The Third Industrial Revolution and how it is going to save the world's future!


Healing ourselves, each other and the planet : 
Crisis situations faced by our planet force us to transcend to a higher level of functioning. The current crisis the world is facing involves global warming. It could result in the sixth and latest extinction of all life on this planet. "The Third Industrial Revolution" by Jeremy Rifkin (an adviser to Chancellor Angela Merkel of Germany) begins by outlining grim prospects for our earth if dramatic change is not effected in the next twenty five or so years. Rifkin says the environment is going to give us a wake call that we would be wise to heed: 

 Global warming causes water related challenges: The crisis has been caused by global warming (when greenhouse gases like Carbon Dioxide, Methane and others block the heat from rising off the earth) resulting in rising global temperatures, the melting of the ice caps and extreme changes in water/rain/flood patterns. For every one percent the temperature goes up, the atmosphere sucks up seven percent more moisture resulting in extreme water events that include extreme floods, droughts, wild-fires, hurricanes etc. 

 Will impact all life on earth: Of all the species inhabiting the earth 99.5 percent have already come and gone. Ironically, Rifkin points out that all this flooding and water related mayhem, fresh water is probably one of the most difficult changes. Forty percent of the world has little or no water. Rifkin points out that the earth has already witnessed five extinctions and that at current rates we could lose 50 percent of our animal species in seven decades. 

 All this environmental danger obviously has economic consequences. Rifkin's Economic assessment follows: He begins with chilling news, he says "We are now in the sunset of a great industrial era." He points out that we can no longer assume continued economic growth will allow us to solve future problems : the old assumption that growth comes from better workers, better machines can no longer be relied upon. 

 The productivity problem: Conventional economics says that progress is driven by "better machines (technology) and better workers (training and systems). But economists know that steep productivity losses are part of each economic process. So far Japan has the highest productivity rating worldwide and that is just 20 %. 

 Shifting gears to increase productivity, escape greenhouse gases and preserve the earth and its inhabitants (human & animal). The first two industrial revolutions were powered by fossil fuels that are finite and which took millions of years to accumulate. 

 Each industrial revolution needs a platform that consists of 
- A communications/ media technology, 
- A transportation technology, 
- As well as fuel resources. 


                        Fuel        Transport          Comm/Media 
First Ind. Rev     Coal          Train (Rail)           Telegraph 
Sec Ind. Rev.      Petroleum  Car or truck          Phone/Radio/ TV 
Third Ind. Rev   Solar/wind  Driverless Rental The Internet/ GPS 


Power (really) to the people: So the third industrial revolution is expected to distribute solar and wind power so that even small home owners can generate their own power and sell it to the local utility. This would result in some power companies going out of business while others embrace the model to become integrators and service providers. 

 Mobility: Instead of having your own luxury car, the third industrial revolution, may allow for more car rentals certainly as well as car sharing. (For every car shared, 50 cars could get knocked out. Eventually 80 percent of all cars could be gone. The advent of GPS controlled driverless cars and trucks would accelerate this process. 

 Communications and Media; Some twenty years ago, TIME magazine named YouTube the TIME "Man" of the Year. YouTube had greatly impacted the media business. Making it possible for anyone with a smart phone to publish TV shows and produce news reports for free. 

 Whole industries are being savaged: Even before that Napster's peer to peer music sharing model had devastated the music industry because people were able to share music without paying for it. Today anyone who wants to write and publish an e-book can do so in days. 

 The Internet of Things: The combination of these technologies is leading to the emergence of a platform known as the "Internet of things" which more and more companies and individuals are connected and which bypasses proprietary e-platforms bringing together more and more individuals and institutions for collaboration, education and of course commerce. 

Helping the Internet of Things become more effective: This platform will have the communications Internet converging with utility networks and GPS enabled transportation networks. It is expected to be in place by 2030. The hope is that corporations and governments will by this time have learned, that this Internet of things works best when it is transparent, collaborative and interactive. 

 Equal access and rules for transparency are important: We need to ensure that governments and corporations don't take over our system. It will be a challenge to ensure network neutrality and also cope with the complexities of the darknet.com. In a network neutral world one will be able to see all the transactions and observe your own efficiency. As more join the network it becomes more relevant and responsive. 

 Dropping zero marginal costs: Zero marginal cost is what an activity costs after fixed costs are paid: The Sharing Economy is the first new economic system since capitalism. Young people are already producing their music, information system and data since Napster. Everywhere up and coming zero marginal content networks content producers are emerging to challenge existing concentrations of power such as for profit publishers. Solar and wind technology costs are plummeting. Energy production at nominal cost will transform small business. Energy corporations are coming together and using energy performance contracts to build relations with producer networks. We will have to find a way to finance the traditional. There needs to be a way to fund the final surge of activity to retrofit utility companies, buildings, roads etc. to be part of the smart Internet of things. 

 Upsurge of social entrepreneurship through social networks. We are shifting from ownership to access (with a new take on poverty people may choose to rent high ticket items as needed. A new consciousness for a new era: 

 Ownership to Access: The sharing and ownership models are both expected to exist. Some categories like toys, tools and books are expected to have more temporary users. In the process costs are lower. 

Markets to Networks: Businesses will shift more towards selling through alliances or networks and in the process reduce marketing costs. Consumerism to sustainability: Corporate marketing cultures have focused on promoting consumerism without addressing larger issues like values or sustainability. 
Companies will develop more complex marketing messages as they also want to be seen as responsible corporates. 

Market capital to social capital: Companies will make more efforts to develop social capital that addresses larger societal issues in an effort to win the esteem of their markets. 

There is reason to hope as young people are changing the way they define key ideas: 
 - Freedom now means more choice (it previously meant autonomy.) 
- Power no longer required pyramid control it now means influence within a network. 
- Community now means that its where people band together with other individuals and compete with other networks.
- Shifting from Geopolitics to a greater ecology consciousness. 
- Young people are beginning to ask inconvenient questions. They are learning about their ecological footprint and the truism that everything impacts everything else. 
- Less energy use: People are beginning to produce more energy on the one hand and on the other use less of it. 
- Animal rights: As people understand that what goes around comes around they also become more aware of the rights of animals. 
- Not for profit trends: Employment shrinks and shifts: As conventional full time employment shifts towards part time and social services, not for profits (providing 10 % of jobs currently)are employing more people and beginning to provide more services for fees.  
- Educational Trends moving towards greater sharing: Schools in the past were designed like "knowledge factories." With strong central authority and values that proscribed the sharing of knowledge (described as cheating!) In France, seven universities and around 200 schools are learning to work in teams. Here it is the students who teach (teachers facilitate). Our human empathetic spirit must be strengthened and put to work to benefit mankind. 

Agricultural implications: Agriculture is a major player in the fossil fuel economy. Fertilizer is ⅓ fossil fuel dependent and contributes to global warming. (It emits nitrous oxide which is the third largest greenhouse gas after carbon dioxide and methane.) Forty percent of agricultural land is used to grow feed for animals. An estimated 2,000 gallons of water (and 8 lbs of feed) are used to grow one pound of beef. 

 What we need is more organic agriculture that supports local communities. Agriculture also uses a lot of water. Water needs to be well distributed and available locally. 

One new trend is that people have started rainwater harvesting, then storing it on rooftop tanks. 

Utility Management: One of the biggest problems in the world are deficiencies of water and electricity. One billion people have little or no water. There is a strong link between the empowerment of women and the availability of water or electricity. Many women are now setting up micro grids. 

Motivating Business to save the earth: The mentality of the US is to incentivize businesses. The problem is that infrastructure should ideally be built first. We need business, as well as private and social capital to make things happen. Each of us have a role to play. We have only one generation to save the species. Let's get on with the job of saving our world's future.

Jeremy Rifkin is ranked 123 in the WorldPost / HuffingtonPost 2015 global survey of "The World's Most Influential Voices." Mr. Rifkin is also listed among the top 10 most influential economic thinkers in the survey. The survey was prepared at Massachusetts Institute of Technology and used collective intelligence to correlate the rankings.

Since 1995, Rifkin has lectured at the Wharton School’s Executive Education Program at the University of Pennsylvania where he instructs CEOs and senior management on transitioning their business operations into sustainable economies.

2 comments:

  1. That was a very significant and timely round up of one of the best works of Jeremy Rifkin who is not only economic, scientific and sociel thinker and author but also an ethical prophet who woks with a missionary zeal.

    ReplyDelete
  2. Thanks Raj. he also spells hope for global civilization as he urges a new collaborative spirit for business and indeed life itself.

    ReplyDelete

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