Still, there is a powerful case to be made that the burst of new technologies developed in the past few years change the nature and potential of the world economy and create the possibility of a long boom through the early years of the next century.
If that is right, the underlying growth of the world economy could pull countries (and companies) through the down-swings of a trade cycle without economies going actually into recession. But is it right?
The most thoroughly developed version of this thesis comes from a booklet by the OECD. It is called The Future of the World Economy - Towards a Long Boom? It pulls together papers and a discussion the OECD organised as part of its long-range thinking. Long booms are rare. Apart from the one at the back end of the last century there was another one after the Second World War. Both were periods of a faster-than-average growth and interaction between rapid socio-economic change and rapid growth in productivity. Arguably we are again in one of those periods.
It is hard to judge what bits of a revolution are important when you are in the middle of one or maybe the early stages. Nevertheless you can pick out points: the OECD identifies five.
The first and most obvious is technology. Most of us are aware we are in a similar period to the turn of the last century, when the development of the car, the aeroplane, electricity, the telephone and so on were all racing forward in much the same way communications technologies move now.
Number two is institutional change. Governments are changing radically, privatising, devolving power and reforming regulations, and companies are reorganising themselves to try to capture the human capital of their employees.
Number three, the OECD calls "inputs" - the idea that the necessary inputs for growth, including physical resources and finance, are all available. Perhaps the greatest change here is the ready availability of capital, which will now flow anywhere in the world in search of the best returns. Four is competition, which is helped not only by globalism and deregulation, but by the new technologies: electronic commerce is a good example of the way a new technology can transform competition by introducing areas such as price comparison across national and local boundaries.
Finally, the OECD notes the change in "aspirations" - the extent to which people have been freed of the grinding day-to-day concerns about feeding, clothing and housing, leaving time to consider the wider aims of leading more fulfilled lives.
It is not difficult to see how these forces interact. Information is the key to improved performance. The more information people have about comparative performance on health care the greater the pressure there will be on countries which fall behind to lift the quality of their provision. The more information a health care provider has about treatments and patients, the more effectively it can manage its provision.
That is the essence of the OECD thesis. What does this mean for countries and companies? If you accept the parallel between the present and the turn of the last century, how do countries position themselves to take best advantage of the opportunities and how do companies become the Fords of tomorrow, instead of the Trojans?
The country question is easier to answer because generalisations are more applicable: all countries are similar in their administrative structure, or at least they are by comparison with companies. So you can say countries that can foster creativity and change will do better than those which stifle them. How you do that is open to debate but it is at least clear what countries should not do - what policies they should adopt if they want to maintain the rigidities of their society. Look at Japan and a lesser extent Germany.
But while governments can certainly hold back societies by preventing change, I'm not so sure they can push them forward by encouraging it. One of the intriguing aspects of the Internet is the way its penetration in different countries seems to be determined by culture rather than policy. A new paper by David Owen, the economist at Dresdner Kleinwort Benson, on the Net shows the extent to which the US leads Europe in Internet penetration, but also how within the EU, the euro "outs" lead the eurozone countries.
This must be cultural. People in Germany, France, Italy and Spain are perfectly rich enough to have widespread Internet access if they wanted to. But they clearly don't. They lag behind the UK and, especially, Scandinavia. If the US is nearly two years ahead of the UK in Internet penetration, France and Germany are two years behind the UK. That leads to an interesting side issue: will the price crunch created by the Net have more impact on the "outs" than the "ins"? Or, put another way, could the price comparison impact of the Net do for prices in Britain and Sweden what the price comparison impact of the euro will do for prices in the eurozone?
From any company's point of view the fact that the next five or 10 years will see a price crunch seems to me to be the one, single, applicable- to-all conclusion that can be drawn. I find it extremely plausible that we are in the early stages of a long boom analogous to that of a century ago, but it will be a boom characterised by relentless downward pressure on prices. It will be a world where there is lots of demand but very thin margins - actually rather like both the 1890s and the 1950s.
Translating that into a business strategy is tough, but - if it is right - at least there is the prospect of low input prices and reasonable growth in demand for output, which companies could not assume in the 1970s or the 1980s. Many British companies thought there was going to be a recession early this year, but there was only the briefest of pauses in the path of growth.
If there is a single element of strategy that applies to the infinite variety of different businesses the obvious one must be this. Grab the new technologies and apply them to every aspect of the business as fast as possible, accepting that there will be a lot of mistakes. It is interesting now to see how companies which have a coherent Internet strategy are rewarded by the market, while those which have failed to get things together are under threat.
But maybe there is another less obvious rule. When a set of new technologies burst forth, no-one knows how they will be used commercially: which applications will be commercial successes (like the mass-market car) and which will be commercial failures (like the airship). Lots of things are technically possible. What determines success is figuring out what people actually want. Remember the wrist-watch TV? It is perfectly possible to make one and few exist Trouble is, no one wants to wander about watching television on their wrist. And so it will be with the communications revolution. A new business mantra? Ask not what technology can do for you; ask what your customers want it to do for them. Then enjoy the long boom.Reuse content