Waves Of Innovation
Could an insight into the future be revealed through the optics of six long waves of innovation spanning 250 years?
So, let’s zero in on the theory of innovative cycles, developed by economist Joseph Schumpeter, which sheds light on six long waves of innovation that defined previous decades since 1750.
These six long waves of innovation begin with two distinct phases of the industrial revolution, the first being between 1750 and 1850, and the second between 1850 and 1914
We find ourselves riding sixth of the long waves of innovation were the key breakthroughs defining the current era of digitalization, software and secure global network, automation, and artificial intelligence.
Moreover, as advanced economies spearhead the high-tech knowledge economy so too are ethical belief systems progressing. So as human intellect advances, through technology, more efficient ways of providing goods and services are discovered and an abundance of wealth is created by companies able to apply the technology.
Then when Darwinian survivalism is no longer a challenge, human progress is made in the development of ethical belief systems.
Sixth of the long waves of innovation could also progress ethical belief systems
In other words,socially responsible investing, ESG investing companies with a high environmental and socially responsible score rating are likely to see an increase in capital flows as a coming generation of investors embrace ESG investing ideals.
What are these six long waves of innovation?
The First Wave, the key breakthroughs of the periods between 1785 to 1845, included water power, textiles, and iron, and it lasted 60 years.
During the industrial revolution, the first factory emerged, was a cotton mill in Britain.
The Second Wave was marked by key breakthroughs in steam power, rail, and steel, and it lasted 55 years from 1845 to 1900.
Electricity chemicals and the internal combustion engine were the key breakthroughs between 1900 and 1950, a fifty-year period, which defined the third wave.
Henry Ford’s Model T introduced the assembly line, which revolutionizes the automation industry epitomized the era.
The Fourth Wave, a period between 1950 and 1990, also had its share of key breakthrough technologies ranging from Petrochemicals, Electronics, and aviation. The Forth wave lasted 40 years.
Digital networks, software, and new media defined the fifth wave, which was the period between 1990 and 2020, which lasted thirty years.
In 1990, 2.3 million people used the internet. By 2016 it reached 3.4 billion people.
The Sixth wave, the current period, has some overlapping of the fifth wave
Moreover, as climate change policies intensify, we will see a movement away from burning fossil fuels for energy. The electrification of mass transport is just beginning as changing policy, and consumer preference moves away from fossil burning engines to electric cars.
In the sixth wave, we see an emphasis on clean technologies
Even the global digital ecosystem built on the Ethereum secure blockchain network is being developed with energy efficiency in mind, requiring fewer resources as it migrates from a Proof of Work to a Proof of State system.