Jeremy Rifkin's Third Industrial Revolution

Forbes has an interview with Jeremy Rifkin about his vision of the future - Jeremy Rifkin's Third Industrial Revolution.

How did you come up with this idea?

My read on history is that the great economic revolutions occur when two phenomena come together. When we change energy regimes, it makes possible much more complex economic relations. When energy revolutions occur, however, they require communication revolutions that are agile enough to manage them. If you look at the 19th century, print technology became very cheap when we introduced steam power into printing. That decreased the cost and increased the speed, efficiency and availability of print material. At the same time we established public schools in Europe and America. We created a print literate workforce with the communication skills to organize a First Industrial Revolution driven by coal and steam power.

Then we did it again in the 20th century with the convergence of communication and energy: Centralized electricity—especially the telephone and then later radio and television—became the communication vehicles to manage a more dispersed Second Industrial Revolution, organized around the oil-powered internal combustion engine, suburban construction and the creation of a mass consumer society.

Energy historians only deal with energy, and communication historians only deal with communications, but in history you can’t really do one without the other. That’s the framework that led me to this kind of search, and the Third Industrial Revolution really came out of that narrative on how history evolves.

So, what exactly is the Third Industrial Revolution?

First of all, it’s based on a new convergence of communication and energy. The Internet has been a very powerful communication tool in the last 20 years. What’s so interesting about it is the way it scales. I grew up in the 20th century on centralized electricity communication that scales vertically. The Internet, by contrast, is a distributed and collaborative communication medium and scales laterally.

We are in the early stages of a convergence of Internet communication technology with a new form of energy that is by nature distributed and has to be managed collaboratively and scales laterally. We’re making a great transition to distributed renewable energy sources. And we distinguish those from the elite energies—coal, oil, gas, tar sands—that are only found in a few places and require significant military and geopolitical investments and massive finance capital, and that have to scale top down because they are so expensive. Those energies are clearly sunsetting as we enter the long endgame of the Second Industrial Revolution.

Distributed energies, by contrast, are found in some frequency or proportion in every inch of the world: the sun, the wind, the geothermal heat under the ground, biomass—garbage, agricultural and forest waste—small hydro, ocean tides and waves. ...

You speak of “we.” How are you doing this?

I chair a group of more than 100 companies—many of whom are the main players in the renewable energy industry, the construction industry, urban planning and architecture, IT, and global logistics and transport—that comprise the Third Industrial Revolution Global CEO Business Roundtable. We use a similar organizational model to the one used in the film industry. Everyone has their own expertise. We come together to help political jurisdictions, the local business community and civil society create a Third Industrial Revolution narrative and game plan—analogous to a script—that can help them transition their economies into the new economic era.

The Third Industrial Revolution Global CEO Business Roundtable is the outgrowth of the dramatic changes that have taken place in the recent past. We’ve had two events in the last three years that signal the beginning of the endgame for the Industrial Revolution based on fossil fuels. The first one was July 2008 when oil hit $147 a barrel and the costs of all the goods and services across the global supply chain went through the roof, purchasing power plummeted, and the entire global economy ground to a halt. That was the great economic earthquake that signaled the beginning of the endgame for an Industrial Revolution based on fossil fuels. The financial collapse 60 days later was the aftershock.

We’ve hit peak globalization in how far we can actually globalize the economy based on elite fossil fuels. Every time we try to re-grow the economy at the same growth rate we were experiencing before July 2008, oil prices will rise and the prices of all other goods and services will climb as well because all the economic activity of our global economy depends on fossil fuels. We grow our food in petrochemical fertilizers and pesticides. Most of our construction materials and the vast majority of our pharmaceutical products are made of fossil fuels as well as our packaging materials and clothes. Our power, heat, light and transport are also reliant on fossil fuels. The price of virtually every good and service in today’s global economy is dependent on the price of oil. That is why we are likely looking at four-year cycles of growth and collapse. Each time we try to restart the engine by replenishing inventories, oil prices will climb back up, all the other prices for goods and services will spike along with the price of oil, and at around $150 a barrel, purchasing power will plunge and the economy will shut down. That’s exactly what is happening now as we head to a second collapse of the global economy.

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Merkel Won’t Let Euro Split, May Cause Dark Age, Rifkin Says

Bloomberg has an interesting angle on the European debt fiasco - if only Jeremy Rifkin would give up the hydrogen thing and focus on more practical energy solutions - Merkel Won’t Let Euro Split, May Cause Dark Age, Rifkin Says.

Angela Merkel won’t allow the euro region to split because she understands that could cause “a dark age" by wrecking the bloc’s energy markets as oil supplies dwindle, said an adviser to the German chancellor.

Europe’s 500 million residents, the wealthiest market on Earth, have led the development of technologies in clean energy, transport and communications that can drive global growth that doesn’t rely on oil, said Jeremy Rifkin, a Wharton Business School professor who has advised Merkel for six years.

“I hope they pull this off, there’s no one else," he said yesterday in Madrid of Merkel’s struggle to boost growth as part of Europe’s rescue strategy and preserve the single currency area. “If it splits up, we’re into a dark age."

Rifkin argues that record oil prices in 2008 pushing up the costs of everything from food to clothing rather than the collapse of Lehman Brothers Holdings Inc. was the main cause of the financial crisis. The global economy won’t return to its pre-crisis growth until it moves away from fossil fuels because rising oil prices will continually hold down expansion, he said.

The global economy sputtered again this year after oil prices surged. The European Central Bank started buying Italian and Spanish government bonds to control the sovereign debt crisis on Aug. 8, three months after oil prices reached their highest since 2008. Stock markets slumped this summer, with the S&P 500 losing 17 percent from July 22 to Aug. 8.

Germany’s deployment of renewable energy, intelligent power grids and electric vehicles leaves it best-placed to lead the world economy beyond its reliance on fossil fuels, Rifkin said. His vision involves creating an “energy Internet."

The EU has led the global battle to limit the greenhouse gas emissions that scientists say are almost certainly the cause of global warming, establishing the world’s biggest market for carbon-dioxide emission permits in 2005. That infrastructure, as well as the bloc’s targets for transforming its energy networks over the next 30 years, would likely be wrecked if the single currency area split, Rifkin said …

Global crude output likely peaked in 2006, the International Energy Agency says. Oil companies will have to spend trillions of dollars drilling in increasingly hostile environments such as deep waters in the Gulf of Mexico or the Arctic to meet demand, it said in its 2011 World Energy Outlook.

Rifkin, in the Spanish capital to speak today at a Rafael del Pino Foundation conference, has advised Merkel, French Premier Nicolas Sarkozy and Spain’s Jose Luis Rodriguez Zapatero that the global economy’s fundamental problem stems from the end of a growth model based on fossil fuels.

Sustainable expansion will only return when officials and executives can produce “the third industrial revolution," the University of Pennsylvania’s Wharton School professor argues in a book of the same title due to be published next month.

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The Third Industrial Revolution: Toward A New Economic Paradigm

The Huffington Post has an excerpt from Jeremy Rifkin's new book - The Third Industrial Revolution: Toward A New Economic Paradigm.

n the mid-1990s, it dawned on me that a new convergence of communication and energy was in the offing. Internet technology and renewable energies were about to merge to create a powerful new infrastructure for a Third Industrial Revolution (TIR) that would change the world. 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 like we now create and share information online. The democratization of 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.

I introduced the Third Industrial Revolution vision at the Wharton School's Advanced Management Program (AMP), at the University of Pennsylvania, where I have been a senior lecturer for the past sixteen years on new trends in science, technology, the economy, and society. The five-week program exposes CEOs and business executives from around the world to the emerging issues and challenges they will face in the 21st century. The idea soon found its way into corporate suites and became part of the political lexicon among heads of state in the European Union.

By the year 2000, the European Union was aggressively pursuing policies to significantly reduce its carbon footprint and transition into a sustainable economic era. Europeans were readying targets and benchmarks, resetting research and development priorities, and putting into place codes, regulations, and standards for a new economic journey. By contrast, America was preoccupied with the newest gizmos and "killer apps" coming out of Silicon Valley, and homeowners were flush with excitement over a bullish real estate market pumped up by subprime mortgages.

Few Americans were interested in sobering peak oil forecasts, dire climate change warnings, and the growing signs that beneath the surface, our economy was not well. There was an air of contentment, even complacency, across the country, confirming once again the belief that our good fortune demonstrated our superiority over other nations.

Feeling a little like an outsider in my own country, I chose to ignore Horace Greeley's sage advice to every malcontent in 1850 to "Go West, young man, go West," and decided to travel in the opposite direction, across the ocean to old Europe, where new ideas about the future prospects of the human race were being seriously entertained.

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