The centralized energy infrastructure, in turn, sets the conditions for the rest of the economy, encouraging similar business models across every sector. It is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.
The Internet OF Things To grasp the enormity of the economic change taking place, we need to understand the technological forces that have given rise to new economic systems throughout history. Byit is estimated there will be more than trillion sensors connecting the human and natural environment in a global distributed intelligent network.
It will affect our identity and all the issues associated with it: Physical products and services, moreover, can now be enhanced with digital capabilities that increase their value.
The industry of today and 3rd industrial revolution aim to connect all production means to enable their interaction in real time. The first industrial revolution used water and steam to mechanize production, the second used electric energy to create mass production and the third used electronics and information technology to automate production.
The long-term transition from ownership of vehicles to access to mobility in driverless vehicles on smart road systems will fundamentally alter the business model for the transportation industry. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before.
Democratizing Manufacturing For example, consider manufacturing. Economists acknowledge the powerful impact the near zero marginal cost has had on the information goods industries.
While much of the manufacturing will be done by small and medium enterprises that can take advantage of the increased energy efficiencies and productivity gains of lateral economies of scale, the giant manufacturing enterprises will find value in aggregating, integrating and managing the marketing and distributing of products.
As automation substitutes for labor across the entire economy, the net displacement of workers by machines might exacerbate the gap between returns to capital and returns to labor.
In the end, it all comes down to people and values. The transportation and logistics sector will have to be transformed into an automated GPS-guided driverless network running on smart roads and rail systems. The distributed, peer-to-peer nature of the IoT platform allows millions of disparate players—small and midsize businesses, social enterprises and individuals—to come together and produce and exchange goods and services directly with one another, eliminating the remaining middle men that kept marginal costs high in the Second Industrial Revolution.
While many traditional industries suffered, the zero marginal cost phenomenon also gave rise to thousands of Internet enterprises that reaped handsome profits by creating the applications and aggregating the networks that allow the emerging sharing economy to flourish.
Meanwhile, 6 million students are currently enrolled in free massively open online courses MOOCs that operate at near zero marginal cost and are taught by some of the most distinguished professors in the world. About 40 percent of the U. The Third used electronics and information technology to automate production.
In the new era, everyone can potentially be their own manufacturer as well as their own internet site and power company.
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.
The ability to centralize production and distribution— the essence of modern capitalism— is critical to the effective performance of the system as a whole. That firewall has now been breached.
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.
And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance. For industry, this revolution gave rise to the era of high-level automation in production thanks to two major inventions: Digital fabrication technologies, meanwhile, are interacting with the biological world on a daily basis.
These new platform businesses are rapidly multiplying into many new services, ranging from laundry to shopping, from chores to parking, from massages to travel.
Marginal cost is the cost of producing additional units of a good or service if fixed costs are not counted. Disruption is also flowing from agile, innovative competitors who, thanks to access to global digital platforms for research, development, marketing, sales, and distribution, can oust well-established incumbents faster than ever by improving the quality, speed, or price at which value is delivered.
But as a complement to the best parts of human nature—creativity, empathy, stewardship—it can also lift humanity into a new collective and moral consciousness based on a shared sense of destiny.
Like every parent-child relationship, the two economic systems more often cooperate, but on occasion are at odds. The digitalized communication Internet is converging with a digitalized, renewable "Energy Internet" and a digitalized, automated "Transportation and Logistics Internet" to create a super "Internet of Things" infrastructure.
The digital economy will revolutionize every commercial sector, disrupt the workings of virtually every industry, bring with it unprecedented new economic opportunities, put millions of people back to work, democratize economic life and create a more sustainable low-carbon society to mitigate climate change.
The Third Industrial Revolution InMr. Rifkin published the New York Times best seller, The Third Industrial Revolution: How Lateral Power is Transforming Energy, the Economy, and the World. The price of energy and food is climbing, unemployment remains high, the housing market has tanked, consumer and government debt is soaring, and the recovery is slowing.
Erecting the IoT infrastructure for the Third Industrial Revolution will require a significant investment of public and private funds, just as was the case in the first two industrial revolutions.
The financing is within reach, but will require a reprioritization of currently allocated infrastructure funds. The emerging Third Industrial Revolution, by contrast, is organized around distributed renewable energies that are found everywhere and are, for the most part, free—sun, wind, hydro, geothermal heat, biomass, and ocean waves and tides.
A Third Industrial Revolution is unfolding with the convergence of three pivotal technologies: an ultra-fast 5G communication internet, a renewable energy internet, and a driverless mobility internet, all connected to the Internet of Things embedded across society and the environment.
This 21st century smart digital infrastructure is giving rise to a radical new sharing economy that is transforming the way we manage. The second industrial revolution came in the early 20th century, when Henry Ford mastered the moving assembly line and ushered in the age of mass production. The second industrial revolution began in America in the early 20th century with the assembly line, which ushered in the era of mass production.
As manufacturing goes digital, a .3rd industrial revolution