An upside down hype cycle is the reassuring Brexit chart you’ve been looking for
Meet the chart that might put your mind at ease over the hand wringing brought about by Brexit.
Gartner’s hype cycle is the go-to chart that lays out the ups and downs of the trends in technology, if you’re not familiar.
There’s the “innovation trigger” stage when ideas are at the earliest research stage, then the “peak of inflated expectations” when we reach peak hype, before falling in to the “trough of disillusionment” when they fail to live up to it. Then we reach the greener and more pleasant pastures of the “slope of enlightenment” and “plateau of productivity” when these things really bed in.
Here’s the most recent one.
But now one clever analyst has turned that chart on its head – literally – to help us explain the post referendum fallout.
First, Mark Raskino put it to the test of whether the hype cycle applies to the Brexit situation.
“Is it an “innovation”? – yes, an unusual one, but nonetheless I can see it qualifies. The UK is the first country to try deliberately exiting a regional major trading block in the apparent pursuit of self interest. Is there a “market” adopting this? Yes – its forced to. Was there a clear trigger? For sure – a vote in June. So it looks like hype cycle thinking might be applicable,” he wrote in a blog post.
However, it’s negative hype and that now inverted chart also needs new terms – the “peak of panic”, “return of rationality” and “plateau of pragmatism” just about sums up many people’s feelings toward the post-Brexit world we live in.
“It kind of makes sense. The market hysteria gets very bad – the effect of social contagion and press amplification,” he said.
“But then it turns out the sky isn’t falling quite as quickly and severely as first feared. Stock markets are doing OK. UK unemployment is relatively low. The pound is down but not at dollar parity as some suggested. So a lot of rational reality sets in. Some might think the whole episode was a false fire drill – like Y2K, and they might then ignore it too much.”
Ultimately, Raskino says it’s likely that there will be a “moderate enduing negative value expectation effect in the minds of the many”.
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Where are we exactly in our journey towards the plateau of pragmatism? That’s more difficult to say.
“It’s such a hard question to answer. My crystal ball is no better than yours,” Raskino told City PM. But pushed to take a guess (as are we all these days)? “Between two and five years.”
But for anyone having to deal with uncertainty, he gives two pieces of advice:
- Hold your nerve and do not overreact to the massive negative hype. It will pass. Things will correct.
- And then remember something else – its just one part of the picture. Other innovations – such as new trade deals with commonwealth countries might yet compensate for that enduing loss of European integration benefits.
Some sound advice for anyone in business looking to sleep a little better at night these days. And a handy chart to pull out when everyone around you might be losing their heads.