCREASE SATISFACTION
WHILE MAXIMISING THE PRODUCTIVITY OF RESOURCES

37. But the change will not come
by guilt, fear or obligation
But by desire and aspiration
“GREEN”
HAS TO BECOME
FASHIONABLE!

38. THE QUESTION IS HOW TO GO
FROM AN ENLIGHTENED MINORITY
(by education, consciousness or wealth)
TO THE GREAT MAJORITIES
The new green
luxury life pattern
becomes fashionable
Advertising and
company strategies
and lobbying
go in a green direction
However it starts, the process goes through
multiple self-reinforcing feedback loops
Government
tilts the playing field
strongly in
favour of green

39. Setting up the framework for a sustainable global golden age
THE ACTORS
Government
Business
Civil society (especially
NGOs)
Universities
Media
THE MEANS
Building a widespread consensus
Innovative policies
to change market conditions
A tilted playing field on a global scale
THE GOAL
A “green economy”
A global
“man-on-the-moon”
project
To be effective, the changes and the policies must be clear, reliable,
enforceable, long-term and commanding widespread agreement
THE LEVELS
Global
National
Regional
Local

40. UTOPIAN OR REALISTIC?
It sounded utopian to say
in mid-1930s DEPRESSION:
Blue collar workers will have
lifetime jobs and
fully equipped suburban houses
with a car at the door
But it was realistic:
Increasing wages created
many more millions of consumers
for mass production and sustained growth
…or in the late 1960s:
Some of the values
of the hippie movement
[back to natural materials,
organic food, etc.]
will become the luxury norms
Innovations in natural textile fibres
have transformed the world of fashion
Innovation in distribution logistics
have made organic foods the premium segment
in supermarkets
Shifts in consumption patterns shift profit-making opportunities
Most colonies
will gain independence
Rising middle classes in the developing world
adopted the “American Way of Life”
widening world markets for mass production

41. THE TECHNOLOGICAL STAGE
IS SET TODAY
FOR THE GLOBAL GOLDEN AGE
OF THE 21st CENTURY
It is up to business, government and society
to agree on the convergent actions
for making it a reality
Will it be a success or a wasted opportunity?
WE SHALL ALL BE RESPONSIBLE
FOR THE OUTCOME