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Jānis Krūmiņš*

11 th International Scientific Conference ECONOMIC SCIENCE FOR RURAL DEVELOPMENT 2010. Jānis Krūmiņš*. Innovation coordination - its inferred implication on technology diffusion and business cycles.

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Jānis Krūmiņš*

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  1. 11th International Scientific Conference ECONOMIC SCIENCE FOR RURAL DEVELOPMENT 2010 Jānis Krūmiņš* Innovation coordination - its inferred implication on technology diffusion and business cycles  University of Latvia, Faculty of Economics and Business Management.blv. Aspazijas 5, Riga, LV-1050, E-mail: JanisKrumins@netscape.net April 22 - 23, 2010, Jelgava, Latvia

  2. Presentation outline Recession – a contraction of economy over at least 2 quarters in row • Cycles, recession – relatively well – known phenomena • Effects from an acceleration of the recovery • The role of innovations and why innovations linger • Mobile web – sophisticated contemporary technologies • Management options • Towards the more conventional areas of economy Extreme case ICT ~ 5 – 15% from GDP (industrially developed countries) The methodology of forecast based coordination of innovations

  3. Cycles • Short andmediumcycles: • Joseph Kitchin (3 – 5 years), • Clement Juglar (7 – 11 years), • Simon Kuznets (15 – 25 years). • Long waves (45 – 60 years): • Jacob van Gelderen un Samuel de Wolff (1913), • Nikolai Kondratiev (1925), • Joseph Šchumpeter (Business cycles, 1939), followers. • Industrial revolution – 1771, • Steam engine and the railroad – 1829, • Electricity, steel, heavy industries – 1875, • Oil, automobile, mass production – 1908, • Information, telecommunications – 1971. • Very existence and duration of the cycles are under question. • For our purposes the duration and irregularities of the cycle are unimportant! • Every next cycle exceeds the previous one (the economy is evolving). • The recession is deep (3x). • Every cycle is dominated by different technologies and areas of economy – the next one will be the mobile technologies’ cycle. • Every next cycle is dominated by innovations emerged during the recession phase of the previous cycle (clusters of innovations) – unexplained phenomenon.

  4. Recession triggers and recovery leading innovations y = Y / Ymax at t1 a V = y tr1 / y1 > 1 at t2 a c = y 2 / yi2 > 1 • avalanche a V and acceleration a C coefficients – determined by wide set of different economical, social and psychological factors, only the simplest models (additive, multiplicative) applicable, components of the model include: • The structure of the triggering field of economy, • Structure of the affected sectors.

  5. The effect of acceleration of innovations

  6. Triggers In principle, every sector of the economy can cause recession, however, substantial weight in GDP is required Causes: • hypertrophied, exaggerated previous expansion, “bubbles”, • protractedly underpinned demand, • gamble, conspiracy – dot.com crush in the late 1990 - ties. Signs – usually can only be noticed retrospectively: • falling prices, • mergers, • spending reduction measures, mass layoffs, • discount, leasing, easy credits.

  7. Innovations • the importance of innovations is well comprehended – policies and measures aimed at fostering of innovations, • innovation clusters in the recession phase of the long wave – still unexplained, • why innovations linger – possible explanation provided. ========================================================== • simple innovations, • innovations in the “high tech” areas – sophisticated, multilayered plexus of “enabling” and “resulting” technologies, • mobile web applications – an extreme case.

  8. Need of coordination in the area of the mobile web Have to appear simultaneously: • mobile devices, • mobile web applications, • ready users. Problems: • obsolete applications, • users aren’t ready.

  9. Methods of coordination of innovations • Methodology of forecast based coordination of innovations: • the model, • forecasting the duration of the project phases, • selection and forecasting of essential characteristics, • choice of the best project alternatives, • managerial measures, • adaptation towards more conventional industries. • direct control, • standardization, • cooperation, • forecasting. • Mobile web applications: • depend on features and characteristics of mobile infrastructure, • subordinated, • many independent developers, • fast development, • fierce competition  secrecy  lack of cooperation.

  10. Innovation coordination model for Mobile Web applications Developers Developers Mobile applications Browsers Users Content providers Alternatives of the Mobile Web application projects Web servers OS Developers Mobile operators Network devices, protocols Mobile devices Developers • Innovations: gradual / revolutionary / yes – no for already known features / convergence • Multilevel, multivariant determinant: network / device / OS / browser • Residual principle • Applications: for general public / narrow circle of users

  11. Some direct implications from the innovation coordination methodology usage Several development and introduction phases may be executed simultaneously Cellular network infrastructure development Cellular network infrastructure development Mobile OS development Mobile OS development Mobile browser development Mobile browser development Application development Application development Mobile device development Mobile device development Introduction of the application Introduction of the application “Habituation”of the users “Habituation”of the users

  12. Achievable gains Due to the existing until recently versioning practice (a new version of software each year) any improvement in hardware or underlaying software will appear on the next stage only after a year In the case of Mobile Web applications it takes: • Mobile OS development: 1 year • Mobile browser development: 1 year • Mobile application development: 0,5 – 1,5 years • “Habituation” of the users: 0,5 – 1,5 years Total: 3 – 5 years

  13. Diffusion of technologies (US households data) percent ownership years since product invented Source: Federal Reserve Bank of Dallas. 1996 Annual report. The economy at light speed. Technology and growth in the Information age – and beyond. http://dallasfed.org/fed/annual/1999p/ar96.pdf Electricity 1873 46 Television 1926 26 Telephone 1876 35 VCR 1952 34 Automobile 1886 55 Microwave oven 1953 30 Airplane 1903 64 PC 1975 16 Radio 1906 22 Cellular phone 1983 13 Internet (WWW) 1991 7

  14. Towards other, more conventional industries

  15. Thank you!

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