The Dynamics of Bubbles and Golden Ages
Chapter 2: Technological Revolutions and Techno-Economic Paradigms
8 Technological Revolutions and Financial Capital 2. Technological Revolutions and TechnoEconomic Paradigms A technological revolution can be defined as a powerful and highly visible cluster of new and dynamic technologies, products and industries, capable of bringing about an upheaval in the whole fabric of the economy and of propelling a long-term upsurge of development. It is a strongly interrelated constellation of technical innovations, generally including an important all-pervasive low-cost input,6 often a source of energy, sometimes a crucial material, plus significant new products and processes and a new infrastructure. The latter usually changes the frontier in speed and reliability of transportation and communications, while drastically reducing their cost. The irruption of such significant clusters of innovative industries in a short period of time would certainly be enough reason to label them as ‘technological revolutions.’ Yet what warrants the title for the present purposes is that each of those sets of technological breakthroughs spreads far beyond the confines of the industries and sectors where they originally developed. Each provides a set of interrelated generic technologies and organizational principles that allows and fosters a quantum jump in potential productivity for practically all economic activities. This leads each time to the modernization and regeneration of the whole productive system, so that the general level of efficiency rises to a new height every 50 years or so (see Figure 2.1). The main vehicle of diffusion of that set of generic ‘tools’ – hard, soft and ideological – which together modify the best-practice frontier for all,...
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