Jeremy Rifkin, founder and president of the Foundation on Economic Trends, is one of the world’s leading authorities on economic sustainability. In this thought-provoking five-part series, he explains how we are already transitioning into a post-carbon era and on the verge of creating a sustainable economic paradigm that will usher in the Collaborative Age.
The Third Industrial Revolution will be the last of the great Industrial Revolutions and will lay the foundational infrastructure for an emerging collaborative age. Its completion will signal the end of a two-hundred-year commercial saga characterized by industrious thinking, entrepreneurial markets, and mass labor workforces and the beginning of a new era marked by collaborative behavior, social networks and professional and technical workforces.
In the coming half century, the conventional, centralized business operations of the First and Second Industrial Revolutions will increasingly be subsumed by the distributed business practices of the Third Industrial Revolution; and the traditional, hierarchical organization of economic and political power will give way to lateral power organized nodally across society.
The extraordinary capital costs of owning and operating giant centralized telephone, radio, and television communications technology and fossil fuel and nuclear power plants in markets is giving way to the new “distributed capitalism,” in which the low entry costs in lateral networks make it possible for virtually everyone to become a potential entrepreneur and collaborator, creating and sharing information and energy in open commons. Witness twenty-something young men creating Google, Facebook, and other global information networks, literally in their college dorm rooms, and thousands of small businesses converting their buildings to green micro-power plants and connecting with one another in regional electricity networks.
The shrinking of transaction costs in the music business and publishing field with the emergence of file sharing of music, eBooks, and news blogs, is wreaking havoc on these traditional industries. We can expect similar disruptive impacts as the diminishing transaction costs of green energy allow manufacturers, service industries, and retailers to produce and share goods and services in vast economic networks with very little outlay of financial capital.
For example, consider manufacturing. Nothing is more suggestive of the industrial way of life than highly capitalized, giant, centralized factories equipped with heavy machines and attended by a blue-collar workforce, churning out mass-produced products on assembly lines. But what if millions of people could manufacture batches or even single manufactured items in their own homes or businesses, cheaper, quicker, and with the same quality control as the most advanced state-of the-art factories on earth?
While the Third Industrial Revolution economy allows millions of people to produce their own virtual information and energy, a new digital manufacturing revolution now opens up the possibility of following suit in the production of durable goods. In the new era, everyone can potentially be their own manufacturer as well as their own internet site and power company. The process is called 3-D printing; and although it sounds like science fiction, it is already coming online, and promises to change the entire way we think of industrial production.
Think about pushing the print button on your computer and sending a digital file to an inkjet printer, except, with 3-D printing, the machine runs off a three-dimensional product. Using computer-aided design, software directs the 3-D printer to build successive layers of the product using powder, molten plastic, or metals to create the material scaffolding. The 3-D printer can produce multiple copies just like a photocopy machine. All sorts of goods, from jewelry to mobile phones, auto and aircraft parts, medical implants, and batteries are being “printed out” in what is being termed “additive manufacturing,” distinguishing it from the “subtractive manufacturing,” which involves cutting down and pairing off materials and then attaching them together.
3-D entrepreneurs are particularly bullish about additive manufacturing, because the process requires as little as 10 percent of the raw material expended in traditional manufacturing and uses less energy than conventional factory production, thus greatly reducing the cost.
In the same way that the Internet radically reduced entry costs in generating and disseminating information, giving rise to new businesses like Google and Facebook, additive manufacturing has the potential to greatly reduce the cost of producing hard goods, making entry costs sufficiently lower to encourage hundreds of thousands of mini manufacturers—small and medium size enterprises—to challenge and potentially outcompete the giant manufacturing companies that were at the center of the First and Second Industrial Revolution economies.
Already, a spate of new start-up companies are entering the 3-D printing market and are determined to reinvent the very idea of manufacturing in the Third Industrial era.
The energy saved at every step of the digital manufacturing process, from reduction in materials used, to less energy expended in making the product, when applied across the global economy, adds up to a qualitative increase in energy efficiency beyond anything imaginable in the First and Second Industrial Revolutions. When the energy used to power the production process is renewable and also generated on site, the full impact of a lateral Third Industrial Revolution becomes strikingly apparent.
Since approximately 84 percent of the productivity gains in the manufacturing and service industries are attributable to increases in thermo-dynamic efficiencies—only 14 percent of productivity gains are the result of capital invested per worker—we begin to grasp the significance of the enormous surge in productivity that will accompany the Third Industrial Revolution and what it will mean for society.
To read more from this five-part series, continue to A Sustainable Economic Future: Part 4: Marketing in the 21st Century.
The Third Industrial Revolution: A 5-Part Series on a Sustainable Economic Future
© 2013 Omega Institute for Holistic Studies