Perezian’ Theory of Techno-Economic Paradigms as the Analytical Framework

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Benedikt Seidel:

"Carlota Perez’ theory of techno economic paradigm shifts (TEPS) ... (is) ... introduced as the analytical framework of the thesis. This perspective is used to present “Commons Based Peer Production” (CBPP) as a potential mode of production to realize the synergy phase of the ICT-Paradigm within the perezian framework."


Benedikt Seidel:

"Following up on the evolutionary economists Kondratieff, Schumpeter and Perez, the theoretical premise of this paper is that economical and technological developments are in an interdependent and cyclical relation to each other, which Perez (2002, 2010) frames as TEPS. This theory aims at analyzing the direction and the potential of change. It is developed upon an understanding of the repeating crises of industrial capitalism, which Schumpeter (1943/2003, p. 83) identified as inherent creative destruction. According to Perez, there is a technological revolution at each starting point of a techno-economic paradigm shift. A technological revolution is a diffusion of a cluster of innovative technologies, products and industries. It affects the whole economy and therewith to a large extent of human life as well. There have been five technological revolutions during the last 200 years. The last one had been initiated by the invention of the microprocessor in 1971 and is called “the Age of Information and Telecommunication”. According to TEPS each technological revolution undergoes certain phases as it becomes more mature and the market is increasingly saturated. In the midst of this, the theory depicts a turning point at which the rate of change of market saturation over time becomes negative and manifests with an economic crisis. (see Perez 2002) The turning point of the Age of Information and Telecommunication was marked by the so called double bubble. First, there was the burst of the, which peaked in the crash of the Nasdaq in the year 2000 and was based on technological innovation. This was followed by the second part of the double bubble, the global financial crisis in 2008, which centered around financial innovation. This turning point is when the techno-economic paradigm (TEP) switches from an installation period, which is motivated by testing the new technologies and short term profits of financial capital, to a deployment period, in which the new conditions the diffusion of new technologies and must be lead by long term interest of production capital. Only if the situation is governed appropriately, a golden age can manifest, in which the potential of the new conditions is utilized, otherwise a gilded age does, that falls short of the potential. Directing this transition into a golden age is the task of the state. (Perez 2009) After analyzing the current situation, the following section will elaborate on a mode of production that could foster a golden age of the ICT-Paradigm.

3.2. Commons-based peer production and the Information and Communication Technologies Paradigm

In the previous chapter the current situation has been analyzed as being at a turning point of the ICT-paradigm. According to the TEPS framework it is now the task to reach a synergy phase of the paradigm, which realizes a golden age by utilizing its potential. “A techno-economic paradigm is, then, a best-practice model made up of a set of all-pervasive generic technological and organizational principles, which represent the most effective way of applying a particular technological revolution and of using it for modernizing and rejuvenating the whole of the economy. When generally adopted, these principles become the common-sense basis for organizing any activity and for structuring any institution.” (Perez 2002, 15) .

Perez further states: “The ... principles … are not strictly limited to the organization of production but stretch to involve the structure of the firms, the forms of geographic propagation, the structure of the geo-political and social space and something which approaches the ‘ideals’ of the period. In fact, the logic of a paradigm reaches well beyond the economic sphere to become the general and shared organizational common sense of the period. It could then be called an organizational paradigm. Eventually the socio-institutional framework that will accommodate and enable the full deployment of that technological revolution will follow those basic principles. Thus the mental maps for efficiency guiding both economic and non-economic activities will be congruent.” (Perez 2002, 17).

Kostakis (2013) argues that this new organisational common sense is a mode of production which is called commons-based peer production (CBPP). CBPP was first defined by Benkler (2006) to describe how internet-based productive communities use shared resources according to their own rules. Two lighthouses of CBPP are Wikipedia and Linux. Both of them are governed and produced by a community of peers, without or at the most a low level of hierarchy (peer production) and they are not capital-oriented but commons-oriented (see Kostakis and Bauwens 2014). In accordance with Benkler (2006) and Kostakis (2013) CBPP is assumed to be a well fitting social institution for economic activity in the ICT-Paradigm. The reason for that has to do with the characteristics of the ICT-Paradigm and information in specific. As will be argued in the following chapter, information production has low marginal and can have low transaction cost. CBPP utilizes these characteristics, because it premises on modularity (see Kostakis 2019). Therefore, the resource intensity, i.e. the threshold, to participate in value creation of CBPP lower than in casual modes of production. For example, contributing to Wikipedia only requires access to the internet, can range from small to big contributions and is evaluated by a decentralized system. So the strength of CBPP originates from enabling a large number of distributed actors to contribute. This is why Wikipedia outperformed Britannica, which has had a more centralised and capital-oriented system of information production. Applying CBPP in different realms of value creation promises to increase the number and balance the individual share of contributors on value creation, which also could have an impact on democratization of an economy. All together, chapter 3.2. has given reason to foster CBPP when making policy in the ICT-Paradigm, especially when attempting to realize the synergy phase, i.e. golden age, of the ICT-Paradigm. Following up, the author will take a closer look into what lies at the core of the potential of CBPP."


See: Fab City Hamburg and its Mission-Oriented Coalition for Digital Transformation

  • Master's Thesis: HOW TO HARNESS THE DIGITAL TRANSFORMATION THROUGH A MISSION-ORIENTED COALITION? FIRST INSIGHTS FROM THE CASE OF FAB CITY HAMBURG. By Benedikt Seidel. TALLINN UNIVERSITY OF TECHNOLOGY, School of Business and Governance, Ragnar Nurkse Department of Innovation and Governance, Technology Governance and Digital Transformation, January 2020