First, the bad news: GDP is slowing all over the world because productivity has been in decline for two decades. The result has been higher unemployment (especially among young people) and economists talking about 20 more years of slow growth. According to new numbers from Oxfam, just eight people are as rich as half the globe. In addition to this unprecedented inequality, we face climate change that’s taken us into the sixth extinction wave in the history of the planet, and the last time that happened was 65 million years ago. To turn things around before it’s too late, we need a plan that’s both compelling and doable. Economic theorist Jeremy Rifkin thinks he has just that plan: creating what he calls the third industrial revolution, which will be sparked by harnessing renewable energy and enabling automation and the internet of things to result in a prosperous new economy powered by clean energy.
The good news is that people are listening. On February 7, the European Union unveiled its “Smart Europe” plan influenced by Rifkin’s work, which outlines how the 350 regions of Europe will start building out the road maps to transition into a new infrastructure of 5G internet, renewable energy, and automated driverless transport internet, all riding on top of an internet of things platform. Regions in the north of France, Luxembourg, and the Netherlands have already begun their transition over the last few years. There’s a similar plan taking place in China: After Premier Li Keqiang read Rifkin’s seminal book, The Third Industrial Revolution, he made Rifkin’s strategies core to the country’s 13th Five-Year plan that was announced last March, and includes billions in renewable energy investment by 2020.
THE REVOLUTION WILL BE TELEVISED
While his plans are in the works in Europe and Asia, The Third Industrial Revolution, a new film about Rifkin and his work, that recently premiered at the Tribeca Film Festival, aims to explain his framework for a plan for the U.S. While President Trump and Republican and Democratic lawmakers have made some attempts toward putting together a massive $1 trillion infrastructure plan, any details remain murky. Rifkin wants a plan that instead would take power from the bickering tug-of-war of federal politics, and give it to the people, businesses, and local officials who can affect change on the ground.
The film (a Vice production) is based around the theories Rifkin presented in his book of the same name, and two other of his books, The Empathic Civilization (2009) and Zero Marginal Cost Society (2014). The film explores the challenges of climate change and globalization, the opportunities created by the rise of the internet and automation, and how governments and corporations should be preparing for–and working to build–a society and economy driven by sustainable innovation, and powered by renewable and distributed energy. “I think the green shoots are coming up everywhere; we’re seeing telltale signs of what’s in the film,” Rifkin tells Fast Company. “My hope is if people see the film it will make sense to them because it’s already on the tip of their tongue. They know all the sentences, they just hadn’t put the chapters together. Then it just makes sense. And once that happens, they never go back. I think a lot of people are right there.”
The doc takes place in an empty Brooklyn warehouse. It’s a version of speeches Rifkin has been giving around the world, told over two hours in An Inconvenient Truth-style, lo-fi lecture. Rifkin is in his 70s, and looks a bit like if the Monopoly Man was a college professor. In addition to being a best-selling author, he’s also a senior lecturer at the Wharton School’s Executive Education Program, and president of the Foundation on Economic Trends in Washington, D.C. In the film, as in person, he comes across as friendly and down-to-earth, able to outline and articulate complex problems and proposed solutions in a way that makes you feel like you’re just having a beer with a favorite uncle, and just happen to be chatting about the link between global economics and climate change.
While in Europe and China, Rifkin has spent years consulting with top government officials, but this new film with Vice represents a starkly different approach for U.S. audiences. Rifkin sees the real potential for change and influence in American business and local community leaders. So the documentary will be his calling card, a TLDR version of his books, to screen for everyone from CEOs to university students, to quickly get people excited and motivated to help boost the economy and save the planet. Could it possibly work?
COMMUNICATION, TRANSPORTATION, ENERGY
There have been, according to Rifkin, at least seven major economic paradigm shifts in history, and they all share a common denominator–at a moment in time, three defining technologies emerge and then converge to create an infrastructure that fundamentally changes how we manage, power, and move economic activity across the value chains. First, new communication technology more efficiently manages economic activity. Second, new sources of energy more efficiently power economic activity. And third, new transportation and logistics more efficiently move economic activity.
The first industrial revolution was led in Britain by steam-powered printing, which converged with cheap coal, then the steam engine to move the coal. The second industrial revolution kicked off in the U.S. when centralized communication was introduced by the telephone (later came radio and TV). When the telephone converged with cheap Texas oil, powered by the combustion engine, and the automobile and interstate highways, it created the advancements of the 20th century.
Today, Rifkin says the new paradigm is the convergence of a digital communication internet, a digital renewable energy internet, and a digital automated transportation and logistics internet, to create a super-internet of things infrastructure. The first aspect is already well underway and sitting in your pocket right now in the form of your smartphone. But the second and third elements–a decentralized renewable energy power structure and an automated transportation infrastructure–are still in their infancy.
Rifkin sees decades of potential employment growth in getting them up to speed. If all the buildings in a city must be outfitted with solar panels to collect and then store power, it will take humans to retrofit our cities. Automated transportation still needs humans to organize, analyze, and implement the information collected along our highways.
The end result? Decentralized power grids that know your family’s energy consumption habits, in cities and towns that generate and store much of their own power at zero marginal cost through wind, solar, and geothermal sources, sending excess back to the grid for wider distribution. Smart, driverless transportation, where the cars come pick you up and drop you off at your destination. Transport trucks efficiently crisscross the country, while collecting and distributing data on everything from road conditions to weather patterns. Free high-speed Wi-Fi everywhere you go. Big business and SMEs operating on an even playing field market thanks to smart, efficient manufacturing technology, and the sharing economy. More efficient and equal power, transportation, and business that simultaneously work to minimize or reverse the cause and effects of climate change. But first, we have to build it.
RUST BELT ON THE RISE
For a peek into the potential future, we need look no further than northern France. The Hauts-de-France region is the country’s former rust belt, with its steel and auto factories, and this is an area that’s gone through a decline, much like similar areas in the U.S. It’s the third largest region in France. Political and business leaders began working with Rifkin in 2012, and now the region is buzzing with about 970 different projects deployed in setting up its own third industrial revolution future.
If this were a railway, Hauts-de-France is in the laying tracks phase, with calls for new projects as others around intelligent power networks and smart mobility get underway. According to a 2016 report, innovative small and medium smart-energy enterprises, as well as new research and development laboratories, are now based in the region, with 11,000 new jobs being created in the energy sector, which at the time counted 16,582 employees representing 7% of the region’s industry sector. The third industrial revolution organizing committees in the region, CCI Nord du France and REV3, have partnered with the University of Lille to fund and support projects and research around sustainable transport to reduce critical overcrowding of transit networks in Lille. To date, more than $545 million per year has already been invested in third industrial revolution-related businesses, projects, and research.
The region’s vice-president, Philippe Rapeneau, says that collaborative approach, with business and government creating a plan together, is perhaps the most significant development. “There are many technical challenges, but the best is the way political and economic domains have been working together,” Rapeneau tells Fast Company. “For us, it’s important to see how we’ve created a new form of governance, where the political and the economic domains work together with the same vision, and pull in the same direction.”
Similar programs have been underway in both Luxembourg, and the Metropolitan Region of Rotterdam and the Hague in the Netherlands. Rotterdam Mayor Ahmed Aboutaleb met Rifkin in 2014, and began talking to officials in France about their progress. He was convinced a third industrial revolution-type framework could help his region as well.
“We started the process with working groups on all themes and economic sectors, consisting of representatives from the authorities and regional business and knowledge communities,” writes Aboutaleb in an email. “The result of their public-private collaboration found its way into the (plan’s) framework, uniting all different interests and ambitions, and creating co-ownership for everyone.”
That collaborative process resulted in a 534-page plan unveiled last November, that lays out concrete goals and objectives for the Metropolitan Region of Rotterdam and the Hague to transform its economy and become a zero carbon metro region. Far from a bureaucratic edict, to create this road map, which aims to navigate a 40-year build out and scale up, the 23 municipalities of the region ceded their traditional role as a centralized manager to become more of a lateral facilitator for regional stakeholders–business, society groups, local government, academia–working together as equal partners.
Luxembourg’s Deputy Prime Minister and Minister of the Economy Etienne Schneider sees his country as the ideal life-size laboratory to test Rifkin’s ideas on a national scale. He cites the country’s ability to reinvent itself over the last century, first from an agricultural country to an industrial nation, mainly relying on the steel industry. In the ’70s and ’80s, the country attracted global corporations like DuPont and Goodyear, and began to establish itself as a major financial center. It too unveiled a strategy plan in November, developed with Rifkin, talking to more than 300 socioeconomic stakeholders across business, government, academia, and civil society groups. It includes aims to refurbish and retrofit buildings and other infrastructure to make them more energy efficient so that a high share of electricity, heat, and cold generated by renewable energy technologies can be installed. Luxembourg has introduced a feed-in tariff to encourage early adopters to transform buildings and property sites into micro-power generation facilities. According to the report, the feed-in tariffs guarantee a premium price above market value for renewable energy generated locally and sent back to the electricity grid.
“By calling on a world-renowned specialist in economic and scientific prospective such as Jeremy Rifkin, we are once again confirming that we are ahead of our times,” writes Schneider in an email. “By embracing his strategic vision, we are positioning the Grand Duchy as a country that wishes to continue, even in a far-distant future, to maintain high standards of living through sustainable economic development. Conceptually, Luxembourg is already deploying the necessary technological infrastructure to apply Rifkin’s vision concretely. The economic sectors we foster are in line with the change in energy sources and the digitalization that are at the heart of Jeremy Rifkin’s thoughts.”
Maros Sefcovic, vice president of the European Commission, heads up Europe’s Energy Union. He first met Rifkin in 2015 and says the examples of Hauts-de-France and Rotterdam are significant because they go beyond theory and offer concrete examples in how high-carbon regions can develop long-term strategies to address climate change at their local and regional levels.
Sefcovic says there is still plenty of work to be done in Europe, but also invites America to pick up its pace in the race for the new global economy. “The clean energy transition does not run counter to economic interest, as some attempt to claim,” says Sefcovic. He says solar energy is now the second largest energy sector employer in the U.S. with 260,000 jobs, with more than 51,000 jobs created in the U.S. solar industry in 2016, an increase of nearly 25% over 2015, and 12 times faster than the rest of the economy. More than the jobs created by the oil and gas extraction and pipeline sectors combined.
“Yet, the highest number of green jobs are currently neither in the EU nor in the U.S.,” says Sefcovic. “They are in China. So either we join the global race to the new economy, or we lose it. This should be a priority. That is why I invite and encourage American business leaders and government officials to join Europe in this quest. The energy transition cannot be stopped. The only question is who will be leading it.”
COMING TO AMERICA
In January, the biggest hit at the North American International Auto Show in Detroit wasn’t a car, but a plan. Ford CEO Mark Fields unveiled his company’s vision for the “City of Tomorrow,” an extension and elaboration on what Bill Ford outlined in a 2011 TED talk. That Ford’s future wasn’t as a car company, but as a mobility company. In a corresponding Medium post, Fields said the company has come a long way over the last year–forming the Ford Smart Mobility LLC, hiring new talent and doubling the company’s presence in Silicon Valley, creating the FordPass app, launching Ford GoBikes in San Francisco, as well as acquiring San Francisco-based Chariot, a private transit service. In December, Ford unveiled its plan for a fully autonomous car by 2021, as well as its plans for electric vehicles over the next decade. Fields is one of the few American CEOs who has already seen the Vice film, and the company’s strategy aligns with Rifkin’s pitch.
For Marcy Klevorn, Ford’s chief information officer, what resonated most with her in The Third Industrial Revolution was how Rifkin describes the inflection point around energy, transportation, and communications. “In our quest to become a mobility and technology company, we’re thinking very seriously about all three of these inflection points, our role in society, mobility trends, what’s going on in cities, and how we can help see these come together to improve people’s lives, which is our mission,” says Klevorn.
Anne Pramagiorre, the CEO of ComEd Chicago and, perhaps surprisingly, a fan of Rifkin’s work, says The Third Industrial Revolution has been required reading for her leadership team for years, and that, as with Ford, Rifkin’s ideas align perfectly with where she sees the future of power utilities. Her company has developed a pilot project with the Illinois Institute of Technology to develop a micro-grid in Chicago’s Bronzeville neighborhood. The project recently took a legislative hit, but is still moving forward. She says Rifkin’s ideas don’t threaten her business, but it does sum up the challenge of future-proofing.
“The way we think about this is we’ve got two parallel paths to walk simultaneously,” says Pramagiorre. “One is running the business for today, as efficiently as possible for our customers and taking care of shareholder investment. At the same time we’re designing the business of the future, and we have to understand we don’t know all the parameters and features that will have, but we do know enough to start to make steps into that new future business. It’s our job to figure that out. If you look at the history of businesses that have gone through digital transformation, you do not succeed by putting a moat around the old business model, and you don’t succeed by not designing your business model to serve what the customer is telling you they want. Customer orientation and a willingness to adapt is the key.”
When Gord Hicks, CEO of Toronto-based real estate management firm Brookfield Global Integrated Solutions, first read The Third Industrial Revolution, he says it was the first time someone was able to articulate to him a really rational, sound approach to driving an economy to be prosperous while improving our ecological footprint. He hosted Rifkin in Toronto for the launch of the Building Energy Innovators Council (BEIC), an industry organization to accelerate the collaboration, innovation, and adoption of clean building technologies across Canada, and which includes Cisco, Philips, Enwave, and the University of Waterloo among its founding partners.
“What we need to do is make sure we get the narrative right so the broader society understands clearly where and why the government is investing in new technology, rather than more old technologies, and why they’re investing in energy efficiency initiatives, like solar and wind,” says Hicks. “In reality, the Acadia Center did a study and found that one dollar in energy efficiency improvement in buildings created $5 to $8 in GDP growth. There’s just this multiplier effect that happens when you make critical investments in certain areas. What ultimately is good for the economy, is good for the environment.”
With major American business leaders supporting his strategic framework–and plenty more companies, mayors, and regions who are pushing Third Industrial Revolution-type ideas without knowing it–Rifkin hopes the film acts as a catalyst to help kick-start discussions that will lead to more collaboration between government and business, as well as between industries.
“This is not entertainment, we see this as a start of a conversation that will lead them to roll up their sleeves and actually deploy economic plans like we’re doing in Europe and China,” says Rifkin. “The green shoots are there. I see it in the news. I hear it from executives. But too often you talk to city leaders and there are too many one-off projects without the paradigm shift. You can have bike lanes or hydrogen buses, but they’re siloed projects that aren’t joined by a digital infrastructure, so they’re not going where they need to go. They think these little projects are it, but it’s the infrastructure that will drive the paradigm shift. That’s what we’re really going to focus on as a counter-narrative to Trump’s plan.”
Rifkin is quick to say that the ideas he outlines in The Third Industrial Revolution film aren’t exclusively his, and, just like his framework, getting it done is going to take a lot of work from a lot of different people. “The narrative isn’t from just me, we just brought together like-minded interests over years and years,” he says. “It didn’t happen overnight, it isn’t a eureka moment. From a business perspective, it’s just the next step in the journey. Can we get there? There is so much that can go wrong, even with ideas whose time has come. I said in the film that we need not only be on mission for three generations, we have to have passion and commitment that sees this as the primary narrative if we’re going to save this planet. But we have to have a little luck along the way.”
If we’re going to spend $1 trillion on infrastructure, hopefully someone talks to Rifkin–or at least watches his new documentary–first.
Read more at: https://www.fastcompany.com/40410329/will-the-third-industrial-revolution-create-an-economic-boom-that-saves-the-planet