Turnaround Challenge by Blowfield Michael;Johnson Leo;Johnson Leo; & Leo Johnson

Author:Blowfield, Michael;Johnson, Leo;Johnson, Leo; & Leo Johnson
Language: eng
Format: epub
Publisher: Oxford University Press, Incorporated
Published: 2013-08-15T00:00:00+00:00

Installation

The mass era reached maturity in the 1960s, and by the 1970s the countries at its vanguard, notably the USA, were suffering from stagflation and the onset of decay. At about the same time, there was a flurry of innovation in the ICT arena, and in 1971 the Intel 4004, the first commercially-produced microprocessor, was launched. Its first commercial use, according to one of ICT’s more famous offspring, Wikipedia, was in a calculator, the Busicom 141-PF, but its real significance was to spur the development of increasingly powerful micro-chips that were the basis for IBM and Apple personal computers and operating systems such as DOS. Computers themselves improved with innovations in hard disk drives, graphics, and the graphical user interface. The technology also opened the door to networking systems that in turn enabled, amongst other things, the global value chain revolution in business. Riding on the wave of increasingly powerful processors, new ways of production, management, consumption, and leisure have become the norm. From web browsers, to online social networks, to automated check-outs, none of this existed when Kim Kardashian was born in 1980, but by the time Bill Clinton was impeached following the Lewinsky affair in 1998, the infrastructure that would enable these developments was firmly installed.

And yet until the start of the new millennium there was nothing unusual about the ICT era. Jobs and Gates had emerged blinking from the gestation phase to experience the same kind of irruption enjoyed by Arkwright or Stephenson. As had happened with the introduction of revolving credit and joint stock in the nineteenth century, or hire purchase in the early twentieth, the new technology demanded a new type of investor and new investment vehicles. Kleiner Perkins was an early innovator in the venture capital model that became the lifeblood of hi-tech pioneers. Two months after Kim Kardashian was born, Apple Inc. heralded a long series of huge ICT IPOs when it went public for US$1.3 billion. There was the typical frenzy of investment in companies from the successes of Cisco and Genentech to the failures of Pets.com and eToys.com which respectively lost US$82.5 million in nine months and suffered a share price collapse from US$84 a share to US$0.09 in two years. In 2 000, the NASDAQ Composite Index rose to a few points shy of 5 000: a year later it was less than 2 000 points. The dot.com bubble had burst.

In techno-economic paradigm terms, this was a case of so far so good, but all that was about to change. Throughout the ICT era’s installation period, the mass commercial model struggled to retain its preeminence. Facing saturated domestic markets, companies in industrial economies turned to international trade. The high price of oil drove their costs up but also meant there was ample capital available for investment from resource-rich countries. Instead of being associated with a few industrialized economies that were accused of exploiting others, the mass era started to be seen as an engine of international economic development through an agenda of trade and investment.

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