Carlota Perez knows a thing or two about bubbles. in fact, the Venezuelan scholar has studied all five technological revolutions over the past two centuries, and she's found a series of similarities among them. According to her, we've still got a ways to go until the information revolution runs its course.

Perez is a research fellow at the University of Sussex and the University of Cam-bridge, and her book, Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages (Edward Elgar, 2002), is widely studied by the academic and business communities.

PEREZ: Before our current information and telecommunications technology revolution that has made us all wonder how anybody survived without mobile phones and e-mail, we had the mass-production revolution, which created the "American Way of Life." It was based on the suburban home full of electrical appliances for domestic work and home entertainment, and of course there was a car so that you could drive to the nearby supermarket to stock the fridge and the freezer. It was the age of the automobile, cheap oil and synthetic materials, with universal electricity, telephones, airways and a highway network. That one was preceded, in the 1870s, by the age of steel and heavy engineering (including civil, naval, electrical and chemical). It set up powerful cross-continental systems of railways, steamships and world telegraph. It was the first global revolution, and we can draw many parallels between it and our own times.

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The second revolution, which took place in the 1830s, was the age of steam and iron railways. And the first was the original Industrial Revolution, which introduced machines moved by water power and the construction of a canal network to move supplies and products from river to river and to the sea for export.

Each of these revolutions had a new central transport network for goods, people, energy and/or information, and each was made possible by the creativity of a different group of engineers: from the mechanical engineers who, in a sense, created our earlier revolutions, through to chemical and electrical engineers, and now the to microelectronics and information-technology innovators of our present day. But perhaps the most useful feature, in terms of being able to use the past to say something about possible futures, is the regularity in the sequence of periods of each of these great surges of development.

What are the phases of these technological surges?

Basically there are two main periods-installation and deployment-of about two or three decades, each with a financial crash in the middle. The NASDAQ collapse divided the current surge in two halves, just as the crash of 1929 cut the mass-production surge, and the "canal panic" and the "railway panic" (both in England) did during the other surges.

The installation period begins with what I call a Big Bang-a new universe of opportunities. In our case that would have been Intel's microprocessor in 1971 and, in the previous period, it was the Model T Ford. The early decades of installation are the "irruption phase" with all the new technologies happening in an old and declining economy. The later decades are the frenzy phase, when the new paradigm rejuvenates all the existing industries and flourishes fully. The problem is that the euphoria tends to create a financial bubble that inevitably ends in a collapse.

The deployment period is the Golden Age. That is when all the wealth creating potential of each revolution can really spread across the economy and benefit a wider cross-section of society. The deployment period ends when the new technologies and their applications reach maturity, innovation opportunities are exhausted, and productivity increases dwindle. That creates the conditions for the next revolution.

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