READY FOR A NEW REVOLUTION?
Bestselling author Jeremy Rifkin discusses the gains to be reaped from the Third Industrial Revolution and how the Internet of Things will change the game.SOLUTIONS
Jeremy Rifkin is a one-man think tank. The economist jets around the world to advise governments and corporations, and to give lectures at many of the world’s leading corporations and academic institutions in some 30 countries. Over the last 40 years he has also written 19 books on a wide range of topics, from new advances in science and technology to global economic trends and sustainable development. Rifkin’s most recent bestseller The Third Industrial Revolution: How Lateral Power is Transforming Energy, the Economy, and the World has even inspired some global trends of its own.In 2007, his vision of a sustainable, post-carbon economy was endorsed by the European Parliament, and is now being implemented by various agencies within the European Commission as well as the 27 EU member states. World leaders including German Chancellor Angela Merkel and French President François Hollande welcome his advice. China’s Premier Li Keqiang is an outright Rifkin fan and has recommended his top economic planning and strategy officials pay close attention to the Third Industrial Revolution (TIR).
In addition to advising national governments, regions, and municipalities on developing plans for the Third Industrial Revolution, Rifkin has been a senior lecturer at the Wharton School’s Executive Education Program since 1994. There he instructs CEOs and senior management on transitioning their business operations into sustainable TIR economies. Quite a few of the world’s leading CEOs have also joined him at the Third Industrial Revolution Global CEO Roundtable, a cross-sector collaboration among major global companies, governments, and energy cooperatives to discuss plans for a TIR infrastructure based on renewable energy, energy storage, smart utility networks, electric vehicles, and high-performance buildings.We are in the endgame spasms of the second industrial revolution. But smart companies are moving. I talk to a lot of them and they see the huge potential.IN YOUR BOOK THE THIRD INDUSTRIAL REVOLUTION, YOU ENVISION TWO FUTURES: THE COLLAPSE OF ECONOMIES DUE TO OIL-POWERED ENERGY SHORTAGE AND GLOBAL WARMING, OR THE SWITCH TO RENEWABLE ENERGIES. WHERE WILL WE BE IN 20 YEARS?
Technology is now moving so quickly, we are on an exponential curve toward the Third Industrial Revolution. That means the switch to renewable energies.
BUT THE UNITED STATES IS AWASH WITH CHEAP ENERGY FROM FRACKING, CHINA IS BURNING COAL LIKE CRAZY, AND THE UNITED KINGDOM IS PLANNING A NEW NUCLEAR PLANT. ONLY GERMANY AND A FEW OTHER SMALL EUROPEAN COUNTRIES ARE INTO RENEWABLES.
Shale gas is a bubble. It will plateau in the U.S. around 2020 and then rapidly decline after 2025. Fossil fuels are getting more expensive, and the civilization is made out of them. The technology of the twentieth century is based on centralized energies. That is about to change dramatically. The Third Industrial Revolution is decentralized energy, which will make every building its own power plant. Germany already has one million of these buildings. And China is getting on board really quickly.
THERE IS A LOT OF TALK ABOUT SHIFTING TO SUSTAINABLE ENERGY. BUT WHAT IS REALLY HAPPENING?
Quite a lot. Look at Germany. The country already has almost 25% green energy. Sustainable energy is just pillar one of the revolution. Pillar two is also in place: buildings with their own energy production. Now the third pillar must be constructed: energy storage. The big energy companies like E.ON are moving there. Pillar four is communication: smart grids integrating the Internet and the energy infrastructure. Deutsche Telekom is doing this. And finally pillar five: electric and fuel-cell vehicles. Large auto companies already have the cars, and now Daimler is building fuel-cell stations. When you put all this together, you have a general purpose technology platform. And it introduces the Internet of Things.
YOUR NEW BOOK ARGUES THAT THE INTERNET OF THINGS WILL COMPLETELY CHANGE THE WAY IN WHICH BUSINESS IS CONDUCTED.
People think the Internet of Things is just devices connected for IT purposes. That is only the beginning. What will really happen is that three Internets will be created and merged into one. There already is a communications Internet. The Third Industrial Revolution will spur an energy Internet that is emerging now, and finally it will create a logistics and transport Internet that is new. And then everything is in place for a new productivity revolution.
WHAT IF COMPANIES DON’T WANT TO GIVE UP THEIR OLD BUSINESS MODELS?
Then somebody else will be there first. Logistic companies for example. They are right at the center of the infrastructure that has to be set up. Let’s say the logistic companies set up their CPO – a chief productivity officer – who brings the three Internets into one: communication, an emerging energy Internet, and the beginnings of a logistics Internet. CPOs will have in their division full knowledge of communication and IT, energy services, transport, and logistics.
SO THE OLD MODEL OF MOVING GOODS ACROSS THE GLOBE IS OUTDATED?
A lot of transport will change to continental transport. We are heading to continentalization. The second industrial revolution was about globalization. But now it is about continentalization because the price of moving goods across oceans and continents is continually moving up. Transport companies are already feeling it. The Third Industrial Revolution will allow you total integration across continents. It is a tremendously exciting, challenging, and uncharted territory. We are all thinking this out as we go.
WILL WE NEED MORE OR LESS TRANSPORT?
We’ll need smarter transport. The key is productivity. Logistics now is dysfunctional, if you look at thermodynamic efficiency. Trucks that go empty are nuts. What is the biggest single cost in logistics? Energy! Not only from moving the goods, but also warehousing them. Imagine what will change if energy production is moving to near zero marginal cost.
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