7 
separated by a long drawn out process, starting with 
a long boom phase dominated by product innovations (high 
demand) and a subsequent recession and depression 
phase, dominated by process innovations and displacement 
of labour (demand falling). 
It might be mentioned that the two phases can also be 
separated in space: Countries which import the innovation 
might merely experience the displacement effect. 
The process seems, on the face of it, to coincide with 
the creation and decline of industries which are created 
by major product innovations (railway, motor car) and 
loose more and more employment capacity by large scale 
economies and learning - by "rationalisation" - later 
declining also in output when they are superseded by 
other developments. 
What does not seem to be quite answered in this long wave 
picture is the question why the product innovations 
should be bunched (clustered) or why it should last a 
certain fairly long time until a new major product 
innovation emerges. Are the resources (capital, credit) 
all absorbed by one big thing, so that interest in any 
thing else, even imaginative speculation in other 
possibilities, is excluded ?