EXPANSION PHASE                  CONTRACTION PHASE



Rapid introduction of new tech-         Technological stagnation
nology and new business models

Easy funding for new                    Difficult for new competitors
and innovative businesses               to emerge

Strong productivity growth              Weak productivity growth

Capital investment soars as             Technology spending flattens
companies try to keep up with           out, while overall
new technology                          investment falls

Inflation is held down by rising        Inflation rebounds as
productivity, intense competition       productivity growth slows
from new companies, and                 and new startups become
falling prices for new technology       less common

Buoyant stock markets                   Depressed stock markets