LONG WAVE CYCLEThe Dot.Com Bubble Burst

THE KONDRATIEV CYCLE

KONDRATIEV LONG WAVE CYCLE

Kondratiev Long term cyclical changes Time span: 50 years 4 Phases

Recovery Prosperity

Recession

Depression

THE 4 PHASES

Recovery: Discoveries are developed in to new innovations

that create entirely new opportunities Uncertainty variety of competing product

configurations

Prosperity Innovations diffuse Band-wagon effect Over ambitious and unrealistic plans

THE 4 PHASES

Recession Limits of technological advance become evident

price competition becomes intense New technology spills into process applications Transformative capacity of technology

Depression Declining profitability Mergers and acquisitions Discoveries, breakthroughs and inventions

THE 5 CYCLES

THE FIRST.DOT COM BUBBLE

THE ‘DOT COM’ BUBBLE (YEARS 1995 – 2001) Internet-based companies growth (dot coms) Investors rushed in to be a part of this new

revolution Wealth for investors (Year 2000) bubble crashes, wealth disappears

‘DOT COM’ COMPANIES SIGNIFICANT TO THE BUBBLE

WHERE DOES THE 'DOT COM' BUBBLE FIT WITHIN THE LONG WAVE CYCLE? 

Today, we are considered to be well into the fifth cycle

First cycle 1780-1830

Second cycle 1830-1880

Third cycle 1880-1930

Fourth cycle 1930-1980

Fifth cycle 1980-2030

Recovery Prosperity Recession Depression

TO WHAT EXTENT DO YOU CONSIDER IT (BUBBLE CRASH) TO HAVE BEEN PREDICTABLE? 

Significant warning signs : Low interest rates 1998-1999 Skyrocketing salaries Internet companies business strategies

-’Get large or get lost’ Band Wagon effect Programmer becomes overnight millionaire

THE SECOND DOT.COM BUBBLE

TWO HUMP-CURVE When will the cycle end? Unlike the traditional one hump curve, we have a

two-hump curve.

Time

Economic activity

TWO HUMP-CURVE TWO HUMP-CURVE First hump: from 1995 to 2001 Hasn’t evolve into the depression after 2001 Second hump: from around 2006 to maybe

2010 A new bubble is gradually formed

WEB 2.0 BUBBLE

The second hump represents of the bubble of web 2.0 technology

Web 2.0 is a term describing a trend is the use of World Wide Web technology that aims to enhance creativity, information sharing, and collaboration among users.(Wikipedia)

WEB 2.0 BUBBLE

Representatives: Facebook, Myspace, Hi-5, and Friendster

Facebook brings Web 2.0 into mainstream New technologies such as RSS, AJAX

(Asynchronous JavaScript and XML) is used in Facebook

WHY WEB 2.0 IS ANOTHER BUBBLE?

1. there is too much money pumped into Web 2.0 companies

2. there are virtually no barriers to entry in Web 2.0

3. there is very little liquidity in the market for Web 2.0 companies (The Wall Street Journal)

OTHER TYPES OF TECHNOLOGY

OTHER TYPES OF EVOLVING TECHNOLOGY Broadband internet services

56K,ADSL, Cable, Broadbrand, Wi-Fi

Social Networking sites Email, Forum, MSN, Blogger, Skype You Tube,

Friendster,Facebook

OTHER TYPES OF EVOLVING TECHNOLOGY

Mobile Phone Technology Infrared, GPRS, Bluetooth, Imode, 3G, smart

phones and GPS embedded phones

OTHER TYPES OF EVOLVING TECHNOLOGY

Gaming Technology Gameboy, Sega, Playstation Portable, Nintendo Wii,

Playstation 3

Products and Services

©2007 IDA Singapore.

BeforeSERVICES

SERVICES

©2007 IDA Singapore.

After

SERVICES

FaceBook Platform for web application development YouTube Streaming media online

PRODUCTS

Google Android Phone - Search engine software - New operating system

Window Mobile 7.0

PRODUCTS

Name Sony PlayStation 2 Wii

CPU 294 MHz MIPS "Emotion Engine"

729 MHz PowerPC based IBM "Broadway"

GPU 147 MHz "Graphics Synthesizer" 243 MHz ATI "Hollywood"

THANK YOU!All of the biggest technological inventions created by man - the airplane, the automobile, the computer - says little about his intelligence, but speaks volumes about his laziness.  ~Mark Kennedy