In 2045, will you look back with delight or regret?
In 2045, will you look back with delight or regret?
May 22, 2023
Today, the year 2020 is coming to an end. Finally, you may think given that we all have struggled to cope with the health crisis that overcame us this year. The word “crisis” originates in the Greek word krisis, which originally means “turning point” (in an illness when a patient either gets better or worse).
2020 was indeed a turning point for all of us in more than one way. Sure, what first comes to our minds here is COVID-19 virus — a (hopefully) once in a lifetime crisis that has forced us to confront the massive health-related, social, and economic challenges caused by a centennial pandemic. But 2020 was also a turning point in a positive, opportunity-generating way. This year, we’ve started a new long cycle of macroeconomic cutting-edge technological development: the Sixth Wave. For the next 25 years, a few innovative, leading-edge technologies will power the economic prosperity of countries, companies, and individuals alike. What does this all mean for you and me?
Going back in time
Close your eyes and go back in time 30 years ago. It’s the year 1990. How did your daily life look like back then?
What were you doing at that time?
How did you spend your day?
What gadgets and tools were you regularly using?
Did you already own a smartphone at that time? (Chances are not, which is why you also didn’t know the feeling of feeling naked when recognizing that you left home and forgot your mobile phone.)
Were you already surfing the Internet? (Surely not, as it only went live one year later. So, you didn’t spend hours each day surfing the web.)
Clearly, life was very different in 1990 compared to how we work and live our everyday lives today.
Now let’s shift our focus and think about companies. In 1990, the top 10 firms with the highest market capitalization in the Fortune 500 Ranking included three automotive companies (GM, Ford, Chrysler), three oil companies (Exxon, Mobil, and Texaco), two “tech companies” (IBM and General Electric), and one chemical (Dupont) and tobacco company (Altria formerly known as Philip Morris). In 1990, Apple was already part of the F500 club and ranked at position 96. But did you know any of the following companies in 1990: Google? Amazon? Facebook? Indeed, in 1990, none of these modern tech giants existed.
Have you wondered why I asked you to go back in time precisely to 1990? This year is generally regarded as the start year of the Fifth Wave of leading-edge technological development. During the past three decades, information and communication technology (ICT), the Internet, and later social networks were the engines that powered dynamic economic growth. The leading companies in the related industry niches that drove these technologies were those which quickly rose to prominence and, over time, gained high market caps in the stock market. Little wonder that in 2020, the “big 5” US tech companies (Microsoft, Apple, Amazon, Alphabet (the new holding company of Google), and Facebook.) take positions 1-5 in the S&P list of US companies.
Looking ahead to the next 25 years
Now let’s do the opposite of what we just did in our earlier mental experiment. Let’s think 25 years ahead into the future. Why 25 years? That the predicted duration of the Sixth Wave. (Here, you need to know that during the past 250 years, the long waves of leading-edge technology development have steadily accelerated by 5-10 years with each new cycle.)
In the coming 25 years, a new set of leading-edge technologies will emerge to drive economic performance of countries and give rise to entirely new and shifting industries. In the Sixth Wave, we are likely to see strong economic growth along three innovative technological meta-trends:
“Digital tech” will build upon, and extend, the Fifth Wave technologies of ICT, the Internet, and digital networks. But as we advance, we will witness the digital transformation of business and our lives through new technologies such as artificial intelligence (AI) and big data analytics, the Internet of Things, and autonomous vehicles, robots, and drones.
A second growth direction will be “human tech”, which includes already longer-established technologies like biotechnology or genomics, and also make use of new digital technologies to enhance and amplify the human body to increase our strength and mobility, improve our well-being, and possibly lengthen our life span.
Finally, “cleantech” will be a third major focus direction of the Sixth Wave. Under this label, we may sum-up all clean and green technologies that address critical challenges of humanity, such as climate change and the sustainability challenge (i.e., we need to reimagine our business practices and consumption patterns as by the end of this decade, we would need three planets Earth to regrow everything we consume by then). Cleantech will create radically new technological solutions and business models for cleaner energy, a cleaner environment, and maybe even cleaner food and consumption patterns. (Perhaps this trend will even promote “cleaner thoughts” to move a critical number of humans towards higher levels of consciousness to counterbalance the negative behavioral patterns of the majority).
Together, these three new technological developments will create new industries (while transforming old ones) that will propel sustainable economic growth in the next 25 years. The Sixth Wave will lead to drastic increases in productivity and create new job and investment opportunities. We will also see the emergence of new ventures who will rise to the top of the Fortune 500 in 2045 — the new Google-, Amazon-, and Facebook-equivalents of the Sixth Wave.
In 1990, and the following early Fifth Wave-years, a few courageous angel investors and venture capital firms made bold investments in unknown tech start-ups that promised to seize the potentially tremendous value creation opportunities offered by ICT and a rising new phenomenon called the Internet. Likewise, a few bold creative talents decided to forgo a “safe” corporate career in preference for starting or joining a new venture. Truth be told, some of these high risk-investors lost money in the Dotcom-bubble burst, just as some of the brave talents had to start anew after their venture collapsed. However, many start-up investors, co-founders, and early-stage employees hit the jackpot and became multimillionaires after their tech venture’s successful initial public offering (IPO). (And later on, many equity investors who bet on one or more of the Big Five Tech Companies participated in the massive gains in stock prices.)
Naturally, many potential investors, co-founders, and early-stage employees passed on the opportunity to invest in or get involved in Amazon, Google, and Facebook when they were still in their infancy days. With the benefit of hindsight, most of these more risk-averse people deeply regretted their poor judgment and lack of courage.
Today, we’re closing the chapters of 2020. In the coming years, the new Amazons, Googles, and Facebooks of the Sixth Wave will approach investors for funding, enchant top talents to join the founder team in a C-level position, and ask young talents to work for a low salary and the promise of a massive upside in the new ventures they are going to start.
So how about you? How do you intend to respond to the Sixth Wave in its critical early years? Are you going to ignore it or passively witness it as a spectator? Or do you want to get actively involved and ride the Sixth Wave? Will you dare to go for the upside potential it promises to the bold, hard-working, and —admittedly— lucky ones? And 25 years from now, what will you be known for — as a brilliant daredevil who spotted the opportunities of the new leading-edge technologies early on and seized upon them? Or as someone who turned down a chance to invest in or get involved in a promising Sixth Wave venture? Remember that “Hindsight is 20/20”, and that we are the result of our choices. So, choose wisely.
The long waves are explained in greater detail in my upcoming book The Executive’s Guide for Innovation. Check out our website for more information, and pre-order your copy there.
I also discussed the economic long wave theory (that is grounded in the domain of evolutionary economics and the work of the Austrian economist Joseph Schumpeter and, in particular, the Russian economist Nikolai Kondratieff) in an earlier blog article titled How cyclicality drives business and innovation.
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