Forecasts for and statements about the future are such a thing ... Exciting, interesting and also sometimes exhilarating. According to the theory and model of Nikolai Kondratyev, we are in for tough years and decades economically and socially. We don't quite go along with that. Nevertheless, it is worth taking a quick look. Maybe the man is right after all?
Nikolai Kondratyev is probably not well known to most people. In circles of economic theorists and futurologists, however, he is very well known. In the mid-1920s, the Soviet economist published his theses on the cycles of the economy - in the context and interplay of technological and social developments. Admittedly, this is still controversial today; there are proponents and opponents of his models. Joseph Schumpeter, for example, one of the outstanding economists of the 20th century, had also studied it intensively and coined the term "Kondratyev cycles".
Kondratyev cycles are "long waves". And before we waste a lot of words here, here is a picture that quickly gets to the point:
If you look at it, you can see, for example, that the world economic crisis of 1929 was well located or predicted, as was the development of information technology. Of course, this has not been predicted exactly, i.e. that it is IT, but its effects can be observed.
With IT and informatics, the Kondratjew model could change. Because here, developments suddenly happen much faster, the results have an ever greater impact. The evolutionary process is getting shorter and shorter and the impact on society and further innovations is getting stronger and stronger. Just as an example:
Thirty years ago there were no mobile phones. About 15 years later, the first iPhone revolutionised the world in previously unknown dimensions. And today? Marc Benioff, founder and CEO of Salesforce, once pulled his smartphone out of his pocket at an event four or five years ago and said: "I always have my entire company with me - on here." Ten years ago, no one would have believed him. Development and innovation phases are simply getting shorter and shorter. Also precisely in matters of artificial intelligence.
Julien Offray de La Mettrie and his 1748 work "L'Homme Machine" are often referred to as the earliest source for the term "artificial intelligence". But the idea, the theory, is even older and goes back to the ancient world. Here are just three keywords: Homunculus, Golem, Frankenstein. In popular terms, C-3PO from Star Wars is probably the best-known example, known to almost everyone. Then there is Alan Turing and his essay "Computing machinery and intelligence" as well as the Austrian-British philosopher Karl Popper, who, among other things, also dealt with the theories of Alan Turing. All just fiction, philosophy, theory and belief and future stuff? Well, for many people Siri or Alexa are now almost firm friends ...
The development of artificial intelligence has been rapid, for years now, and continues to gather pace. And AI has long since entered our everyday lives. Many people have already had contact with it - often without knowing it. And what can be expected in 15, ten or even five years, we dare not to go out on a limb. One thing is certain, however, and here we come full circle back to Kondratjew: the decline of the last wave will not be as dramatic as it was in previous cycles. This is probably due to the fact that innovations today are not the result of a bottom with a consequent depression, but take place constantly, even in times of prosperity. At ever shorter intervals.
It is fair to say that futurologists are walking onto extremely thin ice. Always have been. In history there are a number of predictions that seem amusing today. But among them are also some that were quite accurate. Here is an illustrious compilation of how people imagined the future in 1910. A few examples:
That was in 1900. Now you might think that hardly anyone comes up with such ideas of the future today. But it's true, not so long ago, the renowned Zukunftsinstitut in Germany predicted that nanotechnology would be a driving mega-trend in the coming decades. Since then, however, hardly anything has happened. In terms of AI, however, there has been. Speech and text recognition, for example, even if that looks a little different from what is shown above. It is simply thin ice. But we are taking the plunge:
Artificial intelligence is more than just hype. (Popular and attention-grabbing demos like robots doing somersaults have nothing to do with it). AI is progressing, in very big leaps and bounds, and will have a significant impact on society and thus on the economy - hopefully purely in a positive sense. The areas of application are becoming more diverse, the possibilities greater. And with every step, further dimensions open up (unfortunately also in a negative sense, such as the arms industry and warfare). This leads us to say that the predicted impending bottom of the 5th Kondratjew cycle is probably postponed. If one follows Kondratjew and Schumpeter and believes this theory that will come to pass.
Perhaps some economic theorists will take another look at Kondratjew and the long waves and see how the frequency and amplitude might develop in the future. We would welcome it.