The Shift in Technological Platforms and Business Ecosystems Over Time
Kondratieff’s Long and Short Cycles and Other Macrohistorical Theories
Epoch Change blog series, No. 2
Dr. Tuomo Kuosa
Tuomo is co-founder and Director of Futures Research at Futures Platform. He holds a PhD from the Turku School of Economics and is an Associate Professor (Docent) of Strategic Foresight at the Finnish National Defence University.
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The world’s perhaps best-known macrohistorian is the Russian economist Nikolai Kondratieff, who identified the logic behind the renewal of Western free-market economies. In the 1920s, he found out that every ca. 50 years, capitalist systems form a new technological platform that also becomes the foundation for a new business ecosystem. This semi-structured shift, which can be seen across all open economies, drives the business ecosystem into motion and allows for optimal allocation of resources. This is something communist or other plan economies lack, which makes them rigid. These techno-economic platforms are called long K-cycles, each composed of four micro-cycles of approximately 12 years.
Macrohistorical analysis aims to understand universal laws, drivers, underlying long-term patterns and cycles in historical processes, societal change, and world history. It asks: what shapes do historical processes take? Are they linear, meaning that change is irreversible and progress continuous? Or are they cyclical, marked by rise and fall, expansion and contraction, where the more things change, the more they stay the same? Or is history spiral-like, folding back on itself over time? And lastly, if these patterns occur at semi-structured intervals, what are the retroactive models—or forces—that cause such repetition?
The macrohistorical retroactive models can be divided into three main groups:
1. Generational Shifts and War-Peace Cycles
Perhaps the most well-known retroactive models are the generational shifts in social psychology. Ibn Khaldun’s (1332–1406) “father-and-sons” model is often cited in this context, particularly in relation to war-peace cycles. His ideas built on earlier thinkers such as Sima Qian (Szu-Ma Ch'ien, 145 BC–86 BC) and were later developed by scholars like Oswald Spengler (1880–1936) and Arnold J. Toynbee (1889–1975). More recent theories in this area, which predominantly focus on social generational shifts and turmoils, include Peter Turchin’s structural-demographic theory and Strauss & Howe’s generational cycles.
2. Social Cohesion and Natural Life Cycles
Another main group of retroactive models focuses on theories of social cohesion and natural life cycles leading to the eventual breakdown of civilizations. Ibn Khaldun again plays a foundational role here, arguing that the loss of “asabiyyah” (group feeling or social cohesion) is a key driver of disintegration. This idea influenced thinkers such as Georg W.F. Hegel, who described the Zeitgeist as a force for inevitable change, stating that ”when the time is ready for change, no mighty in the world can stop it”. Joshua S. Goldstein’s (1952 -) theory of 150-year world hegemony cycles is perhaps the most known systematic formulation of this idea.
3. Techno-Economic Platforms and Ecosystem Renewal
The third group are the theories of techo-economic platforms and economic & political renewal. The most known macrohistorian in this domain is Kondratieff, whose work laid the foundation for understanding how open market economies periodically renew themselves and reallocate resources through semi-structured intervals.
Kondratieff’s 50-Year K-Cycles and 12-Year Micro-Cycles
According to Kondratieff’s cycles, we are currently in the final phase of the fifth 50-year K-cycle, which has been driven by Information Technology. This phase, called "D: Depression", is a 12-year micro-cycle, where the platform's disruptive potential is more or less consumed. It will be followed by the "I: Improvement" micro-cycle, marked by early-stage technologies from the emerging K-cycle beginning to enter the market. These technologies already exist but are still in their infancy, and they are starting to provide an economic boost as they gain traction.
As an analogy, think of the early IT cycle: today's large language models (LLMs) resemble early-stage technologies like the first NMT mobile phones, ARPANET, SMS, or the Commodore 64—not today’s smartphones.
So, what will be the main technological platform of the coming sixth K-cycle? First of all, it will build on elements that already exist and that are beginning to improve our current IT-based business ecosystem. We can say quite certainly that AI, and later AGI, will be at its very foundation.
The other elements shaping the next business ecosystem are less certain, but according to my initial analysis, they would likely include quantum computing, next-generation internet with +6G, virtual environments, digital twins, green tech and circular economy models. These technologies will start to converge and gradually form the sixth technological platform and the new business ecosystem that builds around it.
An illustration of Kontratieff’s six K-cycles and the micro-cycles
The previous 50-year K-cycles (also known as Meta cycles) have been the following:
1790-1850: First
1850-1900: Second
1900-1940: Third
1940-1990: Fourth
1990-2030: Fifth
Each of these K-Cycles consists of four 12-year micro-cycles: P, R, D, I:
P (Prosperity): The market is extensive and grows strongly due to the new platform and its disruptive technologies.
R (Recession): The market becomes saturated with already maturing technologies that no longer provide a real boost to business.
D (Depression): The platform's disruptive potential is more or less consumed.
I (Improvement): Early-stage technologies of the emerging cycle begin to boost the economy.
Criticism of the Kondratieff long and short cycles theory
Kondratieff, who was initially tasked to prove the superiority of communist economies over capitalist economies, ironically ended up showing the adaptive strength of capitalist systems. Not so surprisingly, Kondratieff died at an early age in Stalin’s purge in 1938. The platforms after this year have been formulated by other economists.
One common criticism is the imprecise nature of the theory, particularly the difficulty of agreeing on start and end years of each K-cycle. Additionally, the economic booms and busts within the fourth and fifth cycles haven’t always followed the expected logic of the micro-cycles.
The real benefits of the theory
Kondratieff’s K-cycles theory can be defended against criticism by acknowledging that, yes, it is difficult to agree on the exact years and events that mark the start and end of each cycle. There is also some fluctuation within the cycles themselves, mostly due to unexpected factors like political decisions or a lack of synchrony with other types of cycles. However, pinpointing exact dates is not the main purpose or value of the theory. Its real value lies in revealing the macro-level logic behind how business ecosystems renew themselves over semi-structured intervals.
The micro-cycles (P, R, D, I) have also been criticised for not aligning perfectly with GDP growth or stock market behaviour in specific years. That is true, but the purpose of the micro-cycles is not to predict annual fluctuations. Instead, they reflect how strongly a business ecosystem can benefit from a given techno-economic platform at a particular moment. Hence, the K-cycles’ 12-year framework provides a structure that few other economic theories offer.
Furthermore, when the K-cycles theory is placed in the same context as other retroaction models, we get a more holistic view of how cycles change. If more than one retroaction model-based theory suggests that a cycle shift is likely in a certain time period, we can reasonably conclude that a shift is more probable at that point, or that it may even signal a larger historical change. I call this method synchronisation of cyclical shifts.
This article is the second instalment in Dr. Tuomo Kuosa’s Epoch Change series. You can find the other articles in this series listed below:
The Shift in Technological Platforms and Business Ecosystems Over Time
