Journal of Economics and International Finance Vol. 2(4), pp. 58-67, April 2010 Available online at http://www.academicjournals.org/JEIF ISSN 2006-9812© 2010 Academic Journals Review Paper Waves of technological innovations and the end of the information revolution Daniel Šmihula Institute of Political Science of the Slovak Academy of Science University of Central Europe, Skalica, Slovakia. E-mail: [email protected] or [email protected]. Accepted 19 February, 2010 The article is about new views on the theory of “long waves” and especially from the point of view of technological progress, importance of which is stressed. It developed a new conception of waves of technological innovations in a modern society (from 1600 AD). The last 5th wave (based on a progress in informatics and telecomunications) is just coming to an end. Today economic crisis (2008) must be seen also as the crisis of the end of the cycle of innovations. It could be overcome by a new technological revolution (post-informational technological revolution) which could start about 2015. Keywords: Crisis, innovation, invention, Kondratieffs cycles, long waves, post-information technological revolution, technological progress, waves of technological innovation. INTRODUCTION The term “information revolution”( Freeman, Christopher, industrial and information society are both just stages in Die Computerrevolution in den langen Zyklen der the development of modern society. Technolo-gical ökonomischen Entwicklung, München, Carl Friedrich von progress (For definition of technological progress see: Siemens Stiftung, 1985, p.31), which achieved wide- Dosi, Giovanni, Orsenigo, Luigi, „Coordination and spread currency in the period 1960 – 1980, reflected the transformation: an overview of structures, behaviours penetration of computers and information technology into and change in evolutionary environmnets“, in Dosi, the economy and everyday life. This revolution was Giovanni, Freeman, Christopher, Nelson, Richard, Silver- sometime supposed to represent a change in the berg, Gerald, Soete, Luc (editors), Technical Change structure of society as momentous as the Neolithic revo- and Economic Theory, London, Pinter Publishers, 1988, lution 9000 years ago, or the industrial revolution at the pp. 15-16) and innovations is integral and constant part start of the nineteenth century (Toffler, Alvin, The Third of such modern society and its economy. Wave, New York, Bantam Books, 1980, pp.5-11). The first “modern” or “western” countries were Nether- However, it would be more correct to say that since the lands (Kennedy, Paul, Vzestup a pád velmocí (The Rise seventeenth- eighteenth centuries we (At least Euro- and Fall of the Great Powers ), Praha, Nakladatelství peans, because this modernization started in Europe – Lidové noviny, 1996, p.94) and England (in 17th and from reason which are out of scope of this article 18th centuries) and the area of modernity had to spread (Landes, David S. Bohatství a bída národ ů; The Wealth step by step: Western Europe and Northern America in and Poverty of Nations; Praha, BB/art s.r.o., 2004, p.493, 1800 -1850, Scandinavia and Germany (Landes, David Jourdin, Michel Mollat du, Evropa a mo ře; L´ Europe et la S. Bohatství a bída národ ů (The Wealth and Poverty of mer), Bratislava, Archa, 1994, PP.128-164, 274-285 and Nations ), Praha, BB/art s.r.o., 2004, pp.292-305) in 1850 Kennedy, Paul, Vzestup a pád velmocí; The Rise and -1900, Japan( Landes, David S. Bohatství a bída národ ů Fall of the Great Powers ), Praha, Nakladatelství Lidové (The Wealth and Poverty of Nations ), Praha, BB/art noviny, 1996, pp. 21-52 ) have lived in a modern society s.r.o., 2004, pp.371), Latin America(Landes, David S. which is characterized by a non-stop stream of Bohatství a bída národ ů (The Wealth and Poverty of technological innovations (and economic growth Nations), Praha, BB/art s.r.o., 2004, pp.322), South, (Freeman, Chris, Louçâ, As Time Goes By, Oxford, Central and Eastern Europe in 1900 - 2000 (This process Oxford University Press, 2001, pp.26-27) and that was in Central and Eastern Europe delayed by the com- Šmihula 59 munist experiment) (Berend, Ivan T, An Economic demy Press, 1986, pp.89-91), this limit will be reached History of Twentieth-Century Europe, Cambridge, only more quickly. Of course, presented financial “tricks” Cambridge University Press, 2006, pp.172-189) and almost always stimulate even a demand for new several former Third world countries in 1980 - 2005 technologies and their development, especially if the (Hong-cong, Taiwan, Singapore, South Korea, Turkey, economy is approaching the described maximal potential parts of China and India)(Kennedy, Paul, Sv ět v 21. limit of production. století (Preparing for the Twenty-First Century ), Praha, In this context, a more accurate model would be the Nakladatelství Lidové noviny, 1996, 35). All following so-called Kondratieffs long cycles (Kondratieff, Nikolai, description of economic and technical developments The Long Wave Cycle, New York, Richardson and concerns parts of the world which were “in” the modern Snyder, 1984, pp. 25-29). These cycles in the modern society in a given time. post-agrarian economy were reinforced in the work of the A new technology or innovation (in the broadest mean- Russian economist Nikolai Dmitriyevich Kondratieff ing) (As a new technical device, organizational method, (Kondratyev, 1892 – 1938) (Kondratieff, Nikolai, The financial instrument etc. which enable higher efficiency Long Wave Cycle, New York, Richardson and Snyder, and better exploiting of sources (Freeman, Christo-pher, 1984, Freeman, Chris, Louçâ, As Time Goes By, Oxford, Perez, Carlota, „Structural crisis of adjustment, business Oxford University Press, 2001, p.67 and Freeman, cycles and invetment behaviour.“ in Dosi, Giovanni, Christopher, Die Computerrevolution in den langen Freeman, Christopher, Nelson, Richard, Silver-berg, Zyklen der ökonomischen Entwicklung, München, Carl Gerald, Soete, Luc (editors), Technical Change and Friedrich von Siemens Stiftung, 1985, pp.13-15 and 62) Economic Theory, London, Pinter Publishers, 1988, and the Austrian economist Joseph (1883 –1950) pp.45-49) makes possible to exploit much more natural (Freeman, Chris, Louçâ, As Time Goes By, Oxford, resources in more effective way. It is fully equivalent to Oxford University Press, 2001, pp.42-55 and Freeman, “…a gigantic expansion of resource supplies” (Rosen- Christopher, Die Computer revolution in den langen berg, Nathan, „The Impact of Technological Innovation: Zyklen der ökonomischen Entwicklung, München, Carl A Historical View “in Landau, Ralph, Rosenberg, Nathan Friedrich von Siemens Stiftung, 1985, pp.16-270. (editors), The Positive Sum Strategy, Washington, The first of the cycles defined by Kondratieff and later National Academy Press, 1986, p. 22). A rapid and long- by Schumpeter and their other followers (Duijn, J.J. van, term economic growth is therefore usually a result of new The Long Wave in Economic Life, London, George Allen technological innovations in industry and economy and Unwin, 1983, p.163) was the age of coal and steam (Freeman, Christopher, Die Computer revolution in den (1780 – 1840), which was facilitated by the first wave of langen Zyklen der ökonomischen Entwicklung, München, the industrial revolution, followed by the age of railways Carl Friedrich von Siemens Stiftung, 1985, pp.18-20 and and mass production (1840 – 1890), the second Kondratieff, Nikolai, The Long Wave Cycle, New York, industrial revolution and the age of electricity (1890 – Richardson&Snyder, 1984, p. 66). It is almost generally 1940), the start of which was the so-called technical accepted, that technology (in proper social conditions) is revolution. Later theorists added a fourth wave, the age the critical factor in the long term economic development of electronics and microelectronics (1940 – 80) beginning of modern industrial societies (Landau, Ralph, with the so-called scientific-technological revolution. The Rosenberg, Nathan (editors), The Positive Sum Strategy, current age, which began around 1980, should be the Washington, National Academy Press, 1986, p.vi and 7- age of information and telecommunications trigged by 10). And in the economy without additional sources from the information and telecommunications revolution “outside” (what our planet today is, all parts of the planet (Freeman, Christopher, Die Computerrevolution in den are discovered and distributed) a progress of technolo- langen Zyklen der ökonomischen Entwicklung, München, gies (in the broadest meaning) has stayed as the only Carl Friedrich von Siemens Stiftung, 1985, p.17). But significant engine of long-term economic growth (Boskin, Kondratieffs and Schumpeters cycles must be modified J. Michael, “Macroeconomics, Technology, and in order to correspond to modern experience. Economic Growth: An Intraduction to Some Important Issues“ in Landau, Ralph, Rosenberg, Nathan (editors), The Positive Sum Strategy, Washington, National STAGES IN THE DEVELOPMENT OF HUMANITY Academy Press, 1986, p. 36). All manipulations with low taxation, inflation, low interest rates etc. (instruments of For the reasons given above, it is clearly useful to divide the “business cycle)” can really speed up an economic the development of humanity into four stages: growth, but without innovations in technology they cannot 1. Hunter-gatherer (foraging) society. help to shift (enhance) the maximal potential limit of 2. A society in transition to a production economy and a