L05 Technological Revolutions
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When innovators try to envision how people will use their product they often have different ideas on what people want. Products that are of superior technology may fail and inferior succeed, only because the inferior product has some features that people are looking for. In this lecture we look at how new products or technologies get adopted my markets. We look at the Law of Diffusion of Innovation, which explains how this adoption happens. We also look at what it takes for a new innovation to move from being a visionary idea to a practical product, or crossing the chasm. Finally we explore the hype cycle. In this lecture we look at how innovation happens. We look at the slow hunch, the liquid network, the hummingbird effect, and serendipity.
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L05 Technological Revolutions
- 2. Modules Module 1 - Technology Evolution Module 2 - Innovation Module 3 - Business Transformation Module 4 - Infrastructure Module 5 - Algorithms and Platforms Module 6 - Future of Work
- 3. Module 2 - Innovation L05 Technological Revolutions L06 Innovation L07 Diffusion of Innovation L08 Becoming Invisible Assignment 2
- 5. Agenda Technological revolutions The Age of Oil, Automobile and Manufacturing Current revolution —similaries Generations
- 6. WHEN IN A TECHNOLOGICAL REVOLUTION THE HARDEST THING TO UNDERSTAND IS THAT YOU ARE IN ONE
- 7. We tend to overestimate the immediate impact of technology and underestimate the long-term impact Timing is everything
- 8. 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
- 9. WE EMPHASIZE TECHNOLOGY BUT IGNORE THE SOCIAL AND CULTURAL IMPACT
- 10. Is it really up to politicians with their 12 point plans? Economic Growth
- 11. 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
- 12. The 20th century was the age of automobile, oil and mass manufacturing Example of a Technological Revolution
- 13. THE WORLD IN 1899
- 14. Local and linear
- 16. 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
- 17. New Technological Revolution takes off
- 18. Henry Ford (1863 – 1947)
- 21. Car companies Hottest technology companies at the time
- 22. New Class Emerges Inequality rises - few people get very rich Right age, place, time, and sex Andrew MellonAndrew Carnegie Henry Ford John D. Rockefeller
- 26. 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.
- 28. The Great Depression Depression spread world-wide and lasted until the second Great War
- 29. Turning Point
- 30. 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
- 31. 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
- 32. Prosperity Benefits of the new technology spreads More productive economies
- 33. Golden Age
- 34. Post-war America - „The Glory Days“
- 35. STAGNATION
- 36. Improvements in technology are waining Younger generation feels left out Mistrust, status quo is questioned Stagnation Carlota Perez, Technological Revolution and Financial Capital
- 37. Technological Revolution INSTALLATION PERIOD TURNING POINT DEPLOYMENT Age of Oil and Automobile 1908 The Roaring Twenties 1929-33 & 43 Post-war Golden Age Source: Carlota Perez
- 38. 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
- 39. 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
- 40. 3. Industrial Revolution2. Industrial Revolution1. Industrial Revolution 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
- 41. Installation period Deployment Period Institutional recomposition Degreeoftechnologicalmaturity andmarketsaturation time Crash 2000-2008 Big bang Intel 4004 1971 Next big bang Techno-economic split IRRUPTION Financial Bubble Time FRENZY Golden Age SYNERGY MATURITY Source: Carlota Perez
- 42. 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
- 43. 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
- 44. 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
- 45. 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
- 46. 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, over investment
- 48. 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
- 49. The Synergy Phase: A Time for Production Golden age Infrastructure serves as engines of growth Wealth gets distributed as investment is in production
- 50. The Synergy Phase: A Time for Production Full employment - production Reign of the middle class New paradigms are now accepted and permeates every activity
- 51. 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
- 52. The Maturity Phase: A Time for Questioning Company mergers Migration of activities to less-saturated markets abroad
- 53. Age of Information and Telecommunications
- 54. 1947 Programmable all-purpose electronic computers start to have impact on big businesses and government Automation starts, jobs get lost IBM mainframes Mainframe
- 55. 1965 Minicomputers allow mid-sized companies and academia to have time shared computing power Automation continues Minicomputers
- 56. Fifth Technological Revolution starts Intel 1971 The Technology Trigger 1971
- 57. 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
- 58. IRRUPTION
- 59. Bill Gates Steve Jobs Michael Dell Larry Ellison Tech Companies
- 60. 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
- 61. FRENZY
- 63. 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
- 64. Mainframe 1947 Minicomputer 1965 PC 1981 1995 Internet Smartphone 2007 The Shortening Waves
- 65. 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
- 66. Installation period Deployment Period Institutional recomposition Degreeoftechnologicalmaturity andmarketsaturation time Crash 2000-2008 Big bang Intel 4004 1971 Next big bang Techno-economic split IRRUPTION Financial Bubble Time FRENZY Golden Age SYNERGY MATURITY Source: Carlota Perez
- 67. Is the turning point over?
- 68. The Danger in Turning points After synergy and maturity, unrest and new movement start to emerge and they are not silence, but people start to listen. 1. Rising Immigrations 2. Increasing inequality 3. The Perception of corruption 4. A big financial crisis
- 70. 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
- 71. 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!
- 72. 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.
- 73. 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.
- 74. 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
- 75. 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
- 76. 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
- 78. Millennials
- 79. 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
- 80. 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
- 81. Comparing Generations Millennials use technology differently
- 82. What makes your generation unique? Comparing Generations
- 83. 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 starsQueen Live Aid Spotify Netflix Silent and before 30,054 game consoles Arcades Generations Industrial/progress LP CD
- 84. 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. Then try to figure out the Snapchat generation
- 85. Next Innovation