Wednesday, April 16, 2014

Over at UD, I have put up a post on:

Kirk Durston on “God and Science – Is there a Conflict?” . . . food for thought

(Note especially the clip from a recent announcement on how Stanford investigators have compiled a simulaiton model of the simplest known independent life form, M genitalium, and their use of terms linked to the reverse engineering of life and the onward prospect of design of life in molecular nanotech labs. Intelligent design of life is now effectively a done deal, starting with existing genetic engineering. So, on vera causa, we are fully entitled to point to the known fact of such engineering, and to contrast the absence of observed evidence that blind undirected chance and mechanical necessity can create such sophisticated, organisation and information rich integrated functional systems. )

 I embed the video here:

Kirk Durston on God and Science: Is there a Conflict? from Power to Change - Students on Vimeo.

Food for thought. END

Tuesday, April 15, 2014

Sci-tech watch, 16: More on Bussard's suggested polywell fusion reactor

Energy is of course one of the critical technologies we need to watch for a K-wave breakthrough.

Accordingly, here is something more on the polywell fusion reactor (cf. the earlier KF post, here and HT the forum thread here):

(Folks over at Talk-Polywell, thanks.)

Food for thought, as are other ideas not on our radar screens. END

Monday, April 14, 2014

A thought on the importance of sound, timely policy and wise, prompt action . . .

Just thought it important to underscore this as we are apt to confuse the persuasiveness of rhetoric for the soundness of what one does as a result of being persuaded:

Policy must be sound, and it must be competently carried out in good time.

Sounds sooo simple, so commonsensical, even, so obvious . . . 

Sadly, not so. 

Often, the sound cuts across our every inclination, demands studious investigation, thought and careful reasoning and consultation; and, requires a setting aside of interests, desires and feelings we will find ever so hard to do. Then, not satisfied with so much effort, it calls for energy, competence, diligence and promptness in action. 

As in: no more wonderful (and duly expensive) studies sitting on shelves or in filing cabinets, unread and unheeded.

And so we are back to a familiar challenge: if not now, then when? If not here, then where? If not us, then who? END

PS: A test -- if you are speaking to or influencing decisions on (or even voting regarding)  matters economical, have you mastered the sort of issues that are pointed out here or the like? If not, do you find it a dreary burden to think about taking the sustained effort of reading, viewing and reflecting then drawing conclusions that make sound good sense this would require? What is such telling you?

BRIDGING: Product strategies and the product life cycle curve, opening up Mass Customization (including for tourism) . . . implications for a region on the wrong side of Kondratiev wave Schumpeterian creative destruction

As a footnote on the life cycle curve in the context of the Boston Consultants Group Growth/Share Matrix, let us observe a model of "typical" S-curve market growth and saturation patterns for strategic business units and their major products:

 A further perspective on strategic choices and patterns is here. It brings out how innovation creates value and head room for pricing across the range from penetration to skimming the cream . . . and thus for product ranges with basic to luxury features and customisation, across price points.

First, the Porter value-producing chain sets a context:

 Then, we look at key competitive advantage factors that make best use of this chain, through enhancing value to customers and controlling costs, thus opening up pricing room for a product range across price-points:

Also, cf. below on the "stuck in the middle and/or stuck with high cost undifferentiated goods or services problem (i.e. overly costly "commodities")  -- a problem not without relevance to the Caribbean . . . just say, sugar and bananas:

This pattern can be extended to considering the market for a key technology innovation, and how it can dominate the world, starting from one or a few initial centres then diffusing across the world along trade routes. This leads on to the K-wave (Kondratiev wave) pattern as seen previously. Simplifying the curve and summing as a series of cumulative Solow production functions joined up as successive S-curves, we can see how major innovations would naturally give rise to a long wave growth pattern:

 A more complex model would bring out recessions and depressions, as well as shorter cycles that "ride" on the long wave pattern, creating a much more typical bouncy or jerky pattern, and shocks and general noise would also create further disturbances. Thus, on the whole there is an underlying cumulative trend of progress, but there are also periods of boom and recession. 

For instance:

In this context, while we can hardly expect the Caribbean region to dominate the world economically, we can probably find profitable niches . . . and a challenge is to allow BCG problem children or question-mark products and dogs to develop into profitable niche markets . . . that give us sufficient prosperity and stability to have a base for sustainable development.

It is noteworthy that in a networked world with automated, computer controlled manufacturing systems, mass customisation offers a potentially decisive advantage of high differentiation and penetration pricing . . . "value [for money]" pricing. 

Wiki summarises usefully:
Mass customization, in marketing, manufacturing, call centres and management, is the use of flexible computer-aided manufacturing systems to produce custom output. Those systems combine the low unit costs of mass production processes with the flexibility of individual customization.

Mass customization is the new frontier in business competition for both manufacturing and service industries. At its core is a tremendous increase in variety and customization without a corresponding increase in costs. At its limit, it is the mass production of individually customized goods and services. At its best, it provides strategic advantage and economic value . . . .
The concept of mass customization is attributed to Stan Davis in Future Perfect[2] and was defined by Tseng & Jiao (2001, p. 685) as "producing goods and services to meet individual customer's needs with near mass production efficiency". Kaplan & Haenlein (2006) concurred, calling it "a strategy that creates value by some form of company-customer interaction at the fabrication and assembly stage of the operations level to create customized products with production cost and monetary price similar to those of mass-produced products". Similarly, McCarthy (2004, p. 348) highlight that mass customization involves balancing operational drivers by defining it as "the capability to manufacture a relatively high volume of product options for a relatively large market (or collection of niche markets) that demands customization, without tradeoffs in cost, delivery and quality".
For instance, our region has ever so many clothing factories, which (HT: Emerald Insight) are subject to mass customisation approaches, once relevant barriers. . . mostly digital system and network development related . . . can be crossed:

And just as a thought sparker, let's look at mass customising tourism -- said to currently be 50% of GDP and 40% of employment in some Caribbean islands, with special reference to Montserrat: 
  • how could we use high security server side web technologies and fibre optic bit pipe technologies to market and customise tourism services such as day tours for excursionists and/or activities and events for those undertaking longer stays? 
  • Including, cycles of festivals and celebrations, a nature heritage trail, adventures [e.g. the volcano park] and a cultural heritage trail?
  • Could we create an "online virtual tour" or at least a" virtual shopping Mall" experience,  and set up options in a game-like format?
  • Could we then convert that into a package deal that can be bought on a schedule and paid for by credit or debit card, up-front?
  • Could we then organise ourselves to deliver on time, on cost? 
  • What about taking care of  visa, customs and immigration issues online, tied to this?
  • Could we set this up and support such a customised tourism product as a freebie game-style App, for the iPhone, iPad, Android Smartphone/Tablet, and Windows 8 PC markets?
  • Support and promote it in the social media space?
  • Set up an Amazon Mall? (As well, our own e-Mall?)
  • Etc.?
At any rate, this interview with a former head of the Caribbean Tourism Organisation (CTO) should give us pause:

Caribbean Journal Presents: A Conversation With Vincent Vanderpool-Wallace from Caribbean Journal on Vimeo.

Back on track . . . 

To go towards the emergent mass customisation sweet spot . . . one that clearly has potential to be one of the emerging cluster of dominant technology innovations for the next K-wave . . . our region's workforce has to be retooled towards digital productivity, which implies first a transformation of our education system with Computer Science -- as opposed to "IT" (AKA how to use MS Office products . . . ) -- at the heart of the transformation.

DV, let's go there next, as we look at the other wing of the required strategic thrust for sustainability transformation, Education [to unlock the almost infinite potential in our heads, hearts and hands . . . ], population issues and welfare:

For reference, as a footnote and bridging post. END 

PS: Cf KF pamphlet on Economics challenges facing the Caribbean here.

Sunday, April 13, 2014

A Russian fishing show on sponge -- yes sponge -- and hair baits (complete with vid shots of performance in an aquarium), also ideas on making a simple "roll yer own" rod

Sponge lures and similar items:

(After that one you may begin to pick up some Russian words! Red seems to be "krasny . . ." or something like that.)

This vid of a boat fishing session for European Bream and the like may also be interesting:

 In the second video, I am impressed by a design for a simple rod for panfishing, especially the swing-tips:

My thought is, on how something like this can be improvised, in a context where I am thinking on how people may struggle to support their families -- bearing in mind the hard times Russians have repeatedly had.

In that spirit, thoughts on swing/ quiver tips and legered feeders similar to those in the Russian video, from a French site

And, floats:

Taking this further (thinking of a longer, castable rod), we could look at the old Aetna Foulproof guide (often Monel, but Stainless will do -- or a safety pin in a real pinch . . . ) which is more or less like these from Mudhole outfitters:

Flattened "feet" are hard to make, but bend wire back in a narrow "U" and it will do. For a tip-top, bring out the two legs on the same side . . . might work for one-foot guides better than the U-bend idea. To attach, use thread to whip to the rod as is common in rod-building: under-wrap the first end to start then wrap and put a little U in as the end approaches and wrap over it at least 8 - 10 times, then pass the end through the loop and pull it out and clip close, coat with varnish. 

A quiver-tip rod extension can be spliced in at the tip, maybe with a fattish rubber sleeve to "break" when a heavy load -- a hooked fish -- is on the rod: stiff enough to hold for nibbles but straightening out after the rubber "breaks" when a fish is "on."

 BTW an advantage of the flexible foulproof is it imposes less of a dead spot on the rod blank. And no, ceramic inserts are not actually a necessity.

It would be easy to extend this to a bamboo or fibreglass or similar pole, giving a "roll yer own" rod. (A rubber hose can be force-fitted over the bottom end to make a handle, or one can do a cord wrap.) 

A simple centre-pin line holder reel can be improvised or bought, and with a turntable can be treated much like an Alvey for casting -- turn it to spin line off the side.  

For a drag, a leather tab can be used as a reel brake, easing the pressure on the proverbial burned thumb. (And yes, in my time I have had my thumb burned from braking a conventional reel in the surf. Hint: first an easy lob and reel-in to get the line wet, or even pour on a bit of fresh water . . . in the surf, salt water is not just corrosive but liable to have fine sand, an abrasive.)

Going whole-hog, you may find the idea of building something like the old calcutta bamboo-pole surf rods interesting, try here. You need the right -- stiff -- kind of canes for those old beasts, often 12+ foot long!

Guides for such a surf rod are often made from welding rods.

With care, such rods can last decades. 

Sparkers for tinkering . . . and for thinking about survival (or even camping or scouting) type situations. END

The Nelson - Velasco debate on Evolution -- a video

I have just seen notification of a posted video of the recent Nelson - Velasco debate on evolution, here:

Food for thought, and CH's write-up here may be helpful. END

KF Pamphlet on economics topics

Series: 78, 79, 80, 81, 82, b/g

I have composed a PDF pamphlet based on the series on economics, here. I trust it will prove helpful. END

PS: An experiment . . .

Thursday, April 10, 2014

Capacity focus, 82: How industrial policy -- yes, well judged and prudent state-led interventions -- can help to build effective competitiveness (despite the risks of fostering crony capitalism and/or the entrenching of corruption) . . .

Series: 78, 79, 80, 81, 82, b/g

One of the points made in support of the large sums being spent by the American Government to fund the 1960's space race to the Moon, was that the sci-tech "spin-offs" would help create such a wave of innovations that the programme would more than pay for itself.

And indeed, it patently has. 

Ranging from Tang breakfast drink to the PC or Tablet or smart phone you are probably reading this on, ever so many "high" technologies trace back to the massive injection of funding, research and inventive effort that went into the space race.

Where, of course, it is no accident that the United States is still in the lead in the high tech race, having decisively overtaken the Germans through the total mobilisation for war in the 1940's (the British having more or less bowed out of the race and having chosen instead to be a partner with the Americans . . . the new leading maritime power), and having beaten the Russians in the 1950's and 60's. Of course, a big boost came from the GI Bill that sent ever so many veterans of the Second World War to College.  

All of this heavily focussed on oil, the automotive industry, electronics, computers, telecommunications, information technologies and the internet, the industries and innovations that have dominated the last two Kondratiev waves, to date.

All of which, of course was further enhanced by the fact that the industrial base and infrastructure of the United States suffered little or no direct attack during the world war. By contrast, the British, French, Germans, Russians and Japanese were severely damaged or outright devastated, the USSR losing some 25 million people as well.

For that matter, the early industrial development of the United States and other major economies was actively aided by the state, far above and beyond the basic community-based interventions suggested by the following context for the Hayek investment triangle:

This brings us to the issue of how well-judged community and state actions -- and culture -- can demonstrably help transform the state of development of a country.

That is, industrial policy.

Wikipedia aptly summarises:
The Industrial Policy plan of a country, sometimes shortened IP, is its official strategic effort to encourage the development and growth of the manufacturing sector of the economy. The government takes measures "aimed at improving the competitiveness and capabilities of domestic firms and promoting structural transformation." A country's infrastructure (transportation, telecommunications and energy industry) is a major part of the manufacturing sector that usually has a key role in IP . . . . Historically, there is a growing consensus that most developed countries, including United Kingdom, United States, Germany and France, have intervened actively in their domestic economy through industrial policies. These early examples are followed by interventionist ISI strategies pursued in Latin American countries such as Brazil, Mexico or Argentina. More recently, the rapid growth of East Asian economies, or the newly industrialized countries (NICs), has also been associated with active industrial policies that selectively promoted manufacturing and facilitated technology transfer and industrial upgrading. The success of these state-directed industrialization strategies are often attributed to developmental states and strong bureaucracies such as the Japanese MITI. According to Princeton's Atul Kohli, the reason Japanese colonies such as South Korea developed so rapidly and successfully was down to Japan exporting to its colonies the same centralised state development that it had used to develop itself.
So, industrial policy can work, if well done.


In light of the tempting challenge of crony capitalism,  a difficult task. 

Crony capitalism?

Wikipedia is again apt:
Crony capitalism is a term describing an economy in which success in business depends on close relationships between business people and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, or other forms of state interventionism. Crony capitalism is believed to arise when business cronyism and related self-serving behavior by businesses or businesspeople spills over into politics and government, or when self-serving friendships and family ties between businessmen and the government influence the economy and society to the extent that it corrupts public-serving economic and political ideals . . . .
In its lightest form, crony capitalism consists of collusion among market players. While perhaps lightly competing against each other, they will present a unified front (sometimes called a trade association or industry trade group) to the government in requesting subsidies or aid or regulation. Newcomers to a market may find it difficult to find loans, acquire shelf space, or receive official sanction (like the Medallion System of the Taxicabs of New York City created during the Great Depression) to sell their product or services; in technological fields, they may be accused of infringing on patents that the established competitors never assert against each other. Distribution networks will refuse to aid the entrant. In spite of this, some competitors will succeed when the legal barriers are light, especially where the old guard has become inefficient and is failing to meet the needs of the market. Of course, some of these upstarts may then join with the established networks to help deter any other new competitors. Examples of this have been argued to include the keiretsu of post-war Japan, the print media in India, the chaebol of South Korea, and the powerful families who control much of the investment in Latin America.

However, crony capitalism is generally associated with more virulent government intervention. Intentionally ambiguous laws and regulations are common in such systems. Taken strictly, such laws would greatly impede practically all business; in practice, they are only erratically enforced. The specter of having such laws suddenly brought down upon a business provides incentive to stay in the good graces of political officials. Troublesome rivals who have overstepped their bounds can have the laws suddenly enforced against them, leading to fines or even jail time. Even in high-income democracies with well established legal systems and freedom of the press a larger state is associated with more political corruption (including crony capitalism).

States often said to exhibit crony capitalism include Hongkong , the People's Republic of China, India (especially up to the early 1990s when manufacturing was strictly controlled by the government, also known as "Licence Raj"), Indonesia, Argentina; Brazil, United Kingdom - especially in the 1600s and 1700s, United States, Malaysia, Israel; Russia; most ex-Eastern Bloc states, as well as the most well-known case of economic crisis due to cronyism, Greece. Wu Jinglian, one of China's leading economists and a longtime champion of its transition to free markets, says that it faces two starkly contrasting futures: a market economy under the rule of law or crony capitalism . . .
The article continues, soberingly -- we are playing with dangerous matches here and need to understand why strict safeguards are necessary:
In its worst form, crony capitalism can devolve into simple corruption, where any pretense of a free market is dispensed with. Bribes to government officials are considered de rigueur and tax evasion is common; this is seen in many parts of Africa, for instance. This is sometimes called plutocracy (rule by wealth) or kleptocracy (rule by theft).

Corrupt governments may favor one set of business owners who have close ties to the government over others. This may also be done with racial, religious, or ethnic favoritism; for instance, Alawites in Syria have a disproportionate share of power in the government and business there. (President Assad is an Alawite.) This can be explained by considering personal relationships as a social network. As government and business leaders try to accomplish various things, they naturally turn to other powerful people for support in their endeavors. These people form hubs in the network. In a developing country those hubs may be very few, thus concentrating economic and political power in a small interlocking group.
Normally, this will be untenable to maintain in business; new entrants will affect the market. However, if business and government are entwined, then the government can maintain the small-hub network.

Raymond Vernon, specialist in economics and international affairs, wrote that the Industrial Revolution began in Great Britain, because they were the first to successfully limit the power of veto groups (typically cronies of those with power in government) to block innovations. "Unlike most other national environments, the British environment of the early 19th century contained relatively few threats to those who improved and applied existing inventions, whether from business competitors, labor, or the government itself. In other European countries, by contrast, the merchant guilds ... were a pervasive source of veto for many centuries. This power was typically bestowed upon them by government". For example, a Russian inventor produced a steam engine in 1766 and disappeared without a trace. "[A] steam powered horseless carriage produced in France in 1769 was officially suppressed." James Watt began experimenting with steam in 1763, got a patent in 1769, and began commercial production in 1775.

Anthropologist David Graeber's book Debt: The First 5000 Years provides an even broader perspective: For as far back as we can see in the historical and archaeological record, argues Graeber, people with wealth and power, typically a monarch and cronies, have written the rules to benefit them at the expense of others. The situation would deteriorate for common folk until it was interrupted by a peasant revolt. Then the cycle would start over again . . .
 So, there is a fine line to be sailed between legitimate and reasonable support for industry and development and shady or outright corrupt practice that in effect sets up a state-backed business oligarchy that in turn can dominate and utterly corrupt the state. Not to mention, outright block potential breakthroughs.

For instance, the steam engine was the chief "locomotive" -- and, in essence, this is simply a coal-fired steam engine turned into an "iron horse" -- that pulled the train of the first major industrial era  Kondratiev waves of transformation and development.  Showing us the potential in breakthrough energy and transportation or networking technologies. 

(Indeed, across C19,  between the continent-spanning rail network and the telegraph network, the emergence of the United States as a continent-spanning unified industrial power was enabled . . . transforming what would be possible in the 20th Century.)

So, it is not insignificant to see how abuse of power seems to have blocked progress in Russia and France across the 1760's. (We should note, though that Watt had a predecessor in England, Newcomen . . . as early as c. 1710.)

Let's refresh our memories:

That is already a major challenge, one perhaps best faced in a community where there is a strong, vigorous independent media, and a well informed, fearless public. (Which, characteristically will not be the case in a community dominated by cronyism -- and BTW, for those inclined to suggest a radical socialist solution . . .  this boils down to creating a massive state owned monopoly on the commanding heights of the economy driven by political and bureaucratic impulses rather than economic effectiveness, a "cure" the C20 just past has shown beyond reasonable doubt is likely to be worse than the disease. Thankfully, in an era of widespread web access, social media and PCs, Tablets and smart phones, there are alternatives. But in turn, such can all too easily foster the spreading of destructive slanders, bigotry and popular but ill-founded notions. Another cluster of challenges.)

That already means that a viable industrial policy is a complex, delicate challenge.

However, that is only the first challenge. For, in an era where major anti-protectionist agreements abound, industrial policy is obviously a far more complex matter than hitherto. One that is multiplied by the current ferment in macroeconomic thinking.

Synthesist blog, which seems to be based in the Philippines, comments:
In his book, Professor Rodrik suggests ten design rules for modern industrial policy that I paraphrase below. 

One must read the chapter on Industrial Policy for the 21st Century (2004), one of nine papers in his book, to get the full flavor from the detailed discussions on these design rules.
I have my own two reservations on these rules that I discuss below the list.
  1. Incentives must be provided only to “new” activities – not to existing ones.
  2. Milestones are necessary – there should be clear benchmarks/criteria for success and failure.
  3. A clear timeline, as well – there must be a built in sunset clause for performance. Maybe, a pre-defined exit strategy for failure can help as well.
  4. Public activities must target activities not sectors – this is a radical departure from current way of giving incentives.
  5. Activities that must be subsidized must have a clear potential of providing spillover or demonstration effects. Cluster or network effects that enhance value-adding potential are a must
  6. The authority for carrying out industrial policies must be vested in agencies with demonstrated competence.
  7. The implementing agencies must be monitored closely by a principal with a clear stake in the outcomes and who has political authority at the highest level.
  8. The agencies carrying out promotions must maintain channels of communications with the private sector.
  9. Optimally, mistakes that result in “picking the losers” will occur.
  10. Promotion activities need to have the capacity to renew themselves, so that the cycle of recovery becomes an ongoing one.
Professor Rodrik is very clear that his methodology in deriving the rules above is neoclassical economic.

As I expected, that constrains him from finding the two aspects that actually drive development through the process: the entrepreneur and technology innovation.
The neoclassical and free market approach treats both as externalities and assumes that both will arise quickly given the environment.
Big assumption, especially when there is a weak entrepreneurial culture and where there is a serious capacity challenge to be overcome to achieve the required waves of key technological innovations. 

For much of that, a long term investment in a solid education system is a necessity. 

At the upper end, that should feed into a research programme that can be co-ordinated on a regional basis. Much of that can become a partnership between the universities, the region's private sector and governments, probably with significant injections from Commonwealth universities.

But also, such a programme should feed into a carefully developed enterprise incubation programme, backed by mentoring and venture capital, at all scales, including micro.

Across time, this will help develop technological strength and an entrepreneurial culture.

Again: if not now, then when? If not here, then where? If not us, then who? END

Capacity focus, 81: Technological innovation, diffusion, shocks, creative destruction, the Kondratiev - Schumpeter long wave and understanding the economic signs of our times

Series: 78, 79, 80, 81, 82, b/g

Shakespeare, putting the following words in the mouth of Brutus as he discusses an about to be missed pivotal opportunity in the civil war with Mark Anthony and Octavian [later, Augustus Caesar], put it well:

 There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.

 [Julius Caesar Act 4, scene 3, 218–224]

Just so, the pivotal question before us today is how to understand economic signs of our times, and thus how to surf the waves of innovation rather than be swamped by them and swept away by the forces of creative destruction. Where, too, as the ANC's motto counsels, we must understand the past, act in the present, build the future.

This brings the Kondratiev-Schumpeter long wave to the focus of our attention (here pictured by plotting the Standard and Poor's 500 percent shifts):

The pivotal idea here, is that for hundreds of years, a cycle of maybe 40 - 70 years (one to two generations) has decisively shaped economic and global history.  In Schumpeter's words in his classic 1939 Business Cycles, as edited and abridged by Fels:

Historically,  the  first  Kondratieff  covered  by  our  material  means
the  industrial  revolution,  including  the  protracted  process  of  its  ab-
sorption.  We  date  it  from  the  eighties  of  the  eighteenth  century  to
1842. The second stretches over what has been called the age of steam
and steel. It runs its course between 1842 and 1897. And the third, the
Kondratieff of electricity, chemistry, and motors, we date from 1898
on. These datings do not lack historical justification. Yet they are not
only tentative, but also by nature merely approximate. A considerable
zone of doubt surrounds most of them, as will be seen more clearly
later on [p.178] . . . .  From the standpoint of the transactions which carry a
fluctuation  of  short  span,  the  sweep  of  the  longer  waves  constitutes
the long-time conditions of doing business, although full equilibrium
could, even theoretically, exist only in the points in which all cycles
pass  their  normals.  This  accords  well  with  the  attitude  toward  eco-
nomic fluctuations of the business community. What the businessman
sees, feels about, and takes account of are the relatively short waves.
In our three-cycle schema they would be the Kitchins. Waves much
longer than these he does not recognize as such, but only as good or
bad  times,  new  eras,  and  so  on.  He, therefore,  acts  as  a  rule  on  the
conditions of a phase of longer cycles as if these conditions were per-
manent. This is obviously so in the case of the Kondratieff [p. 181]

 Thus, while it may be hard to assign specific dates, we can identify wavelike phenomena linked to various driving forces, and so it is highly advisable for us to pay attention and draw lessons for our own response to the signs and tides of our times here in the Caribbean and beyond.

For first instance, the historian and geopolitical thinker George Modelski has tabulated a parallel series of Kondratiev waves and long cycles associated with key technologies and the dominance of a chain of great powers:

 In the longer haul:

Fr: Robert W. Fogel, Catching Up with the Economy, March 1999, The American Economic Review

We may follow Korotayev and Tsiril (2010) and further highlight the recent waves:

 These waves were first seriously studied in our time by Russian Economist Nikolai Kondratiev, whose academic integrity led him to point out that Capitalist civilisation underwent multi-generational cyclical phases of:
 P: prosperity [upswing above the trend-line],
R:  recession [downswing from the peak],
D: depression [hitting rock bottom] and
E: improvement [turnaround towards new upswing] 

. . . which meant that the time of troubles from the end of the 1920's on was not terminal. This implication of a recovery was not welcome to Stalin, and he sent Kondratiev to the Gulag in 1930. Then, on that brutal Communist dictator's orders, Kondratiev faced a firing squad on 17 September 1938 (aged 46) at the
Kommunarka firing range, Moscow Oblast, USSR.

 A martyr to academic integrity.

Schumpeter, from the 1930's, termed these long waves associated with technological innovations and diffusion, after the martyr.

However, it is a matter of controversy as to whether the waves and associated "business cycles" are "real" and "useful."

Statistical studies of various types of economic data say, yes. For instance, Korotayev and Tsiril (2010) have used modern techniques based on the Fourier Transform for pulling frequency domain data out of time series, and have presented several convincing spectra. 

For example, we may snip:

The mere credible existence of these cycles is already significant, even before we address causes, for, if we can spot the signals, their amplitudes and phase relationships, we can at least roughly sketch in patterns and so may be able to judge tides. 

But of course, in the real world, such forecasting efforts -- just like weather prediction and its extension into projecting climate trends -- must be taken with a grain of salt, and we must not underestimate the significance of unpredicted shocks or surprise breakthrough innovations. Where, a sobering facet of this is that these K-waves are plainly strongly associated with great power rise and fall, thus with associated geopolitical, ideological and military conflicts.

When elephants get to fighting, smart worms, ants and mice get well out of the way.

Now, also, the long cycles are associated with innovation and diffusion of technologies, so it is helpful to picture that with the help of Knell and Robertson, and get a rough idea of how long the phases might take:

That S-curve is very familiar to strategic marketers, a product life cycle curve: birth, growth, maturity, decline.

And of course, this invites the expectation of the next wave as is also pictured, leading to a chain of cycles.

That opens up the question of analysis, and here we may introduce the Solow per capita production function as summarised by  Thomas McGahagan of Pitt University:
The Solow per capita production function:

q = A k 0.5
indicates that an economy can increase output per worker or q by
  1. increasing the amount of capital per worker or k. See the previous web page for a study of growth by capital accumulation.
  2. increasing multifactor productivity or A. An increase in A will come from innovation in methods of production, due to improved technology or improved organization -- including improved transportation and infrastructure under technology, and a decrease in social friction under organization.
Growth in output due to capital accumulation, as previously pointed out, will slow down and approach a steady state. [--> Thus, the S-curve tends to plateau as investment is attracted and pushes the technology towards a limit where growth tends to plateau . . . ] While this is a major source of growth -- it probably accounts for three-quarters of US growth, according to Dale Jorgenson ( Journal of Economic Perspectives , Spring 1988) -- it is not the entire story.

Increasing multifactor productivity due to innovation is necessary for continued rapid growth; that growth however will be less steady and less predictable than growth by capital accumulation. Indeed, changes in the rate of innovation may be one of the main causes of business cycles , as the economist Joseph Schumpeter (Austrian, taught at Harvard 1930-1950) maintained in his Theory of Economic Development (1912) and his Business Cycles (1939). This position has been developed in many ways by the so-called Real Business Cycle school (representative members: Finn Kydland, Carnegie-Mellon University; Edwin Prescott, University of Chicago) . . . 
In short, we here have a reasonable model and mechanism, where obviously generation-dominating technologies make very good candidates for cycles of 40 - 60 or so years. And, where also, we see the pivotal role of steady, long term investment in not just capacity but innovation and underlying research, exploration and development.

Feed such impulses into the leaky tyre model from last time:

. . . and we easily see a strong tendency of the economy to be oscillatory, at different scales. 

Thus, the different, superposed cycles:

Where does this catch us here in the Caribbean, in 2014?

For thought-provoking starters:

1 --> Here in Montserrat, we need a crucial infrastructure push to put in place effective access. That points to the current sea port project, to the development of the identified source of Geothermal Energy, and to the upgrading of our airport to at least capacity to take 40 - 50 seat regional carriers as before the volcano eruption. The restoration of fibre optic connexion would also help.

2 --> Across the region, similar investments can easily be identified.

3 --> But we still have not hit the focal spot, we need to lift our attention to innovations based on generation-dominating technologies.

4 --> For instance, we have largely participated in the digital technology revolution as consumers, not so much as producers. Starting with educational transformation to build computer programming and science into core primary and secondary education, that has to change.

5 --> We need to go high tech with agriculture and target profitable niches. That suggests drip irrigation and mulching, hydroponics, fish farming, and other innovations.

6 --> Since bio-technologies and nanotechnologies are evidently a coming wave, we need to strengthen our education base to catch that wave as it comes in. Now, not "too little, too late" as usual.

7 --> Water is a pivotal issue, and we need to look to water resources management.

8 --> We need to think and begin to act towards energy transformation. And in so doing we should at least bear in mind possibilities such as pebble bed modular reactors, molten salt thorium reactors, Bussard electrostatic potential well fusion, and broader fusion. 

9 --> Where for transportation, hydrogen and fuel cells look to be serious candidates.

10 --> And more, just add to the list (and place on a timeline compared to the S-curve chart) . . . 

11 --> Which then brings up the Hayek investment triangle and the issue of what sort of future are we already investing in now, based on business as usual:

12 --> Thence, where is that likely to end up given trends, and what credible alternatives can we put in place to head to a better outcome?  As in:


The thing is, we need to look at the innovation S-curve wave, with its credible timing, and then begin to play three to five moves ahead of events on the ground.

Which -- in a region prone to lurch, caught off guard, from reacting to one crisis to another --  is maybe the biggest challenge of all.

So, we are back to the Mordecai challenge: If not now, when? If not here, where, if not us, who? END