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Carlota Perez - Golden Age or Another Crisis?
Carlota Perez. By 2020, our world could be in the middle of a sustainable golden age, but it depends on how we handle the current recession. Carlota Perez, professor of technology and socio-economic development at the Technological University of Tallinn, explains how the global economy depends on technological advances.
Extract from Carlota Perez on Golden Age or Another Crisis?
Carlota Perez: Carlota Perez
Carlota Perez: Most people think that technology just is continuous progress, continuous change. But in fact, technology changes by big chunks, forty to sixty years of deployment of each technological revolution. We now have our information technology revolution which began around 1970, but there were four before that. Every technological revolution diffuses in two main periods, the first period of about twenty or thirty years, that I've called installation, is a time when finance calls the shots. And the reason why it has to be finance is because finance is mobile and it can put it's money wherever. The old industries that are very powerful and very big are very conservative by then. Carlota Perez continues, when the new technology comes, you need people who are willing to risk on these young engineers who have crazy ideas. And after a while there is just too much money coming into finance and too much money coming into the stock market. And then you get a huge boom. And then you get a huge collapse. Every time, 1929 was one of those, in 1990 one again. Now, what happens after that, is that you have recessions, depressions, indignation, fraud - that everybody is angry; control finance. And normally, the state steps in. And favors production capital, instead of finance. Because by that time you already have the giants. I mean, there is Google, there is Intel, there is Microsoft - they're all there already. Those are the engines of growth. But they are also the transformers of every other industry. So, this is the time to shift, this is the time to move towards the golden age. A sustainable, global golden age that means lifting all boats. Enormous profits can be made, from the environmental industries. But it depends on us, it depends on our policy makers. It depends on the political opinions. Because it has got to be shaped, it will not happen just by the market. The market will just go and do whatever is best for each individual company, each individual investor. But, if you tilt the market in such a way, if you create fiscal and tax policies in such a way that people make much more money if they invest in the world, if they globalize. Then it will happen. That is exactly what the sustainable world would be about according to Carlota Perez. A world where profits are made, if you follow the rules. And the rules are such that they move you to save the planet. So we will save both the planet and the economy by having policies that favor environmental sustainability. Of course, the fact that there is the possibility of the golden age doesn't guarantee it at all. Not only that, it's right now the danger is that because finance is so powerful it is very likely that they will win the day. And that the golden age will not happen. If the world is not flourishing in 2020, a great opportunity will have been wasted. And that is a great shame. The possibility is undoubtedly there for a global golden age. It is the task of this generation to make it a reality.
Carlota Perez: Carlota Perez