Innovation & Hegemonic Cycle

We analyze the reallocation of disposable income through the 'Innovation Cycle'. The Innovation Cycle describes a continuous shift from the installation-phase (roll-out of infrastructure) to the deployment-phase (use of applications) of a certain technology. 

The TMT industry is currently at a turning-point between the installation and the deployment phase. The technologies in this industry are only at the beginning of their true application potential and are thereby disrupting the status quo. Such transitions happen through (financial) bubbles and (social) shocks. An example of this is how digital networks and applications have empowered the masses and are changing the traditional one-dimensional one-way relationship between consumers and producers into a more interactive relationship.

Aside from technological revolutions, macro-economic and geo-political events also have an impact. The reallocation of disposable income not only occurs within societies, but also between them. We call this the reallocation of global wealth and it is described by the ‘Hegemonic Cycle’. It reflects long-term shifts in economic and political power between countries which typically coincide with countries moving from one phase of development to the next. Countries follow dynamic and non-linear development paths, which gives rise to sudden transformations and re-rating potential.