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How have we gotten here and what
can we do to adjust our course? In this
article, intended to solicit debate and
inquiry, we examine the key drivers
of change to help better understand
their nature and the events that have
surrounded them, and to contribute to
discussion of how to bring business,
economies, and society back into
greater alignment.
The Long Growth Wave,
1945–89
With the end of World War II, a virtuous
cycle began that lasted for nearly 45
years, and that continues to affect
the way we think about business,
economies, and society. The virtuous
cycle represented an unprecedented
alignment of economic growth with
social progress, resulting from the three
drivers: globalization, technological
advances, and financialization.
One key element was triggered by
the Marshall Plan, an initiative that
gave loans and grants from the U.S.
to other countries (totaling about
US$13 billion between 1947 and
1951) and was intended to help rebuild
Europe and Japan. The Marshall Plan
went beyond funding; it established
structural changes with an eye toward
multinational interdependency. Its
lessening of regulations and trade
barriers was the first of many steps
toward forming the European Union.
Together with such measures as the
Bretton Woods agreement of 1944,
which established monetary exchange
among nations, the plan laid the
foundation for an increasingly global
economy.
The result was sustained and
significant economic growth, delivering
first recovery and then social progress.
Companies sold predominantly to their
rapidly growing home markets, full of
consumers making many purchases for
the first time (most dramatically in the
U.S., where the GI Bill helped create
a large new group of professionals,
composed of returning veterans). The
economic engine worked exceptionally
well and in alignment with the
communities and societies within
which it operated. Rising tides lifted all
boats.
This was also a period of significant
technological progress, leading to the
1965 formulation of Moore’s Law,
which predicted continued exponential
growth in computing power. Many of
the technologies that made personal
computers and the Internet possible
began in the 1960s. Some, like packet
switching and artificial intelligence,
were prerequisites for today’s cloud
computing–based platforms and
Internet of Things infrastructure. The
mobile phone, a version of which was
introduced commercially by AT&T in
1946, would take almost six decades to
develop into today’s smartphone, the
fastest-selling gadget in history.
Meanwhile, a globally interconnected
economy took shape, featuring
increasing levels of international trade
(see Exhibit 1). According to the World
Trade Organization (in its 2008 World
Trade Report), international exports
grew more than 8 percent per year
between 1950 and 1973. New markets
opened up, communications and
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