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The Deployment Age by Reaction Wheel


Stashed in: Accelerating Returns

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Perez’ theory divides each cycle into two main parts: the installation period and the deployment period. Installation is from irruption to the crisis, and deployment is after the crisis. These are the ying and the yang of the cycle. Some of the differences between the two periods we’ve already mentioned—creative destruction vs. creative construction, financial capital vs. production capital, the battle of the new paradigm with the old vs. acceptance of the new TEP, etc.

A few other characteristics worth mentioning:

  1. In the installation period, much of the capital goes to building the infrastructure the technological revolution needs. The bubble causes it to be overbuilt, so as the deployment period begins there is excess infrastructure and low cost to use it. This happened with canals, railways, and most recently with the telecom infrastructure. The deployment period gets to take advantage of the low cost glut of infrastructure.
  2. In the installation period, much of the new technology needs to be ‘pushed’ to market: customers don’t necessarily understand the benefits and need to be sold on each new thing. In the deployment period, technology is ‘pulled’: customers demand the new technology and are often ahead of the technology companies on what they need and how they will use it. The sources of innovation shift from exploratory companies to forward-thinking customers.
  3. Also, in the deployment period, companies move from creating entirely new markets–as they must with entirely new technologies–to expanding and consolidating their existing markets. To appeal to more customers in a given market they must make their products both cheaper and easier to use.
  4. And last, during the deployment period the technology becomes familiar, easier to implement and repair. This means the economic benefits of tech knowledge that in the installation period accrued to a small, well-educated elite start to spread out across the population, lessening economic inequality.

I'm digging the first chart which implies we are only halfway through the ICT revolution. 

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