The Digital Economy – Is Digitalization The Sixth Kondratieff Wave?

Over the last 75 years or so, digitalization has become an indispensable part of our lives, permeating nearly every area. The invention of the first operational digital computer back in 1941 was the starting shot for an intensive digital development journey. Factories, offices and entire companies were digitally networked and automated, first internally, then with external partners. These days, the whole world is digitally networked over the internet, satellites and cable, right down to the darkest corners of our personal lives. Due to the speed and comprehensiveness at which it spread, digitalization is often considered to be a pillar of the sixth Kondratieff wave. But does digitalization really meet all the Kondratieff criteria?

At the beginning of the 20th century, the Russian economist Nikolai Kondratieff developed his long wave theory, in which he describes the waves of economic development over the last 250 years or so. He attributes these economic cycles to paradigm shifts and the associated investment in innovation, and was able to empirically show the existence of five such waves during this time period. The main characteristics of the five Kondratieff waves and their effects on industry and society are summarised below:

A Kondratieff wave typically lasts for between 40-60 years and is triggered by ground-breaking discoveries; technological, ʽfundamentalʼ innovations, which open up completely new markets. These fundamental innovations have led the transition from the textile to the steel ages; from the discovery of the electrodynamo principle and the developments in modern chemistry to an industrial society complete with mass transportation, and finally, to the information society, which has its origins in the 1950s. A Kondratieff wave has three main characteristics; a new market opening up, full employment and a ʽlifecycleʼ of 40-60 years. How do digitalization and the digital economy fit into this picture?

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