As we stand on the precipice of the Deployment Age, it's crucial to understand its implications. This era, marked by the widespread implementation of cutting-edge technologies, promises to reshape our world in ways we can only begin to imagine.
A couple of weeks ago James Gross, co-founder of Percolate, had me speak at their Transition conference.
I talked about Carlota Perez’ theory that describes the path a technological revolution, like the Industrial Revolution, takes and the social, economic, and institutional changes that go along with it
- If it is correct, it should allow us to predict what will happen next in the current technological cycle
- Each cycle is initiated by a group of technologies interacting to create a “Technological System”
- A Technological System is a set of technologies that interconnect as a platform to allow other innovations to occur
Susan Lawler read early drafts of this talk and provided critical feedback. Thank you..
Meadows, Donatella, Thinking in Systems: A Primer, first paragraph of chapter one
Types of cycles:
Installation is from irruption to the crisis, and deployment is after the crisis
- In the installation period, much of the capital goes to building the infrastructure the technological revolution needs.
- Deployment period: new technology needs to be pushed to market. 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
- Companies move from creating entirely new markets to expanding and consolidating their existing markets
- During deployment period, technology becomes familiar, easier to implement and repair.
Software eats the world and everybody ignores it
Over the next ten years, ICT will be everywhere, but so integrated into products that it will be invisible.
- How to adjust your strategy for this?
- Stop considering ICT a feature and make it a requirement: using the technology where it fits is no longer a feature but a requirement.
Innovation was inside, or controlled by, incumbents
Incumbents were less anxious about being disrupted by contenders
- Companies continued to think of themselves as daring innovators even as the business climate shifted away from entrepreneurism
- The turn away from innovation was not because innovation was less revered, it was revered so highly that corporate executives continued to tell themselves they were fiercely competitive innovators
- In a corporate world safe from the threat of upstarts, transformative innovation was economically unsound
If you use ICT in your product, it needs to be seamless
Don’t scrimp on user interface and user experience design
- The technology becomes ubiquitous, but innovation itself becomes ubiquitous
- This means that companies can, and have to, make innovation part of their normal business processes
- Intrapreneurship and skunkworks are replaced by internal innovation processes which, while ineffective at producing radical innovations, allow controllable and measurable sustaining innovation
- Corporate venture capital, whose point is to provide a view into the direction and speed of entrepreneurial innovation, will become passe
- Skunkworks and innovation divisions had their place when companies needed rapid response to a looming threat and established structures and dynamics sabotaged efforts to build innovations that threatened core business line
How much money could Google Ventures possibly make, and what would it matter to a company that has after-tax earnings of $15 billion a year?
The small relative size and one-time nature of GV’s earnings probably adds about nothing to Google’s share price.
- GV can’t be about the money – it’s an artefact of the deployment age as entrenched companies try to prove their worth to society through cutting-edge
Where are we in the cycle?
Perez, in a 2013 paper, says we are now in the deployment period
- This has big consequences for how you run your business.
- Financial capital in this cycle is none other than yours truly, the venture capitalist
- Is our job done?
What will third-party funding for innovation look like?
Perez predicts that ICT funding will move entirely to production capital, and next-wave technological funding will be almost impossible to procure.
