What Is a Global Business Cycle?

According to the forecast of the regular change of the business cycle, if there is no higher-level innovation in the IT industry in the future, the fifth world economic cycle led by IT will be replaced by a new cycle led by the biological, life and genetic industries.

World economic cycle

In recent years, the slowdown of the US economy indicates that the IT industry has entered a relatively mature period. Does this mean that the fifth world economic cycle dominated by the IT industry has begun to enter the stage of cost competition from the advanced stage of innovation, we should study it in depth. ^[1]

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First, it heralds the coming of a new technological and industrial revolution and its new cycle. From the analysis of the supply and demand of the global economy, in the sixth industrial revolution that will break out in the future, the most likely to be the dominant industry in this cycle will be the biological, life and genetic industries closely related to extending the human life cycle. This is because the industrialized society has solved the problems of human food, clothing, transportation, urbanization, and informatization, and it is the main technological revolution that will cause greater qualitative changes in the production methods, lifestyles, and thinking modes of human society in the future. How to delay the human life cycle is a major issue of common concern to mankind. Therefore, with technological innovation and breakthroughs in key areas such as biology, life and genes, a new cycle is likely to come.

Second, the technological revolution is the economic law that led to the industrial revolution and the economic cycle. The course of the five industrial revolutions proves that the technological revolution is the precursor and prerequisite of the industrial revolution and cycle. In order for developing countries to achieve leapfrog economic and social development, they must first occupy the commanding heights of the scientific and technological revolution and make new strides in the combination of scientific and technological innovation and institutional innovation in order to win competitive opportunities in a new economic cycle.

Third, the industrial revolution has the effects of diffusion, radiation, demonstration, and acceleration. The technology of the IT industry entering the stage of cost competition will inevitably spread to the world. The international division of labor and reorganization of the IT industry is the general trend. Low-cost comparative advantages and market competitive advantages will be more conducive to China's participation in the international division of labor in the IT manufacturing industry. Therefore, China must give full play to its latecomer advantages, comply with the development law of the industrial revolution, speed up making China a world IT industry manufacturing center, and promote the optimization and upgrading of the industrial structure. (Zhang Qizuo: China International Economic Research Association)

Economic Daily News January 13, 2003