Waves & Cycles are all the rage

Waves & Cycles are all the rage

Written by Mark Swilling on 2012-04-13 06:29:16
Resources the focus of the next wave?

This week I came across 5 publications that attempt to understand the current global crisis as part of a wider set of historical 'waves' or 'cycles'. Like Chapter 3 of the Just Transitions book they want to peak into the future by projecting long-wave patterns into the future. Remarkably, they all come to very similar conclusions (using different conceptual languages to Just Transitions), i.e. that the next long wave is going to be about technologies that counteract the rising cost of resources and energy.

The publications are as follows:   

 

  • Motianey, A. 2010. SuperCycles: The New Force Transforming Global Markets and Investment Strategy. Columbus, OH: McGram-Hill
  • Allianz Global Investors. 2010. The sixth Kondratieff - long waves of prosperity. www.allianzglobalinvestors.de/capitalmarketanalysis, Allianz Global Investors, Kapitalanlagegesellschaft mbH, Mainzer Landstraße 11–13, 60329 Frankfurt am Main
  • Standard Chartered. 2010. The Super-Cycle Report. https://research.standardchartered.com
  • Bradfield-Moody, J. & Nogrady, B. 2010. The Sixth Wave: how to succeed in a resource-limited world. Sydney: Random House.
  • Rifkin, F. 2011. The Third Industrial Revolution: How Lateral Power is Transforming Energy, the Economy and the World. New York: Palgrave MacMillan.

There is, of course, the McKinsey report that also focuses on long waves, but with a very strategic and specific focus on resources - or what they call the coming 'resource revolution'. See:

  • McKinsey Global Institute. 2011. Resource Revolution: Meeting the world's energy, materials, food, and water needs. www.mckinsey.com/mgi

For a sobering check against 'green economy' hype and optimism, see from a sceptical UNCTAD economist:

  • Hoffman, U. 2011. Some reflections on the climate change, green growth illusions and development space. United Nations Conference on Trade and Development. Geneva: UNCTAD, Discussions Papers No 25.

What is interesting about these publications on Kondratief cycles or long waves of innovation is that they are all appealing to businesses and venture capital firms to stop thinking purely in terms of the short-term and to start thinking long-term. However, as the other blog I wrote today suggests, the rules of the game incentivize short-term thinking. What is clear, however, is that venture capital does seem ahead of the game - the book entitled The Sixth Wave provides evidence that in the USA venture capital investments in cleantech have overtaken all other sectors. However, this is not what shows up in measurements of profits or growth - what venture capital invests in today may only reflect in profits and/or significant growth in future (5, 10 or even 20 years from now). This provides evidence to support the argument in Chapter 3 of Just Transitions that we are looking it is the sixth wave that will deliver a more sustainable world and not the greening of the fifth wave.

Mark Swilling, Lynedoch, 13 April 2012.