Big Ideas

The Revolution Will Be Digitalized

Noted economist and Convening Leaders 2017 speaker Jeremy Rifkin sees our global economy entering a ‘post-carbon’ era fueled by near-instant communication, green technology, and the Internet of Things.

When Jeremy Rifkin paid German Chancellor Angela Merkel a visit in Berlin shortly after she took office in 2005, the economist didn’t mince words. “The first thing I said to the chancellor when I got there,” Rifkin said in a recent interview with Convene, “was, ‘How do you create new business opportunities and new jobs in Germany when your businesses are plugged in to a Second Industrial Revolution infrastructure of centralized telecommunication; fossil fuels and nuclear power for energy and internal combustion; and road, rail, water, and air transport for mobility? That infrastructure peaked in its productivity over 20 years ago all over the world.’”

Jeremy Rifkin will speak at PCMA Convening Leaders 2017, which will be held in Austin on Jan. 8–11.

Given her own background in the sciences, it’s not surprising that Merkel heeded Rifkin’s call to action. Ten years on, one-third of Germany’s electricity grid is powered by solar or wind technology — and the country plans to rely completely on renewable-energy sources within 20 years.

President of the TIR Consulting Group, a senior lecturer at The Wharton School’s Executive Education program, and a main-stage speaker at PCMA Convening Leaders 2017 in Austin, Texas, Rifkin was nearly as blunt during our interview as he was with Merkel as he detailed the intertwined environmental and financial crises now facing the planet — and offered up his model for a greener and more just global economy.

Much of your recent work focuses on how climate change has affected and will continue to affect the global economy. Can you explain the relationship between them?

The fact is that the global economy is slowing everywhere. GDP is slowing all over the world, and the reason is productivity is declining in every region of the world and the result is that unemployment is very high now, especially among the Millennial generation coming into the workforce. When we do the math, two centuries into the Industrial Revolution, here’s the bottom line: I think we have to acknowledge that half the human race is far better off today than before the Industrial Revolution. The other half of the human race is making two dollars a day or less, and is no better off — and worse off in some cases — than they were before the Industrial Age.

During the last two centuries of the Industrial Revolution, we’ve been spewing massive amounts of CO2 into the atmosphere. Our fertilizers, our pesticides, construction materials, pharmaceutical products, synthetic fibers, power, transportation, lights — they are all made by fossil fuels, so we’ve seen this massive amount of CO2 in the atmosphere change the water cycles of the earth. That’s what’s so frightening. This is a watery planet, so our ecosystems have developed over millions of years based on water cycles, cloud cover, and how water is distributed around the world in the atmosphere.

The problem is, for every one degree that the temperature on Earth goes up due to CO2 emissions, the atmosphere is actually sucking up 7 percent more precipitation from the ground. It’s forcing it into the clouds, so we’re getting more extreme water events, more extreme winter snows, more extreme flooding in the spring around the world, more summer droughts and wildfires, or Category 3, 4, and 5 hurricanes.

The concept of a Third Industrial Revolution that will move global industry beyond fossil-fuel-based technologies is crucial to your work. What is that?

The Third Industrial Revolution brings together a new convergence of communication, energy, and transport to manage, power, and move economic activity. This will allow us to dramatically change our way of living on the Earth, so that we can address climate change, put people to work, create new businesses, and live in a more responsible way.

One aspect of the Third Industrial Revolution will be familiar to everyone in the world, and that’s the communication internet that we’re all using now. Everyone has a smartphone. That digital communication network that we’re all using is now converging with a new source of energy — renewable energy — eventually resulting in a digitalized, renewable-energy internet that allows everyone to produce their own renewable energy and send it across the world on this “energy internet.”

A critical component is an Internet of Things platform that brings together the communication internet, the renewable-energy internet, and the transportation internet, allowing us to live in a very, very streamlined world where we can dramatically increase our efficiency and productivity, reduce our ecological footprint at marginal cost, and live in a more sustainable way on the planet.

How will the Third Industrial Revolution fuel economic growth?

Traditionally, when you create new infrastructure — think of the First Industrial Revolution in the 18th and 19th centuries, or the Second Industrial Revolution in the 19th and 20th centuries — the 40-year build-out of the infrastructure is what created the jobs. For the Second Industrial Revolution, we had the interstate highway systems, and we had to lay out the suburban developments, and we had to outfit rural areas with electricity. That was a huge amount of opportunity for businesses, and created millions of jobs.

The Third Industrial Revolution’s smart digital economy will do the same. It will require telecom, cable, IT, consumer-electronics, transportation, logistics, and construction companies to lay out this infrastructure, and that’s millions and millions of jobs. Robots won’t do that. AI software won’t do that. These are the opportunities ahead.

For us, it means that this is a difficult challenge, extremely difficult, but there’s no Plan B.

Kate Mulcrone

Kate Mulcrone is digital editor of Convene.