electronica 2018 kicked off in Munich on Monday with a keynote by economist Dr. Jeremy Rifkin.
Dr. Rifkin, introduced by Dr. Michael Ziesemer, president of ZVEI, is an economist renowned for his insight on the effect of technology on economic development. He is the founder of the US-based Foundation on Economic Trends, advisor to the EU Commission, and has served as a consultant to world leaders like Angela Merkel on economic development through technology and science.
Upon his introduction to the assembly, Dr. Rifkin immediately forewent the podium on the stage in favor of pacing the aisle between attendees. He also banished photographers to the back, all in hopes of creating a more lecture-hall-esque environment.
Image used courtesy of Irina Gillentine
His hour-long presentation was equal parts assessment of current trends and history lesson, covering previous industrial revolutions and the one that he says we are on the cusp of today.
Identifying Industrial Revolutions
In the simplest terms, Dr. Rifkin believes that we are poised to enter the third industrial revolution of the last 100 years.
There are three elements, he says, that define the previous major industrial revolutions over this timespan, also known as “technologies to change the world”:
- Communication technology
- New energy sources
- Methods of mobility
With this model in mind, he argues that the first industrial revolution of the last century came from the British in the form of:
- Steam-powered printing (communication)
- Cheap coal (energy)
- Stream engines on rail (mobility)
The second revolution came from the USA and included:
- The invention of the telephone (communication)
- Texas oil (energy)
- Henry Ford’s cheap cars (mobility)
The introduction of (relatively) cheap cars was instrumental in what Dr. Rifkin calls the second industrial revolution
It is Dr. Rifkin’s belief that this second revolution carried the world up until 2008 when the oil that kickstarted it peaked.
Key to understanding Dr. Rifkin’s comments is the concept of climate change. On a global level, many European leaders are vocally supportive of initiatives such as reducing carbon emissions and creating more efficient cities. Rifkin believes this necessary before we pass a tipping point where life becomes unsustainable.
To make an eco-friendly industrial revolution, Rifkin says we will need—before 2040—"new economic vision for the world. And it'd better be compelling." The next generation will be pivotal in paying what he terms “the entropy bill” of the last 200 years of growth, i.e., the cost to the climate that came from reliance on fossil fuels.
Rifkin’s concept for this compelling economic vision is, in short, a single platform: the IoT.
"Things" as Distributed Data Centers: The Lateral Network Effect
The IoT as a platform for industrial revolution, Rifkin says, looks like a nodal system that spans across the world and functions like a brain. He calls this the “lateral network effect” where, like many IoT systems, processing is accomplished laterally across multiple nodes.
One important point Rifkin makes here is that he’s talking about the IoT as in the Internet of Things—not the cloud but actual, physical things.
Buildings, in particular (which he cited as the number one contributor to climate change), are key to this concept. Buildings may be retrofitted with IoT capabilities, turning them into nodes in a larger network of distributed data centers.
Using these nodes in “systems on systems” could help aggregate better efficiency through data. This move towards lateral networks necessitates transparent data processing and use, effectively sharing data and processing across nodes.
Access Over Ownership: The Sharing Economy
The sharing economy, according to Rifkin, came as something of a surprise to economists. Based on previous economic models and attitudes, it was not immediately intuitive that modern people would prefer access over ownership.
Stated simply, a sharing economy is one built on the idea that an individual could prefer steady access to a resource rather than owning it outright.
We’ve seen the effects of interconnectivity on newspapers, music, books, etc., that have needed to adapt, often to a subscription model. Now, says Rifkin, this mentality is moving to the IoT, from the world of the digital to the world of stuff.
The best demonstration of this is Uber, where a new generation would prefer to share a car as a resource than own one themselves. For each car that is shared, Rifkin says, 15 are removed from the road, creating a massive impact on the industry.
One of the most important places that this sharing economy will take effect is in the energy portion of this third industrial revolution. Wind and solar energy sources are seeing the “lateral network effect” occur as small electricity cooperatives spring up across Europe.
Rifkin states that renewable energy provided by wind turbines and solar panels are an important aspect of the third industrial revolution.
Rifkin says the growth of wind and solar energy is on an exponential curve. This is especially relevant to a sharing economy because, as Rifkin puts it, “The sun has not sent you a bill. The wind does not invoice you."
The lateral network future, Rifkin suggests, does not include deriving profits by introducing energy into the grid but rather through managing energy throughout a supply chain. For examples of what this might look like, he suggests, “Watch Europe. Watch China.”
The Role of the Electronics Industry
But if we’ve already designed the technologies that comprise the ingredients Rifkin believes will spark our next revolution (e.g., smartphones, solar and wind energy, EVs, the IoT, data aggregation, etc.) why isn’t this revolution already upon us?
"The problem is that we're not scaling,” says Rifkin. “We're doing pilot programs."
While the technologies are being developed, they’re often only demonstrated in one-off smart buildings or other small, exploratory programs. If the revolution is to occur, says Rifkin, these efforts need to scale.
It is here, he says, that the electronics industry will be important: scaling the revolution through the IoT.
At the end of his presentation, Rifkin stated that the “mission of electronics in Europe” should be to “create unity in industry.” He suggests doing this with empathy, the characteristic he considers our strongest suit as a species.
“If we do,” he says, “we have a chance.”
The Third Industrial Revolution
This is merely a glance at the complexity of Dr. Rifkin’s presentation, which involved explanations of the theory of thermodynamics, economic concepts such as zero marginal costs, and an assessment of the shift in temperament between generations.
If you’d like to learn more about Dr. Rifkin’s stances on these matters, he’s released a book titled The Third Industrial Revolution. He also worked with VICE Media on a documentary that’s currently free to watch on YouTube, which you can check out below:
electronica 2018 is off to an ambitious start, setting the tone with a thought-provoking keynote speaker who painted a vivid vision of the future of technology.
Rifkin’s presentation drove home electronica 2018's motto "Connecting everything. Smart, safe, and secure" with his points regarding connectivity, investment in the next generation, and a strong sense of optimism that Europe—and Germany in particular—will be the leader in these next steps of technological advancement.
Do you think the IoT will be the key to the next industrial revolution? Let us know your thoughts in the comments below.