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The Third Industrial Revolution

Jeremy Rifkin

President and founder of the Foundation on Economic Trends

The Second Industrial Revolution, powered by oil and other fossil fuels, is spiraling into a dangerous endgame: the prices of energy and food are climbing, unemployment remains high, consumer and government debt are soaring, and the recovery is slowing. Worse, climate change from fossil-fuelbased industrial activity is threatening the viability of life on Earth. Facing the prospect of a second collapse of the global economy, humanity is desperate for a new economic vision and sustainable economic development plan. Finding it requires understanding the technological forces that precipitate the profound transformations in society.

History’s great economic revolutions occur when new communication technologies converge with new energy systems. New energy revolutions make possible more expansive and integrated trade. Accompanying communication revolutions manage the new complex commercial activities made possible by the new energy flows. In the 19th century, cheap steam powered print technology and the introduction of public schools gave rise to a print-literate work force with the communication skills to manage the increased flow of commercial activity made possible by coal and steam power technology, ushering in the First Industrial Revolution. In the 20th century, centralized electricity communication — the telephone, and later radio and television — became the medium to manage a more complex and dispersed oil, auto, and suburban era, and the mass consumer culture of the Second Industrial Revolution.

As I describe in my book The Third Industrial Revolution, How Lateral Power is Transforming Energy, the Economy, and the World, internet technology and renewable energies are now about to merge to create a powerful new infrastructure for a Third Industrial Revolution that will change the world in the 21st century. In the coming era, hundreds of millions of people will produce their own green energy in their homes, offices, and factories and share it with each other in an “energy Internet”, just as we now generate and share information online. The creation of a renewable energy regime — loaded by buildings, partially stored in the form of hydrogen, distributed via an energy Internet, and connected to plug-in zeroemission transport — establishes a five-pillar infrastructure that will spawn thousands of businesses and millions of sustainable jobs.

The entire system is interactive, integrated, and seamless. When these five pillars come together, they make up an indivisible technological platform that can transform every country.

Nations will need to invest in renewable energy technology on a massive scale; convert millions of buildings into green micro-power plants; embed hydrogen and other storage technology throughout the infrastructure; lay down a green electricity Internet; and transform the automobile from the internal combustion engine to electric plug-in and fuel cell propulsion.

The remaking of each nation’s infrastructure and the retooling of industries is going to require massive retraining of workers on a scale matching the vocational and professional training at the onset of the First and Second Industrial Revolutions. The new high-tech workforce of the Third Industrial Revolution will need to be skilled in renewable energy technologies, green construction, IT and embedded computing, nanotechnology, sustainable chemistry, fuel-cell development, digital power grid management, hybrid electric and hydrogenpowered transport and hundreds of other technical fields.

Democratizing energy will bring with it a fundamental reordering of human relationships, impacting the very way we conduct business, govern society, educate our children, and engage in civic life. The music companies didn’t understand distributed power until millions of young people began sharing music online, and corporate revenues tumbled in less than a decade. Encyclopedia Britannica did not appreciate the distributed and collaborative power that made Wikipedia the leading reference source in the world. Nor did the newspapers take seriously the distributed power of the blogosphere; now many publications are either going out of business or transferring much of their activities online. The implications of people sharing distributed energy in an open commons are even more far-reaching. To appreciate how disruptive is the Third Industrial Revolution to the existing way we organize economic life, consider the far-reaching changes that have taken place in just the past 23 years through the Internet revolution. Democratizing information and communication has altered the very nature of global commerce and social relations as significantly as the print revolution in the early modern era. Imagine the impact that democratizing energy across all of society is likely to have when managed by Internet technology. The Third Industrial Revolution changes the very concept of power relationships in society. The traditional notion of centralized, top-down power, is giving way to lateral power, with far reaching consequences.

The Third Industrial Revolution build-out is particularly relevant for the poorer countries in the developing world. Forty per cent of the human race stills lives on two dollars a day or less, in dire poverty. Most of these people have no electricity, without which they remain “powerless”, literally and figuratively. The single most important factor in raising hundreds of millions of people out of poverty is having reliable and affordable green electricity. All other economic development is impossible in its absence. Universal access to electricity is the indispensable starting point for improving the lives of the poorest populations of the world.

Because renewable energy — solar, wind, geothermal, hydro and biomass — is widely distributed, a Third Industrial Revolution is likely to take off quickly in the developing world. Although a lack of infrastructure is often viewed as impeding development, we are actually finding that many developing nations can potentially “leapfrog” into a Third Industrial Revolution because they are not saddled with an aging electricity grid. By building a new, distributed electricity system from scratch, rather than continuing to patch up an old and outworn grid, developing countries significantly reduce the time and expense in transitioning into a new energy era. And the distributed nature of the Third Industrial Revolution infrastructure allows risk to be more widely diffused, with localities and regions pooling resources to establish local grid networks, and then connecting with other nodes. This is the very essence of lateral power.

The Third Industrial Revolution offers the hope that we can arrive at a sustainable post-carbon era by mid-century. We have the science, the technology, and the game plan to make it happen. The question is whether we will recognize the economic possibilities that lie ahead and muster the will to get there in time.

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