Introduction

The development of capitalist world economy has exhibited discontinuous or wave-like patterns of rapid expansion (upswings), which in turn are followed by periods of relative stagnation or ‘crisis’ (downturns) and vice versa, in successive phases. This cyclical rhythm is captured in the theory of long cycles or waves of 40-60 years, first articulated by Nikolai Kondratiev. Kondratiev's theory on cyclical rhythms in capitalist development argues that these patterns are constitutive of the logic of the world economy, and that they are a response to the contradictions inherent in the endless pursuit of capital accumulation. This is most evident during periods of stagnation or downturn when the world economy faces ‘crises’ in accumulation. It is these periods of tension that gives capitalism its dynamic, or what Schumpeter has described so lucidly as the paradox of ‘creative destruction’.

Shifts in the techno-economic paradigms are a key feature of the long waves of the capitalist world economy in that they indicate the arrival of an innovationrich phase that gives rise not only to new leading sectors (e.g., product and process innovations), but also to new organizational and managerial innovations that ultimately have a pervasive effect on how business is conducted throughout the world economy (Freeman and Perez 1988; Perez 2002, 2004). The arrival of new techno-economic paradigms is not just economic and business phenomena, as it triggers transformations in socio-institutional and political structures both at the national, regional and global level.