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      Currently we find ourselves at the end of the stall zone and are entering rapid expansion. But this situation of being between stages is also why we have such confusion in today's markets between the optimistic technophiles and the pessimistic economists. Both groups are right if their aperture is focused on the past 20 years (which, for most observers, is often simply based on their own personal experiences). However, in expanding the view over a broader arc of economic history it becomes very clear as to where we are, where we have been, and (most importantly) where we are headed.

      To reinforce this point, let's take a closer look at recent history and how these periods fit within Professor Perez's model.

      The Burst of Innovation (1980–2000)

      The advent of the PC, Steve Jobs's original Mac, Bill Gates becoming the world's richest person, the Internet explosion, the wiring of our corporations. It was all so very heady. It was “the time of the great happiness” as remembered in the technology industry, at least until it all ended in tears with the dot-com bubble and bust.

      Similar bursts of innovation have occurred at the beginning of each industrial revolution, paving the way for the great fortunes of titans such as Cornelius Vanderbilt, Andrew Carnegie, and John D. Rockefeller. But this wealth was highly concentrated, because the new technologies and their associated business models were understood and implemented by only a few. The public at large would marvel at the new machine of its age; it would garner lots of press and capture the collective imagination, yet its reach was still limited and highly concentrated in a few industries and geographies. Invariably, when too much capital would start chasing too few implementers, financial bubbles would result.