"The social and political challenge of the present paradigm shift"

1997. “The social and political challenge of the present paradigm shift”, Oslo:  Norwegian Investorforum, May 15-16.

(Text based on a presentation at the Workshop on "Evolutionary Economics and Spatial Income Inequality"; Oslo: The Other Canon Foundation)

Table of Contents:

1. The social and political challenge of the present paradigm shift long waves and paradigm shifts
Good times, bad times
Risks and opportunities; winners and losers
A shift in "common sense"
Learning and unlearning; resistance and pressures for change
Institutional innovations for the post-war "golden age"
The wide range of the viable
Organizational isomorphism
The socio-political challenge: understanding the new possibilities
Politics to center stage: constructing positive-sum strategy   


The world is approaching the twenty-first century under the stress of very powerful centrifugal trends. The forces that are leading to social exclusion are putting great strain on the idea that welfare could continue, increase and expand, on the national and international levels, as was a widely believed until the 1970's when the North-South Dialogue created high hopes for world development. Since the 1980's, unlimited wealth has been growing at the upper end of the income scale, leading to unimaginably luxurious and ostentatious life-styles, very difficult to justify socially, since they are often seen not as the result of investment in wealth production but of financial manipulation. Meanwhile, though unemployment has fallen in the U.S. in the midst of sustained asset inflation, it has remained stubbornly high in many European countries all through the 1990's and has even become a problem in Japan, a country that was characterized by full employment even while most of the world was immersed in stagflation in the 1980's. Income distribution has become more unequal in many developed countries and brutally so in Russia and Eastern Europe, after the collapse of the Soviet System. Critical poverty has grown to unbearable levels in most of Africa and Latin America, reversing many of the gains of the 1960's and 1970's.

This is all happening in the midst of a world amazed at the power and the potential of information technology and witnessing the accelerated and explosive growth of the industries and firms associated with microelectronics, computers and telecommunications. Yet, those spectacular successes of firms and countries connected with these new industries or riding the high technology wave through modernization and globalization, are also in sharp contrast with the prolonged difficulties experienced by many other firms and industries and with the other parts of the world, which, after having seen better times, are now suffering stagnation or decline, are burdened with unpayable debts and are experiencing acute social deterioration and political dislocation.

The question of sustainability, in social terms, is coming to the foreground. It seems that the time has come to find ways of reestablishing social cohesion.



Published 2002

'...the book fills an important gap in the literature on business cycles and innovations. I most strongly commend it to all those attempting to understand the past and future evolution of technology and the economy.'

Christopher Freeman, Emeritus Professor, SPRU,
University of Sussex, UK

'...Carlota Perez shows us that historically technological revolutions arrive with remarkable regularity, and that economies react to them in predictable phases. Her argument provides much needed perspective not just on history, but on our own times. And especially on our own information revolution.'

W. Brian Arthur, Santa Fe Institute, New Mexico

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Technological Revolutions Financial bubbles Installation Period Frenzy Deployment Period Golden Ages Dual strategy Techno‑economic paradigms Neo‑Schumpeterian Respecialization Synergy Turning Point Future markets Knowledge society Green growth Maturity Full global development Globalization Sustainability Socio‑economic development Paradigm shifts Irruption Market hyper‑segmentation