Insurance InnovationsOctober 23, 2020
That said, today there are countless books on leadership, management, achieving success in business, and living the good life. To a certain degree, any of those books touch a common baseline with regards to advising the right thing, live the good life, and you’ll be rewarded with success. The commonality could lead one to discount all books of this ilk as hokey and contrived. Nevertheless, One writer whose books stand above the rest is Malcolm Gladwell. Gladwell’s book The Tipping Point, indicates an event of greatness in which title names occur when an idea, trend, behaviour or expectation exceeds a threshold and spreads like wildfire.
When a tipping point occurs, it may change the basics of business and be sudden. It goes without saying, history has seen many tipping points that have offered opportunities to use technology, thus creating leaps in innovation and transformation. She implies growth in economics takes place by successive surges of about fifty years, each driven by a technological revolution. Perez suggests core radical creations come, spawning a wave of interrelated investment. Each such revolution takes about fifty years to spread around the globe, and is portrayed by two unique periods: Installation and deployment. A typical installation period lasts years, but frequently ends in a speculative financial boom or bubble.
New businesses rapidly begin utilizing these technologies during installation periods, and new business models emerge for existing companies. History shows the inversion of a boom or a bubble collapse typically leads to a market correction. The installation period follows, weaving technologies into the fabric of business and society. The installation period is a time of creative structure and institutional re composition. New technology and business paradigms become the norm and have a tendency to drive long term growth and expansion of prosperous business models. Over the past couple of hundreds of years, there was a technology revolution every 40 to sixty Years, beginning with the Industrial Revolution in 1771.
The Industrial Revolution was followed at the age of steam and coal, iron and rail transport, that started in 1829. The days of steam, iron, coal and rail transport were followed by steel and heavy engineering in 1875, and after that the automobile age which began in 1908. The current era of info technology and telecoms started in 1971, and represents the 5th major revolution during this 200+ year span. As for today’s crisis, it’s now evident that the boom and crash came in just two episodes, the Internet frenzy which ended the .COM crash, and the credit bubbles of 2003-08 that resulted in the market crash and great recession now underway. Perez suggests the next two to 3 decades will be the deployment period through which business will start to again use new technologies to create a brand new company paradigm based on innovation. The financial crisis is indeed an once in a half a century, But one Perez asserts has occurred 4 times before over the last 200+ years.