Ride the Kondratiev Wave to Bigg Success

ride the waveSpring is here. It’s been teasing us lately with some pretty warm days. We’re looking forward to the green that comes with spring. And speaking of green, let’s talk about another kind of spring – a spring that has to do with the economy – Kondratiev Spring.

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The long cycle

We’re all familiar with business cycles – a boom followed by a bust. Lately, it’s been more like a boom, followed by a bubble and then a bust!

There’s another cycle with which you may not be familiar. It’s a long cycle called a Kondratiev wave. It’s named for the Russian economist who observed that capitalistic economies go through forty to sixty year cycles as well as business cycles.

The long Kondratiev wave can be divided into four seasons: winter, spring, summer and fall.

Kondratiev Winter

Winter is the time of decline but it is also the time for creative destruction, to use the term popularized by Joseph Schumpeter.

It’s the time for entrepreneuring!

As the excesses of the previous seasons are wrung out, opportunity presents itself. Innovation is sparked.

That’s what gets us out of the Kondratiev Winter.

If you think about the calendar year and the developed world, winter is the only season that is split up. We begin the year in winter and end the year in winter.

Who can doubt that we’ve experienced a Kondratiev Winter? There are just two questions:

1. When did it start?
One obvious thought is that it started in 2007 or 2008 as the housing bubble crashed. However, some experts believe that the Kondratiev Winter actually started with the bursting of the dot-com bubble in the year 2000.

2. How long will it last?
Kondratiev Winters can last ten to fifteen years. So we may have seven or eight years to go. Or we may be entering Spring now.

How does this affect you?

Bigg success is about entrepreneuring your life – taking full control to design and build the life that perfectly fits you. So let’s talk about some entrepreneurial strategies revolving around the Kondratiev wave:

Winter is the time for creativity.
It’s the time to test new ideas. If an idea can survive Winter, it should do great in the Spring.

Spring is the time for growth.
You’ve tested ideas in the Winter. Feed the ones that show promise. Kill the ones that don’t.

You feed the good ones by investing time and money, two of the five elements of bigg success.

Bigg opportunities are right in front of us now.
Depending on who you listen to, we’re either on the verge of Spring or we have a little way to go. In either case, now is the time to act.

Time’s a wasting! In fact, if we’re on the verge of Spring, you better really act fast on that great idea you have!

Every season presents opportunities.

Yes, it’s time to act on your great idea. But don’t feel like it’s an all or nothing thing. There are always opportunities. You just have to find them.

Here’s why thinking about Kondratiev Waves is so important. Surfers love the bigg waves. So do entrepreneurs because bigg waves create more opportunities.

The good news is there’s a bigg wave coming … and it leads to bigg success!

What do you think? Are we on the verge of a Kondratiev Spring?

Direct link to The Bigg Success Show audio file:
http://media.libsyn.com/media/biggsuccess/00566-032210.mp3

(Image in today’s post by timobalk)

9 replies
  1. Julian
    Julian says:

    I wonder if we are actually in “Kondratiev winter” and the cycle is at its 30 or 40 year end or beginning. If I consider the major businesses of the past 30 years who have influenced our economy. The media, the manufacturers, the key individual investors. A number are in decline and do not appear to be able to reinvent themselves to meet the demands of our ecological age. I may be way of the mark, however if we are thinking a big cycle then the last 30 years has been a significant period of technological development, shifting sands of manufacturing companies, increased use of natural resources, an amazing leap in educational standards, and of course the massive increase in personal computing that includes unprecedented communication capabilities.

    Reply
  2. George & Mary-Lynn
    George & Mary-Lynn says:

    You very well may be right, Julian. The experts are mixed on when it started – some think the dot com bubble burst started it; others think it was the recent bust from housing. Initially we fell more in line with you. As we did research for this show, we came to understand the other point of view. However, we’ll only know for sure years from now. However, one thing is for certain – both Winter and early Spring are two great seasons for entrepreneurs.

    Reply
    • George & Mary-Lynn
      George & Mary-Lynn says:

      We’re committed capitalists, Matt so we’re not talking about an end of the “system”. However, it is critical that we understand cycles and their affect on our lives and businesses. Sounds like you’re onto it!

      Reply
  3. Matt
    Matt says:

    Interesting. I see a number of medium to large businesses struggling with the change in marketing, sales and service concepts. There appears to be a loss of strategic focus and planning. I read of many companies who have reduced the marketing budget and although there is a significant increase of activity on the internet, there does not appear to be much control with managing methods across many approaches.

    Reply
    • George & Mary-Lynn
      George & Mary-Lynn says:

      We think you’re onto something here, Matt. While strategic focus is more important than ever, it’s difficult to plan in times of rapid change and uncertainty. The line between planning and execution has blurred – launch a strategic initiative, learn and adapt.

      Reply
  4. Mike
    Mike says:

    Dear George and Mary-Lynn,
    I believe that you may have overlooked one very important facet of the Kondrotiev Cycle. That has to do with regulation… Hoover removed many financial regulations and the markets went parabolic, ending in 1929 with the first crash. Then the markets rallied back roughly 70-80% and then rolled over again in 1930and did not bottoming until 1934 about four months after the Glass-Steagall Act was made law…(G.S. came after the FDR administration, Pecora hearings of 1933 which made clear the causes of the crash). A Republican initiative (Leach/Blyle) removed G.S. in 1999. In my opinion, the first melt down of October 2007 was a direct result of that regulation removal.To date it has not been reinstated. In my opinion we are about to enter the dreaded second crash because of that lingering act of deregulation….

    Reply
    • George & Mary-Lynn
      George & Mary-Lynn says:

      That’s quite a history lesson you’ve provided, Mike. We could go on and on with our thoughts on the bursting of the housing bubble. But we already covered it. See: http://biggsuccess.com/2010/09/28/3-tips-to-avoid-moral-hazard/

      As for a second crash, we rarely try to predict the future. We do believe the Kondratiev Winter is still the season and will be for at least the next few years.

      But keep in mind – this is when transformational shifts occur. It’s definitely an opportunity for entrepreneurs!

      Reply

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  1. […] Economies go through seasons as well. And it sure seems to us like we’re in winter. […]

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