THE THRESHOLD OF HISTORY

In 2026 America will celebrate the 250th anniversary of its founding. Within this benchmark are the seeds of our “new story”; one that evolves directly from our history of building a nation from a wilderness; where a culture of opportunity became central to energizing the waves of innovation that grew the country; and our moment at the threshold of the next great wave of innovation that can support personal health, community health, planetary health, and new economic development. A reflection on the five great waves of innovation that grew the country underscores this creative phenomenon:

  • Wave I: Mechanization (1760–1830): Imagine it’s 1750 and you’re a visionary announcing with confidence that in just 30 to 40 years, one person will manage to weave as much as 100 to 200 skilled laborers do in one day. “And this will change the economy forever” you say. After half a second of thought, they say, “you’re crazy”, what a ridiculous prediction. Before coal mines, machines such as spinning jennies, steam engines, and other mechanical wonders reshaped the country, society was agrarian. Value was created from land or from trade of agricultural products. But with these novel technological possibilities, economic and social change followed. The point is: after a period of exponential growth, the impacts of innovations reach everywhere in society. That’s why such waves are often called paradigm shifts.
  • Wave II: Steel, Steam, and Railways (1830–1900): Now imagine that you are living in 1830 and you have a vision of the future: You see a world with railways and trains with tons of cargo speeding through tunnels and forests, over steel bridges, and into great halls in cities. This vision feels important, and you want to share it, to paint a picture in people’s minds of an exciting, new future of mobility. You declare that, in 30 to 40 years, one person will be able to drive 200 or even 300 horse carriages worth of cargo in one day — without a horse! Again, they would think you were crazy. Without converting iron to steel, rapid railways are impossible. Iron tracks are too soft for heavier and longer trains. The innovation of steel production made not just railways possible but also a whole new manner of construction, cheap enough for high-rise buildings and large ships. This not only changed trade but changed cities, coasts, settlements, and agricultural production. The transformation led to new opportunities for people, companies, and cities to rise. 
  • Wave III: Industry (1900–1970): Now Imagine you’re in 1908. You ride your horse down to see the horse-carriage manufacturers, the saddle makers and blacksmiths. You think, “Horses will always be the way we get around, safest business in the world. I’ve seen the future: It will bring us better horses that run ever faster!”  The problem was not that electric, or petroleum automobiles didn’t exist at the time. They weren’t unheard of or unimaginable. The problem was that a technology — totally unrelated to horses — called the assembly line was coming into existence. And a fellow named Henry Ford had some radical ideas that involved business-model innovations that included living wages and car loans. With those, he could accelerate the rollout of cars to people who didn’t have the means to finance their shiny new purchase upfront. Economies of scale made car prices fall and fall. Then cars sold by the millions.  The then-new mass-production techniques — along with electricity to power pumps, lighting, cooling, and heating — made incredible volumes of consumer goods available at ever-lower costs because resources were abundant and cheap. The combination of cars, trucks, highways, petroleum chemistry and a flood of new products kicked off modern life as we know it. Economic growth surged, through the roaring 20s and then again after WWII. This wave of innovations spilled over into all corners of society, changing nearly every sector. 
  • Wave IV: Electronics, Television, and Aviation (1945–1990): Few inventions have birthed as many innovations as the transistor, a semiconductor at the basis of all electronics. From its modest beginnings in vacuum tubes, it has not just made radios better but has made telephone switchboards and televisions possible, growing television companies, telecommunications networks, and news-broadcasting networks. The transistor also made computers possible. By the 1980s, IBM had catapulted to the top of the world’s most valuable companies. Mass aviation also became possible as companies sprung up, airports mushroomed, and global trade took off.
  • Wave V: The Digital and Internet Wave (1985–Present): Given the many ways our lives are defined by the internet today, it’s difficult to believe that the World Wide Web only got going during the late 1990s. Once again, we can’t really say we saw it coming. In 1996, many CEOs were still declaring that the internet was a fad. Why would anyone want to purchase their loans, their newspapers, or plane tickets through such a wobbly, cumbersome channel? Back then, for most users going online involved a dial-up connection with slow analog signals over copper wires. There were already hundreds of television and radio channels, and you could reach anyone by landline phone, fax, or post. What would you need an internet for? Like the other waves, it started in just a few fringe arenas in physics and defense labs off the radar of the public. The internet erupted commercially during the late ’90s, then crashed in 2001, then revitalized has spread to all parts of society. Today nearly half of the world’s population has a mobile phone or tablet connected to the internet, something no one had only 15 years ago. The fifth wave has again changed the structure and value creation of the overall economy.  Today, the five largest companies by market capitalization are: Apple, Google, Microsoft, Amazon, and Facebook. 
  • Wave VI: The Green Wave (2015–2060):  For 200 years, innovators found ingenious ways to improve labor productivity. This was mainly accomplished by having machines make people (labor) much more effective per hour. Now we have a world with almost eight billion people. But it is a world now constrained by what scientists call sources and sinks, raw materials and air, water, land, and vegetation that can absorb carbon emissions and other pollution. It makes economic sense now to innovate for optimizing resource productivity. The evolution in lighting is a case in point. The LED bulb gives off the same amount of light as an incandescent bulb but requires just one-tenth of the coal burned in a typical coal-fired power plant. If we power a smart LED with a motion sensor on wind and solar power rather than power from a coal-fired plant, we can get the lighting we want with at least 99 percent less resource use than the old system. From 2010 to 2018, average solar panel power costs per kilowatt-hour fell nearly 80 percent. An article recently identified 21 major consumer innovations; seven are in mobility: e-bikes, bike sharing, taxi-buses, ridesharing, car sharing, mobility as a service, and better telepresence; seven are in the power domain: photovoltaics like solar rooftop with storage, peer-to-peer electricity (selling to your neighbor), vehicle to grid (selling from the car battery back to the grid when demand is high), time-of-use pricing, managing demand and more energy service companies optimizing home consumption in exchange for a fixed fee. Seven more are in smarter consumption: peer-to-peer goods (sharing tools, sports gear, etc.) home sharing, smarter appliances, prefabricated retrofits with click-on insulation plates, smarter homes, and heat pumps. That wave of innovations is accelerating, enabling a Low Energy Demand (LED) future with better lives. Other resource innovations are happening in buildings, foods, transportation, and industry. All are converging into the next wave of innovation, and more is on its way.  

With credit to researcher Carlota Perez and the author of Tomorrow’s Economy, Per Espen Stoknes