A New Economic Narrative
Jeremy Rifkin, founder and president of the Foundation on Economic Trends, is one of the world’s leading authorities on economic sustainability. Here he explains how our society is transitioning into a Third Industrial Revolution to create a new economic paradigm that can transform the world. Join Jeremy Rifkin at the Where We Go From Here Conference in October.
Our industrial civilization is at a crossroads. Oil and the other fossil fuel energies that make up the industrial way of life are at their end, and the technologies made from and propelled by these energies are antiquated. The entire industrial infrastructure developed from fossil fuels is aging and in disrepair. The result is that unemployment is rising to dangerous levels all over the world. Governments, businesses, and consumers are awash in debt and living standards are declining everywhere. A record one billion human beings—nearly one seventh of the population—face hunger and starvation. Worse, climate change from fossil fuel-based industrial activity looms on the horizon, imperiling our own species’ ability to survive.
Since the beginning of the Great Recession in the summer of 2008, governments, the business community, and civil society have been embroiled in a fierce debate over how to restart the global economy. While austerity measures and fiscal, labor, and market reforms will all be necessary, they are not sufficient to re-grow the economy. Let me explain by way of an anecdote.
Just months after arriving in office, the new chancellor of Germany, Angela Merkel, asked me to come to Berlin to help her administration address the question of how to create new jobs and grow the German economy in the 21st century. I began my remarks by asking the chancellor, “How do you grow the German economy, the EU economy, or, for that matter, the global economy, in the last stages of a great energy era and an industrial revolution built on it?”
The New Economic Paradigm
It is becoming increasingly clear that the Second Industrial Revolution is dying and that industrially induced CO2 emissions are threatening the viability of life on Earth. What we need now is a bold new economic narrative that can take us into a sustainable post-carbon future. Finding that new vision requires an understanding of the technological forces that precipitate profound transformations in our society.
The great economic revolutions in history 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 complex new commercial activities made possible by the new energy flows. Ushering in the First Industrial Revolution during 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 (which was made possible by coal and steam power technology).
In the 20th century, centralized and electrical forms of communication—the telephone, and later radio and television—became the communication medium to manage an even more complex and dispersed oil, auto, and suburban era, and the mass consumer culture of the Second Industrial Revolution.
Today, Internet technology and renewable energies are beginning to merge to create a new infrastructure for a Third Industrial Revolution that will change the way power is distributed in the 21st century. In the coming era, hundreds of millions of people will produce their own renewable energy in their homes, offices, and factories and share green electricity with each other in an “energy internet,” just as we now generate and share information online.
The Third Industrial Revolution
The establishment of a Third Industrial Revolution infrastructure will create thousands of new businesses and millions of jobs and will lay the basis for a sustainable global economy in the 21st century.
However, let me add a cautionary note. Like every other communication and energy infrastructure in history, the various pillars of a Third Industrial Revolution must be laid down simultaneously or the foundation will not hold. That’s because each pillar can only function in relationship to the others.
The five pillars of the Third Industrial Revolution are:
1. Shifting to renewable energy
2. Transforming the building stock of every continent into micropower plants to collect renewable energies on-site
3. Deploying hydrogen and other storage technologies in every building and throughout the infrastructure to store intermittent energies
4. Using Internet technology to transform the power grid of every continent into an energy internet that acts just like the Internet (when millions of buildings are generating a small amount of renewable energy locally, on-site, they can sell surplus green electricity back to the grid and share it with their continental neighbors)
5. Transitioning the transport fleet to electric plug-in and fuel cell vehicles that can buy and sell green electricity on a smart, continental, interactive power grid
The creation of a renewable energy regime, loaded by buildings, partially stored in the form of hydrogen, distributed via a green electricity internet, and connected to plug-in, zero-emission transport, opens the door to a Third Industrial Revolution. The entire system is interactive, integrated, and seamless.
The public and private financing of the Third Industrial Revolution infrastructure build-out across the world will be at the very top of the agenda for the international banking and financial community in the first half of the 21st century.
When the five pillars of the Third Industrial Revolution come together, they make up an indivisible technological platform—an emergent system whose properties and functions are qualitatively different from the sum of its parts. In other words, the synergies between the pillars create a new economic paradigm that can transform the world.