How much will life change in the next 25 years? The reality is A LOT, so much more than you could probably imagine. We are at the end of an era, because the Third Industrial Revolution is set to drastically change the world as we know it. I look forward to one day telling my grandkids what people did before the Internet or what gasoline smells like. “How did you meet friends before the social media revolution, Pa Pa?” my grand boy would ask. “Well you know, we’d just walk or bike to their house and ring the doorbell.” “Wow…” Our stories of this Millenium Shift Era will be similar, perhaps even better than our grandparents’ stories of World War II and the Cold War, because the change we will experience in our lifetimes is incredible. Here’s a revolution that will finally benefit every single person and creature on the planet. It’s the end of capitalism.
Estimated Read Time: 15 minutes
Jeremy Rifkin is an American economist and Social Theorist who describes the nature of the Third Industrial Revolution in his 2011 book, The Third Revolution; How Lateral Power is Transforming Energy, the Economy, and the World. In it, he discusses the paradigm shift we will soon be faced with – the Collaborative Commons – which by 2050 will be the primary economic system for most of the world’s population. According to Rifkin, The Collaborative Commons will be “the first new economic paradigm to emerge on the world scene since the advent of capitalism and socialism in the early 19th century. So it’s a remarkable historical event.” A paradigm attributed primarily to the Internet, Green electricity and 3D Printing.
The first industrial revolution in the latter half of the 18th century was the Coal and Steam Revolution, while the second industrial revolution in the 20th century was fueled by Oil. Though the third industrial revolution will develop as a result of the Internet, Energy and 3D Printing, it will revolutionize key sectors of economy: Raw Materials, Manufacturing, Services, Construction, Transport, Information Technology; essentially life as we know.
Rifkin claims that when Internet technology merges with renewable energy, the energy industry will transform similar to countless industries in the early 2000’s. Music companies didn’t understand distributed power when young people first began sharing music online, so online services like Napster, iTunes and YouTube exploded in popularity. Encyclopedia Britannica did not understand distributed, collaborative power so Wikipedia quickly became the leading reference source in the world. Travel agencies couldn’t beat the competitive prices of website services, so most went out of business. The energy industry will soon suffer a similar fate.
Several countries and regions have already contracted the services of Jeremy Rifkin’s consulting group, The TIR Consulting Group LLC. In 2007, the European Union was the first transitional economy to vow implementation of the Third Industrial Revolution’s 5 pillars, soon followed by the ASEAN Union, the African Union and the South American Union. This is not just a pipe dream; it is already happening across the world, (except in North America, where political representatives voted against it). The 5 pillars of the Third Industrial Revolution are a prerequisite for crossing the chasm of this paradigm.
The 5 pillars of the Third Industrial Revolution:
1) Shifting to clean, renewable energy solutions
2) Converting buildings into Micro-Power Plants
3) Hydrogen and other long-lasting energy storage systems
4) Smart Grid Technology
5) Plug-in, Electric, Hybrid and Fuel Cell-based Transportation
The first pillar of the Third Industrial Revolution represents a firm shift to renewable energy.
In 2008, the European Union vowed to cut 20% of greenhouse gas emissions, increase renewable energy use by 20% and cut energy consumption by 20%, between 1990 and 2020 in its 20-20-20 targets. According to Vision 2040, the European Union will employ 100% renewable energy by 2040. And other countries? Well, it will cost $8 Trillion to extract the remaining crude oil from the planet, and we have already passed two major milestones of the oil era: Peak Oil per capita, the peak amount of oil if distributed equally between each person in the world in 1979, and Global Peak Oil Production, the maximum rate of extraction of petroleum, in 2006. The global population keeps growing so our supply of crude oil is quickly disappearing.
Rifkin speaks of drilling other fossil fuels, “They’re dirty, they emit CO2. And in the case of shale gas, there are huge issues of water contamination.” “But what about Nuclear?” a growing number of environmentalists are asking. Rifkin says nuclear is a “waste of time”, “dead in the water after Chernobyl“. Its only comeback strategy was to market itself as the savior to global warming. However, today there are only 400 nuclear factories in the world, which account for 6% of global energy production. Climate scientists say this level must reach 20% to have any minimal effect on climate change. That would mean constructing 1,600 new factories, at least. Going renewable is the only sustainable way to live; fortunately, solar panels and other electricity generators will soon come at a very appealing price.
The second pillar involves technologies that convert buildings into micro-power plants.
On-site Solar Panels, Wind turbines, Geothermal pumps will all generate electricity for smart buildings of the future; you can even turn your garbage into 100% clean electricity. Sweden has actually begun importing garbage because all waste becomes energy. Rifkin predicts in 20 years, electricity generators will cost the price of smart phones today. But instead of a 2 year contract with your local carrier, you get free electricity until possibly repairs must be made 20 some years later. The invention of Solar Paint is set to drastically reduce the cost of electricity. The key is implementing electricity generators directly into buildings, the environment in which we normally need the most energy.
The third pillar, energy storage, may prove to be the most problematic, since energy generally becomes feeble after periods of time.
So if your building relies on solar energy, what do you do at night? Sleep? No energy or energy reserve means no electricity. Storage methods should be efficient and waste little energy. In its initial stages of operation, before expanding to regions in diversified time zones, the Smart Grid Energy Internet may face difficulties meeting energy demand at certain times. Hydrogen and other efficient energy storage systems are to be kept in every micro-plant building. It will also be used for transportation (pillar 5).
Pillar FOUR, Internet technology must converge with energy systems
Next, Internet technology will converge with energy systems to create a Smart Grid which allows selling spare electricity Peer2Peer in a democratized energy system, rather than simply top-down, from electricity company to consumer. Solar and wind farms exist today but renewable energy will never be as expansive, nor as effective in centralized, concentrated energy sources as in a democratic infrastructure.The future’s micro-plants will produce their own electricity, and once the building’s energy needs are met and a healthy reserve stored, the building can share its electricity on the Smart Grid. This is similar to how information is handled online today. When the grid becomes large enough, energy will be virtually free like information today.
The Last Pillar involves transportation
In the future, vehicles will run on fuel cells (pillar 3) and renewable energy, charged via the smart grid at any parking spot in the Smart City. Solar Paint and other energy generators can even be installed in the car to reduce dependency of the grid.
How will Life, Jobs and Economics be different in the future?
Life
Life of the future will revolve around the Internet of Things, connecting every person on the planet to at least 50 billion smart products in 2020. The Internet of Things is inevitable, with most large tech companies already planning Smart Cities. Literally everything in your home will be connected to the Internet: cars, refrigerators, doors, clothes. Adding sensors to normal, everyday products converts them into Smart Products, which can be studied and managed in the cloud. The fun part will be realizing how everyday products are best improved by big data. Are you brushing your teeth correctly? Your toothbrush will connect you to your online dentist and offer suggestions, and don’t forget to floss. Did you forget to turn off the stove or the TV before you left home? No worries, just turn them off with your mobile device. A Dutch startup, Sparked, has already created a sensor for cattle which notifies the farmer when one of the cows is sick or pregnant.
The Internet of Things truly proposes an intelligent ecosystem of sensors; consider this diagram of interconnectivity by Cisco Systems Inc, automatic routine when a meeting is delayed:
The Internet of Things will, in such situations, give us more time for invaluable rest whilst ensuring we arrive on time to all our commitments. Technology will finally fulfill Palm’s vision of the future in the 90’s, to be the only assistant anyone needs. Indubitably, people of the future will be more organized.
Jobs
There is now a paradox at the heart of capitalism. Traditionally, a sustainable business model involved customers paying higher prices for a product or service than its total costs of production. But what happens when the costs of production are nearly free? For example, once installed, a solar panel or wind turbine generates electricity for free. Zero Marginal Cost is a term that describes a situation where additional units can be produced without extra costs for producing it. For example, installation of a solar panel may cost a few hundred dollars in 20 years but after that you convert free solar energy into all-purpose electricity. Once an energy reserve has been stored, smart buildings can sell their energy to the grid but what happens to the price of energy when the cost of producing it disappears? The Information Internet already connects 2.5 billion people who are able to share information online for free. The Energy Internet will work similarly by 2050, transferring clean, Zero Marginal Cost energy between 9 billion recipients across the world. The Third Industrial Revolution will bring so much more than just energy though.
3D Printing, another major component of the Third Industrial Revolution, adds a new dynamic to the traditional business model. Historically, manufacturing has been subtractive, in that parts derived from natural resources and were then wasted to produce a final product. With 3D Printing, comes additive manufacturing; Products can be printed directly into their final form without any waste. Small engineering and design firms will take great advantage of this technology to return a calculated profit. In 20 years anyone will be able to run a business 10 times more productive and sustainable than the most successful business today. People have already created their own personalized products as diverse as artificial limbs, a working gun, an acoustic guitar, cell phones and even cell tissue. Just imagine what the future of this technology offers.
Combine the Energy Revolution with the Internet and the rate of Automation in the Workplace and you get internet services, similar to apps, with direct access to free energy sources. I can already imagine Uber in the future, the car self-driving, running off clean, free energy. You guys know about the Google self-driving car, right? The prototype is now operational. Last month, Tesla Motors, led by Elon Musk, announced it would release an upgrade to every Tesla Model S by June 2015 which includes highway autopilots and automatic garage parking. In 20 years, sensors will be all over roads and cars. Catching a ride anywhere will literally be as cheap and easy as using an app.
I know what many people might be thinking, “Automation in the workplace? So eventually there won’t be any jobs left?” Almost. A few types of jobs are here to stay for longer than others. IT, Engineering, Design and Content Creation will most-likely be the pillars of the future economy; creating the world as we know it. And Politicians are likely to continue managing society. #Alpha However, most jobs will be lost to Big Data algorithms.
Rifkin says, “This revolution favors small and medium-sized companies, producer co-ops that can scale laterally”. Does that mean all large companies will disappear? Not all, but many will; the large companies that will survive are currently primary producers but are hurriedly trying to transform into aggregators and networks to stay relevant. Through networks of partnership, SMEs will be on a level playing field to cooperate with large companies.
Economics
When oil reached $147 a barrel on world markets in 2008, all other prices across the supply chain skyrocketed because so much of the economy depends on fossil fuels: fertilizers, pesticides, pharmaceutical products, construction materials, power, transport, heat, light. Meanwhile, there were food riots in 22 countries, because the price of rice, wheat and other basic foods doubled, then tripled. Oil reached peak price in July 2008, two months later the financial market collapsed.
This prime example shows the correlation between energy costs and the price of basic commodities. What happens to the price of basic commodities when energy is produced with Zero Marginal Cost, essentially free once installation fees have been paid? Nah, I ain’t no communist or nothin’. I was born a Texan, sir. But what happens when operation costs disappear because individuals own the means to electricity and personal manufacturing? People in 2035 will live significantly cheaper lives than we do now as they will be producing most of their own commodities.
Rather than investing simply to make money, some people have already begun to think about investing sustainably. If you become energy dependent, that’s just one less bill each month, isn’t it? More independence. Maybe it even becomes an income, an investment that pays for itself over and over again. I can imagine the various lifestyles of post-consumers, uninterested in social obligations, namely surfers, picking a deserted beach to set up camp with a solar panel and 3D Printer making their own boards, swimsuits, beds, rooms, gadgets; anything they may need. People will be sustainable in more ways than one.
Michael Bauwens, Founder of the Foundation of Peer-to-Peer Alternatives chooses to think “Beyond Jeremy Rifkin” and explain how the transition to the Collaborative Commons economic system will occur. To demonstrate the transition to the Collaborative Commons, Bauwens first examines the transition of the Roman Empire to Feudalism, then analyzes the already-existing, commons economy to deduce future social paradigms.
The Roman Empire faced a globalization crisis, when slave and gold supplies ran low. At a certain stage, the benefits of expansion were no longer sufficient to outpace the rise in costs of managing complexity. The Empire transitioned to the Coloni system, which gave rise to agrarian serfs. Rather than slaves, contracted, live-in farmers were employed to work and in return paid a certain proportion of the farm’s produce to the land owner.
The transition can be summarized in three steps:
1) A crisis occurs in the dominant system;
2) An exodus occurs at the bottom of the system;
3) A section of the managerial class orients itself to the new mode of value creation and distribution.
Hence paradoxically, the former ruling class enabled the transition. If we consider IT companies today’s ruling class, history is set to repeat itself. Countless technology companies are already spending millions of dollars in research and development of Smart City planning, all hoping to have a greater influence on future technology trends. Billions are being spent on developing these cities, but once developed, the technology will be accessible by all.
Netarchical Capitalism, the current form of Collaborative Commons, is based on Common Knowledge pools that create value, and is becoming an increasingly strong sector of the economy, currently 1/6th of USA’s GDP. However, since 100% of its value is derived from human cooperation, it produces no hierarchy, no ruling class. Currently, the existing commons economy is a freelance economy of young urban knowledge workers who live from the market economy but increasingly produce open knowledge pools. Bauwens accepts Rifkin’s claims of a post-capitalist future because capitalism that does not pay its value creators cannot exist in the long-term. A post-capitalist market economy, formed by the transition, will consist of entrepreneurial coalitions using their surplus and profit to carry out social goals.
Bauwens was recently asked by the country of Ecuador to develop the first ever research project to plan a national transition towards a social knowledge economy in the aspect of all social, economic and political activities. Scientific labs can be built and operated at 10% of the cost by resorting to open scientific instruments. Ecuador’s initiative to facilitate such a transition in its infancy must mean it has greater potential than most analysts believe.
Essentially, economic planning and implementation of Third Industrial Revolution technologies will rely on the 5 pillars, but that alone is insufficient. The major challenge this revolution faces lies within public consciousness. In his speech at the World Forum in Lille, 2012, Rifkin stated, “We have to shift consciousness, fast, quick, in one generation. We have to move from geopolitics in Copenhagen, climate change, to the biosphere politics of the 21st century. We have to think as a human species; we have to think of fellow creatures as part of our family; we have to think of the biosphere as our indivisible community.”
He continues to explain that scientists’ research indicate a situation far worse than implied in Al Gore’s An Inconvenient Truth. “We’ve got to get on page with the plan. We’re running down, we have almost no years left to change. We can’t make any mistakes and we have to be mindful for three generations or we don’t have a chance. We need biosphere consciousness.” We must help spread awareness on the topic! Demand your politicians to speak about it. The Revolution is coming and we must be prepared!
Now there. Hopefully, this article successfully conveys the future of capitalism and the major changes that will occur in the next 25 years. It’s an exciting topic that I think would interest most people if only they knew about it. If you made it this far, I assume you’re interested in change. So please, share this article with friends who might enjoy the concept, and leave your comments and questions below. My only hope is that Artificial Intelligence doesn’t have a little revolution of its own in the near future, or Stephen Hawking and Elon Musk’s predictions may come true, Terminator-style. Otherwise, the Third Industrial Revolution will soon utilize new technologies and prove beneficial for everyone!
Jesper Nicholas Mount
Reading List:
Internet of Things Infographics
Michael Bauwens: Beyond Jeremy Rifking
Uber and the Zero Marginal Cost Revolution
Business Today: Smart Cities & IoT
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