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The Third Industrial Revolution
The Third Industrial Revolution
By Jeremy Rifkin
O
ur industrial civilization is at a governments, the business community, tion technologies converge with new
crossroads. Oil and the other and civil society have been embroiled energy systems. New energy revolutions
fossil fuel energies that make in a fierce debate over how to restart make possible more expansive and inte-
up the industrial way of life are sunset- the global economy. While austerity grated trade. Accompanying commu-
ting, and the technologies made from measures and fiscal, labor, and market nication revolutions manage the new
and propelled by these energies are anti- reforms will all be necessary, they are complex commercial activities made
quated. The entire industrial infrastruc- not sufficient to re-grow the economy. possible by the new energy flows. In
ture built off of fossil fuels is aging and Let me explain by way of an anecdote. the 19th century, cheap steam powered
in disrepair. The result is that unem- Just months after arriving in office, the print technology and the introduction
ployment is rising to dangerous levels new Chancellor of Germany, Angela of public schools gave rise to a print-lit-
all over the world. Governments, busi- Merkel, asked me to come to Berlin to erate work force with the communica-
nesses and consumers are awash in debt help her administration address the ques- tion skills to manage the increased flow
and living standards are declining ev- tion of how to create new jobs and grow of commercial activity made possible by
erywhere. A record one billion human the German economy in the twenty- coal and steam power technology, usher-
beings — nearly one seventh of the first century. I began my remarks by ing in the First Industrial Revolution. In
human race—face hunger and starva- asking the chancellor, “How do you the 20th century, centralized electricity
tion. Worse, climate change from fossil
fuel-based industrial activity looms on
the horizon, imperiling our own species’ It is becoming clear that the Second Industrial Revolution
very ability to survive. is dying. What we need now is a bold new economic narra-
Since the beginning of the Great tive that can take us into a sustainable post carbon future.
Recession in the summer of 2008,
change the distribution of economic The emerging Third Industrial and publishing field with the emergence
power in the twenty-first century, it is Revolution, by contrast, is organized of file sharing of music, eBooks, and
helpful to step back and examine how around distributed renewable energies news blogs, is wreaking havoc on these
the fossil fuel–based First and Second that are found everywhere and are, for traditional industries. We can expect
Industrial Revolutions reordered power the most part, free—sun, wind, hydro, similar disruptive impacts as the dimin-
relations over the course of the nine- geothermal heat, biomass, and ocean ishing transaction costs of green energy
teenth and twentieth centuries. waves and tides. These dispersed ener- allow manufacturers, service indus-
Fossil fuels—coal, oil, and natural gies will be collected at millions of local tries, and retailers to produce and share
gas—are elite energies for the simple sites and then bundled and shared with goods and services in vast economic
reason that they are found only in select others over a continental green electric- networks with very little outlay of fi-
places. They require a significant mil- ity internet to achieve optimum energy nancial capital.
itary investment to secure their access levels and maintain a high-performing,
and continual geopolitical management sustainable economy. The distributed Democratizing Manufacturing
to assure their availability. They also nature of renewable energies necessi- For example, consider manufacturing.
require top down command and control tates collaborative rather than hierarchi- Nothing is more suggestive of the indus-
systems and massive concentrations of cal command and control mechanisms. trial way of life than highly capitalized,
capital to move them from underground This new lateral energy regime estab- giant, centralized factories equipped
to the end users. The ability to central- lishes the organizational model for the with heavy machines and attended by
ize production and distribution— the countless economic activities that mul- blue-collar workforces, churning out
essence of modern capitalism— is crit- tiply from it. A more distributed and mass-produced products on assembly
ical to the effective performance of collaborative industrial revolution, in lines. But what if millions of people
the system as a whole. The centralized turn, invariably leads to a more distrib- could manufacture batches or even
energy infrastructure, in turn, sets the uted sharing of the wealth generated. single manufactured items in their own
conditions for the rest of the economy, The extraordinary capital costs of homes or businesses, cheaper, quicker,
encouraging similar business models owning and operating giant centralized and with the same quality control as the
across every sector. telephone, radio, and television com- most advanced state-of the-art factories
Virtually all of the other critical in- munications technology and fossil fuel on earth?
dustries that emerged from the oil cul- and nuclear power plants in markets is While the TIR economy allows mil-
ture—modern finance, telecommunica- giving way to the new “distributed cap- lions of people to produce their own
tions, automotive, power and utilities, italism,” in which the low entry costs virtual information and energy, a new
and commercial construction—and that in lateral networks make it possible for digital manufacturing revolution now
feed off of the fossil fuel spigot were virtually everyone to become a potential opens up the possibility of following suit
similarly predisposed to bigness in order entrepreneur and collaborator, creating in the production of durable goods. In
to achieve their own economies of scale. and sharing information and energy in the new era, everyone can potentially be
And, like the oil industry, they require open commons. Witness twenty some- their own manufacturer as well as their
huge sums of capital to operate and are thing young men creating Google, own internet site and power company.
organized in a centralized fashion. Facebook, and other global informa- The process is called 3-D printing; and
Three of the four largest compa- tion networks, literally in their college although it sounds like science fiction,
nies in the world today are oil compa- dorm rooms and thousands of small it is already coming online, and prom-
nies—Royal Dutch Shell, Exxon Mobil, businesses converting their buildings to ises to change the entire way we think
and BP. Underneath these giant energy green micro power plants and connect- of industrial production. Think about
companies are some five hundred global ing with one another in regional elec- pushing the print button on your com-
companies representing every sector tricity networks. puter and sending a digital file to an
and industry—with a combined revenue What I am describing is a fundamen- inkjet printer, except, with 3-D print-
of $22.5 trillion, which is the equivalent tal change in the way capitalism func- ing, the machine runs off a three-di-
of one-third of the world’s $62 trillion tions that is now unfolding across the mensional product. Using computer
GDP—that are inseparably connected economy and reshaping how compa- aided design, software directs the 3-D
to and dependent on fossil fuels for their nies conduct business. The shrinking of printer to build successive layers of the
very survival. transaction costs in the music business product using powder, molten plastic, or