GoKawiilI have deliberately tried not to write too much about AI, because the signal gets swamped by the noise. But I think the picture is becoming clearer now. This week on The Next Wave, I’m going to re-publish versions of posts originally on my newsletter, Just Two: one from last summer, and one that goes live this week.
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Just by way of a thought experiment: what if the current surge in the bunch of technologies that goes under the label of ‘AI’ isn’t the beginning of a whole new technology surge, but is actually the final stage of the digital surge that started in the 1970s and accelerated at the turn of the century?
I’ve been wondering this for a while in a vague kind of a way because I haven’t been able to see the business model that supports the huge investment in AI in the USA. (I’ve written about this before on here.)
This is a long way in to couple of pieces by Nicolas Colin, the strategy and innovation blogger, who has been wondering the same thing, but a lot more coherently. He calls this ‘late cycle investment theory’.
The Perez model
Like me, he is a fan of the work of the academic Carlota Perez, who built on the work of Christopher Freeman to develop a model of how technology and finance interacted to create new long surges of investment, starting with canals and cotton, that run for 50-60 years. (She calls them ‘surges’ because unlike ‘waves’ each technology embeds itself in the society and its infrastructure.)
The two most recent surges are a cars/oil surge, which started in 1908, and the Information and Communications Technology, which started in 1971.
(Source: Carlota Perez)
I’m not going into all of the theory of the Perez model here—it’s online if you want to do that, and I have written about it elsewhere—but the relevant point for the present discussion is that it follows an S-curve, and the first half is slow going, as new infrastructure is ‘installed’, and some of it is below the radar. The internet was a closed academic network for most of the first part of its S-curve.
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