Social Schumpeter: Innovation and the New Social Economy

Euclid September 18th 2009

Robin Murray

The present crisis is about a long wave transition from the 20th century paradigm of mass production, to what? to the 21st century paradigm of the distributed system economy?

The sequence of propagation has four phases and a break

FinancialBubble

Technologicalexplosion

Market saturation and social unrest

Golden Age

Nextbig-bang

big-bang

Deg

ree

of d

iffus

ion

of th

e te

chno

logi

cal r

evol

ution

Time

INSTALLATION PERIOD DEPLOYMENT PERIOD20 – 30 years 20 – 30 years

MATURITY

SYNERGY

FRENZY

IRRUPTION

TU

RNIN

G P

OIN

T

Crash Institutionalrecomposition

The historical record: bubble prosperities, recessions & golden ages

1771Britain

1829Britain

1875 Britain / USA

Germany

1908 USA

1971 USA

1890–95

Europe1929–33

USA1929–43

1848–50

2000/7–?

1793–97

TURNINGPOINTINSTALLATION PERIOD DEPLOYMENT PERIOD

Telecom mania, Internet emerging markets

and NASDAQ

London funded global marketinfrastructure build-up

(Argentina, Australia, USA)

Railway mania

Canal mania

The roaring twenties

Bubble

Sustainable global knowledge-society ”golden age”?

Post-warGolden age

Belle Époque (Europe)“Progressive Era” (USA)

The Victorian Boom

GreatBritish leap

Golden Age

Each Golden Age has been facilitatedby enabling regulation and policies for shaping and widening markets

Digital economy reconfiguring production around the user. The Lego principle. Households become designers, processors and assemblers. The house becomes an office/recording studio/learning lab/doctors’ surgery/power station. Rise of distributed systems and the support economy

Strong social and technological tides which provide the basis for the expansion of the social economy

The social economy

i) Intractable Problems. Widespread recognition that the big issues not solvable with business as usual.

But the social economy is particularly well suited to tackle these issues and is the source of many innovations in these areas.

ii) Insistent voices, active lives.

The rise of expressive culture - the post modern citizen actively searching for identity, meaning and self improvement , individually and collectively through social movements

New models of social provision:

Open UniversityOpen CollegeElderpowerThe KeyChronic health care

Social economy can become an innovative driver of economic transformation in the deployment period

Can do so only if conditions transformed in each part of the social economy and their inter-relations

a) State. Major structural reform - Innovation episodic and centralised.

b) Interfaces: innovation contracting independent project boards invest to save budgeting SFI not PFI

c) Design. New barefoot designers.

d) Formation: theory and methods

e) Wiring the micro. Mondragon/Third Italy/Japanese consumer co-ops

f) Conditions for household engagement and collaboration

• Working time• Lifeskills• Platforms and support services• Physical; space• Digital spine• Tax, benefits and volunteerism• Distributed public facilities (local nodes)

Platforms – from the linear to the multi-nodal

Social Schumpeter

Innovation in the social economy now becoming central to the future of capitalism

References:

Christopher Freeman & Francisco Luca, As Time Goes By, Oxford 2001Francois Jegou and Ezio Manzini, Collaborative Services: social innovation and design for sustainability, Poli Design 2008Richard Koo, The Holy Grail of Macroeconomics, Wiley, 2009Richard Lipsey, Kenneth Carlaw & Clifford Bekar, Economic Transformations, Oxford 2005Jim Maxmin and Soshana Zuboff, The Support Economy, Allen Lane 2002Carlota Perez, Technological Revolutions and Financial Capital, Edward Elgar 2002Walter Stahel, The Performance Economy, Palgrave 2006

Robin Murrayrobinmurray(AT)blueyonder.co.uk