If you think about economic history as a series of technological revolutions, in which scientific breakthroughs are made and then diffuse, slowly, into our economy, setting off (eventually) a surge in productivity, this gives you hope for our economic future.

Carlota Perez points out that high inequality is a feature of the early stage of technological revolutions. “Both in the installation period of the mass production revolution – in the 1910s and 1920s – and in that of the current ICT one – from the 1980s to the 2000s – the income share of the top 1% of taxpayers tends to reach 25%.”

That’s good to hear because it suggests that, with the right settlement in social and economic policy (although note: in the past, this has meant radical change), we can now rise the next stage in our current technological revolution to a new golden age, a sustained period of falling inequality and broadly shared growth in living standards.


Chart from Perez is here.

Here’s the crux: this eventual golden age doesn’t unleash itself. We have to unleash it.

A crucial factor in the eventual uptick in productivity and broad-based growth is a change in the technological paradigm. The uptick comes when we abandon our loyalty to modes of production associated with the previous technological revolution. In our current case, case, then, the uptick will come when we free ourselves from Fordist modes of mass-production and hierarchical, bureaucratic organisation – approaches that were designed to work for the electricity revolution and not the digital revolution.

In other words, we need to mainstream digital-native ways of working: iterative/agile project management, less hierarchy, a try/fail culture, structuring organisations and work around tribes and multidisciplinary teams, a relentless focus on UX, design as function rather than aesthetics. Only then will we see the digital revolution appear in the productivity statistics.

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