"the value of information does not survive the momentin which it was new. it lives only at that moment; it has to surrender to itcompletely and explain itself to itwithout losing any time." "a story is different.it does not expend itself. it preserves andconcentrates its strength and is capable of releasing iteven after a long time." â€” walter benjamin
vice documentary filmsimpact present the third industrial revolution a radical new sharing economy the global economy is in crisis. economists warn that we faceanother 20 years of declining productivity,slow growth, steep unemployment and increasing inequality. the economic downturn is fuelinggrowing discontent toward
governing institutions and spawningextreme political movements around the world. and now, after 200 yearsof industrial activity, scientists report thatclimate change is ravaging the planet,taking us into the sixth mass extinctionof life on earth. where do we go from here? jeremy rifkin isan economic and social theorist and the author ofover 20 books including
"the zero marginal cast society,""the third industrial revolution," and "the empathic civilization." he is an advisorto the european union and the people's republic of china, and a principal architect of theirthird industrial revolution plans. let me start on a very somber note. i hope it will end up beinga liberating reflection. you'll have to judge. gdp is slowingall over the world everywhere.
and the reason is productivityhas been declining for twenty yearsall over the world. the result: unemploymentis very high everywhere. and nowhere is itmore pronounced than among the millennial generationcoming into the workforce. our economists tell usthat we can look forward to slow productivity and slow growthfor the next 20 years. and let me do the math for you: at the end of twoindustrial revolutions
in the 19th and 20th century,here's the equation: we have to admit thathalf the human race is far better off today than our ancestors were beforewe began this industrial experiment. granted? also we need to acknowledgethat 40% of the human race are making $2 a day or less. and arguably they are worse off than their ancestors were beforethe industrial experiment.
and the final equation: the industrial era, whileit's benefited half the human race in detriment tothe other half of the human race, the well-off, thevery wealthy have done quite well. today, the 62 wealthiesthuman beings in the world â€”we could put them in thislittle section of the room. the 62 wealthiest human beingsin the world today their combined wealthequals the accumulated wealth of one half the human populationliving on earth.
three and a half billion people. there's somethingreally dysfunctional about the waythe human family is organizing its economic relationshipson this earth. it's clear we're in a long-termstructural economic crisis at the end of the2nd industrial revolution. but now this industrial airhas given rise to a much more profound crisisâ€”an environmental crisis. we have spewedmassive amounts of coâ‚‚
and methane and nitrous oxideinto the atmosphere of this planet to create thisindustrial way of life. and now we have so much coâ‚‚, methane and nitrous oxidein the atmosphere that is blocking the sun's heatfrom getting off the earth. we are in real time climate change. this is no longer a theory. this is no longerlooming on the horizon. this is no longer imminent.
climate change is nowat the house, in the door. what's terrifyingabout climate change â€”and unfortunatelyit's never explained, because if it were explained, our human family would bejustifiably terrified and motivated and drivento begin to transform this planet. climate change changesthe water cycles of the earth. that's what this is all about.it's never explained. we're the watery planet.
our satellite probesgo to other planets and what's the first thingwe look for? water. no water? not interested! recently they discovered whatthey think is dirty water on mars and everybody is thrilled. our ecosystems on earth havedeveloped over millions of years based on the water cycles, the cloud cycles thattraverse them across the earth. for every one degree that thetemperature of the planet goes up
because of industrial inducedcoâ‚‚ emissionsâ€” for every one degree that thetemperature goes up on this planet, the atmosphere isactually sucking up 7% more precipitationfrom the ground. the heat is forcingthe precipitation into the clouds, so we're gettingmore concentrated precipitation, more violent water events,but they're more infrequent, throwing the entire water cycleof the earth off kilter. more blockbuster winter snows.
eight feet in bostonat last season? my gosh! more dramatic spring floods â€”that flood in the carolinas,remember? they said this flood only willoccur once every thousand years. it's the new normal. more prolonged summer droughts. my wife and i were inbritish columbia and we're coming into vancouver. the pilot says, "we havesome smoke coming in."
i turned to my wife and i said,"you mean smog?" no, he meant smoke. wildfires frombritish columbia to california. summer droughts and wildfire. we have category 3, 4, and 5hurricanes now â€”so dramatic thatthey're destroying infrastructure and killing peopleall over the world. that hurricane thathit the philippinesâ€” this was the mostpowerful hurricane ever recorded.
this is the new normal. what i'm saying hereis that climate change is dramatically changingthe water cycles. they're out an exponential curve. this is absolutely frightening. it's terrifying. and, if you are a young millennialabout to start a familyâ€” if you're a parent hereor a grandparent. i want you to listen to this.
our scientists now tell usthat we are in the sixth extinction event of life on earth. it doesn't even make the headlines. this is the most dramatic storya human family has ever faced. there have been fivemass extinction events on earth in 450 million years. and each time the chemistryof the planet shifts very quickly â€”there's what we calla turning pointâ€” and massive die out.
and after the massive die out of life, it takes upwards of 10 million years to get new life back on earth. our scientists now tell us we arein the sixth extinction event this is not a modelâ€”we're chronicling it in real time. and what they're saying is thatover the next seven decades â€”and many of you willbe around for a lot of that, and your children willâ€”in the next seven decades we could lose over halfthe species of life
that now inhabits thislittle oasis in the universe. as my wife says,we just are not grasping the enormity of this moment. we might acknowledgeclimate change, but we're going onas business as usual, with a little green washing. 99.5% of all the speciesthat ever been on this planet have come and gone.those are not good odds. and what's interesting is,human beingsâ€”
we're the actual youngest species,we're the babies. anatomically modern humans haveonly been here about 200,000 years. there's no guaranteewe're gonna make this. and the new studiesthat have just come out they're even more terrifyingbecause they're seeing the freshwater melts in the arctic, nowin greenland and now in antarctica much quicker than we expectedchanging the ocean currents. and they're talking about storms that are beyondanything we can imagine,
that we've ever seen in human historyby the end of this century. talking aboutthe major coastal cities, where much of oururban population is, underwater. this is not a century from now. this is in the lifetime ofmany young people who are four and five nowand will be my age when we're in full steaminto this new era, this abyss. so what do we do? we need a neweconomic vision for the world.
it has to be compelling. we needed a game planto deploy that vision and it needs to be quick. it needs to move as quicklyin the developing countries as in the industrialized nations. if we have any chance of arrestingthe worst of this climate change we're gonna have to be off carbonin four decades everywhere. this is beyond anything we'retalking about at global conferences. how do we begin to tacklesomething of this magnitude?
we need to step back and reflect on how the great economicparadigm shifts in history occur. if we know how they occur, we're gonna get a road map herein this room and around the world, and we're gonna get a compass thatallow us to navigate a new journey to completely transform the waywe handle life on earth. chapter one: the greateconomic revolutions in history there have been at least seven major economic paradigm shiftsin history,
and they're very interestinganthropologically because they share a common denominator. and that is ata certain moment of time three technologies emergeand converge to create what we callin engineering a general-purposetechnology platform. that's a fancy way of saying"a new infrastructure." it fundamentally changes the way we manage powerand move economic life.
what are those three technologies? first, newcommunication technologies to allow us to more efficientlymanage our economic activity. second, new sources of energy to allow us to more efficientlypower our economic activity. and third, new modes of mobilityâ€”transportation logisticsâ€” to allow us to more efficientlymove the economic activity. so when communication revolutionsjoin with new energy regimes, and new modes of transportation
it does change the way we managepower and move economic life. it changestemporal spatial orientation. it changes our habitats. it allows us to integratein larger units. it actually even changesconsciousness and governance. let me give you two examples: first industrial revolution,19th century. second industrial revolution,20th century. the brits took us intothe first industrial revolution.
and first there wasa communication revolution. they inventedsteam-powered printing. no more manual print presses. steam power printingwas a big leap forward, because it allowed us to massproduce very cheap print quickly. then, in thesecond half of the 19th century, the brits lay out a telegraphsystem across the british isles. steam power printing and the telegraph: those communication technologiesthen converged with
a completely new source of energyin britain called coal. but how are they gonnatake that coal and harvest it? they invented the steam engine. then this is ingenious: they figured out that they shouldput the steam engine on rails, for locomotives,national transport and logistics. urban life,the industrial revolution, steam power. second industrial revolution:the united states.
centralized electricity and especially the telephone. i know we thinkthe internet's a big deal, but a telephonewas a really big deal. all of a sudden,people could communicate at vast distancesat the speed of light. later, radio and television. these communication technologies converge in the united states witha completely new energy source.
cheap texas oil. then, henry fordput everybody on the road with cars, buses, and trucks. second industrial revolution changed that second industrial revolutiontook us through the 20th century. it took the whole worldthrough the 20th century. and it peaked in july 2008. hi! welcome back to the show here:oil! oil! oil! to $147 we wentâ€”
remember that month? in that month, brent crude oil had a record price of $147 dollarson world markets and, when it hit that record price, the whole global economy shut down. silence. completely gone. that was the economic earthquake. the collapse of thefinancial markets 60 days later
was the aftershock. mayhem, carnage, and bloodbath. call it what you want,but what we saw on global stock markets todaywas ill-disguised panic. good evening.this was the day after what may someday be calledblack monday on wall street because it was perhapsthe worst financial collapse since the great depression. our policy leaders arestill dealing with the aftershock,
not the earthquake. why was it the earthquake? because the entireindustrial revolution that we've gone through is all dependent onthe carbon deposits of a previous period in history. you know, if we look backlet's say that we make it through thisnext period of history. i always wonder what willfuture generations think of us,
maybe in ahundred thousand years from now. they'll say,"oh, yes, we remember them." "there wasthe bronze age, the iron age." "these werethe fossil fuel people." "they dug up the burial groundsof the carboniferous era and created a short-lived dramaticand very dangerous civilization." it's all about fossil fuels. our fertilizers and pesticidesare made out of fossil fuels. our construction materialsare made out of fossil fuels.
most of our pharmaceutical productsare made out of fossil fuels. our synthetic fiber, our power, our transport, our heating lightsâ€” all made out of,moved by fossil fuels. when the price of oilgoes over around $95 a barrel, all the other prices go up. when we get into the zone ofaround $115 a barrel, prices become so high,the purchasing power slows. this is the sunsetof a great industrial era.
now you remember in 2009oil went down to 50 a barrel, because the economy had shut down. there was no activity. in 2010, we triedto regrow inventories, so oil prices started to go upall the other prices go up. in 2014 we hit a new peak of$114 or $115 a barrel. purchasing power slowed down again. this is a convulsion ofgrowth-shutdown, growth-shutdown. and the only reason oil went down
in the last few yearsto $30 a barrel is now the fossil fuel industryis fighting among themselves. in the sunset. opec said, "we're gonna keepthe oil spigot open." "we're gonnaflood the world with oil." "and that's gonna takethe price down the $30 a barrel and wipe out our new competitors,the more exotic fossil fuels: shale gas in the us,tar sands in canada." guess what? they wiped them outâ€”only took a year and a half.
bankruptcies across the usain the shale gas industry. and now tar sands in canada. the pipeline's not happening. and do you hear anybody talkingabout energy independent right now? it's over! and, as soon as thebankruptcies complete themselves, the oil prices are nowstarting to go back up. but now we have failed stateswhere there's oil production. we have failed states.
so this is a volatile,convulsive sunset over the next 40 to 50 yearsâ€”an unstable world. where do we head from here? let me share an anecdote. when angela merkel becamechancellor of germany, she asked me to come to berlin in the first couple of weeksof her new government to help her addressthe question of how to grow the german economyon her watch.
now, remember:in terms of per capita germany's the most robust capitalistmarket economy in the world. when i got to berlin, the first question i askedthe new chancellorâ€” i said, "madam chancellor how areyou gonna grow the german economy when your businesses are plugged into a platform, an infrastructure of centralized telecommunication, fossil fuel nuclear power, internal combustion,road rail water, and air transport
â€”and that infrastructurepeaked in its productivity, in germany, years ago? chapter two:the science of productivity. let me talk about productivity. this is crucial. our economists are lamenting. they're asking, "why's productivitybeen declining for 20 years?" "we have all these new killer productscoming out of silicon valley." "why is productivity declining?"
i'm gonna share with youa dirty little secret in economics that economistsdon't like to talk about. we used to believe thatthere are two factors that drive productivityin standard economic theory: better machines andbetter performing workers. but when robert solowwon the nobel prize for economic growth theoryin the mid-1980s, he actually letthe little secret out. he said,"we've got a problem here."
when we trace every single year ofthe industrial revolution these two factorsâ€”better machines, better workersâ€” it only accounts for about14% of the productivity. so robert solowasked the big question: "where does the other86% of productivity come from?" don't know. moses abramowitz,the former head of the american economic association said, "this is a measure of our ignorance."
now wouldn't you thinkeconomists would know where productivity comes from, because that's the basisof the discipline? here's why they don't know. when classical economic theorywas penned in the late seventeen hundreds, the vogue was newton's physics. newton was the big guy in town. everybody wanted to usenewton's metaphor
so they could be more scientific because he had discovered the lawsthat run the universeâ€”supposedly. the economists also fell in line. for example, you know newton's law: "for every action there'san equal and opposite reaction." adam smith borrowed that metaphor for his invisible handof supply and demand. "for every action on the supply side there's an equal and oppositereaction on the demand side."
newton's law: "a body in motionstays in motion unless disrupted." baptiste say borrowed that metaphorâ€”the french economist. and he suggested that,"well supply will stimulate demand, which will generate supply,which will stimulate demand â€”unless disrupted." all of our economic theory, ifyou go back and take a look at itâ€” it's all based on newton'smetaphors in physics. there's only one problem with this: newton's physics has absolutelynothing to do with economics.
nothing. economics is governed by thesame laws that govern the universe, the solar system,the biosphere on earth, and every single thing you and ido in our economic life while we're here on this planet. here are the two laws that governeverything in the universe, including our economy. the first law of energy says: "all the energy in the universeis constant."
"since the big bang,no new energy has been created." "no energy has been destroyedsince the big bang." that's the conservation law. the second law of energysays that's true that the energy isn't createdor destroyed, but it always changes form,but only in one direction. from concentratedâ€”the big bangâ€”to dispersed through the galaxies. from hot to cooled offthrough the galaxies. from order to disorder.from available to unavailable.
entropy is a measure of theenergy that's still there, but not available to do useful work. there are three systems thatwe can talk about in thermodynamics: an open system that exchanges matterand energy with the outside world; a closed system, which exchangesenergy with the outside world, but does an exchange matter; and an isolated system, whichdoesn't exchange matter or energy with the outside world. the earth in relation to thesolar system and sun is b.
we get plenty of energyfrom the sun, we don't have to worry about thisfor billions of years. but in terms of the fixed matteron this planet we don't have a lot ofadditional matter coming down here. we get a few meteorites,a little cosmic dust, but whatever we havein terms of fixed matter â€”which is a form of energyâ€”has beenhere since we blew off the sun and cooled off. all of you have smartphoneson you right now and
there are little granulesof rare earths in those phones. they've been here sincethe earth has been here. that's a form of energyas a material form. so here's whateconomics is all about: we extract low entropy,available energy in nature â€”a rare earth, a metallic ore,a fossil fuelâ€” we extract it and then,through our value chains, we store it, we ship it, we producegoods and services from it, we consume it,we recycle it back to nature.
those are value chains. at every step of conversion,â€”when we take nature's resources and move it through societyâ€”at every step of conversion we have to embed energyinto that good or service to get it to the next stageof what it becomes. but we lose some energy in theprocess of that conversion. this is called"aggregate efficiency" in economics. aggregate efficiency is the ratioof the potential work versus the actual useful workyou actually embed
in the good or service. let me give you an example. nature has the sameeconomic conditions that we have in our human economy. if a lion chases downan antelope in the wild, then kills it, about 10-20% of the total energythat's in that antelope gets embedded into the lion. the rest is heatlost in the conversion.
that's the aggregate efficiency. what does this have to dowith my conversation with the chancellor of germany? she's a physicist, you know,by background. so here's what i said to her. we started the 2nd industrialrevolution in 1905 in the usa with 3% aggregate efficiency. at every conversion of nature'sresources through the value chain, we lost about 97%â€”it didn'tget into the product or service.
by 1990, the us got up to about14% aggregate efficiency. that was our ceilingâ€”nothing's changed since then. and i reported to the chancellor thatgermany got up to about 18.5% aggregate efficiency. that was their ceiling.nothing's changed. anybody wanna guesswhich country led the world in aggregate efficiency? â€”china?â€”japan? japan!
20% aggregate efficiency,1990s, reached its ceiling. what i'm sayingto the chancellor is this: you can have market reforms,labor reforms, monetary reforms. you can create incentivesfor killer new products. you can try to createa million steve jobs. it won't makea damn bit of difference. if your businessesare still plugged in to a 2nd industrial revolutioninfrastructure you can't get above the ceiling
of 20% aggregate efficiencyanywhere in the world. why is this important? a new generation of economistswho happen to study physics have gone back andlooked at the industrial record and they addeda third factor to productivity: better machines, better workers,aggregate efficiency. the ratioâ€”yes, it's so obvious!the ratio of potential to useful work. when they put in that third factor, it accounts formuch of the rest of productivity.
henry ford could have told you this. in fact every engineercould have told you this. every architectcould have told you this. every biologistcould have told you this. every chemistcould have told you this. they all have to starttheir training in school by learning these two lawsof energy that govern the universe. i teach in the oldestbusiness school in the world. i taught theadvanced management program
at the wharton school for 15 years. not a single business schoolin the world today, right now,requires that you learn about the 1st and 2nd lawsof thermodynamics that govern economic activity. how shameful is this? so, in that first daywith the chancellor we discusseda 3rd industrial revolution: a new convergence ofcommunication,
energy and transportation to manage power and move germany. at the end of the day,in a private session, the chancellor said, "mr. rifkin, we will have this3rd industrial revolution here in germany. chapter three:a new smart infrastructure the communication internetis now mature. it's been 25 years sincethe world wide web.
we have digitalized communication. now this communicationinternet is converging with a nascent, digitalized,renewable-energy internet. and now both those internetsare converging with a fledgling, automated, gps,and very soon driverless road, rail, water,and air transport internet to create three internets: communication internet, renewable energy internet,
automatedtransportation-logistic internet. one super internet to manage,power, and move economic life. these three internets ride on topof a platform called the "internet of things." we're embedding sensorsin all of our devices, as you know, so they can monitorreal-time activity and then talk to other machinesand talk to us. so we have sensors nowin the agricultural fields and they're actually monitoringthe growth of crops
the soil salinity,the moisture in the crops, etc. they're sending that data. we have sensors nowin the factories that are monitoringour economic data. we have sensors in smart homes monitoring how the energyis used in our buildings. we have sensors in smart vehicles,warehouses, smart roads. all of them collecting data. but where does that big data go?
it goes to communication, energy,and transport internets to manage, power,and move economic life. as this new system comes in it's gonna be ubiquitous by 2030, connecting everything witheverything with everyone. we are essentially creatingan external prosthesis â€”a distributed nervous systemâ€” that's gonna alloweveryone on this planet, at very low cost,
to begin directly engagingeach other on a global internet of things and bypassing a lot of thevertical integrated organization and middlemen that kept usaway from each other. we can have direct engagement now. this is the revolution. this evens the playing field. there's been a long discussionamong the millennialsâ€” you started this:occupy movements.
saying, "what about the 1%?the 99%?" now we have a new platform. the internet of things platformis of a different nature than the platforms in the1st and 2nd industrial revolution. the new platform is really radical, because this 3rdindustrial revolution platform is designed to be distributed,not centralized. it works bestwhen it's collaborative, and open and transparent,rather than closed and proprietary.
and the benefits come when moreand more people join the network and each of uscontributes our talents, which benefits the networkand then benefits us. it's designed to be laterally scaled,not vertically integrated. and this is what moves usfrom the 1% of the 99% to a vast, vast expansionof social entrepreneurialism and global networks. that's the upside. on the other hand, how do wedeal with network neutrality?
how do we ensure that everyonehas equal access to this newinternet of things platform, this 3rd industrial revolution? how do we make sure governmentsdon't purloin this platform for political purposesâ€”it's already beginning. how do we make surethat giant monopoly companies, some of them on the internet, don't use that data for their owncommercial purposes at our expense? how do we ensure privacywhen everyone's connected?
how do we ensure data securitywhen everyone's connected? how do we prevent cyber crimeand cyber terrorism that could disrupt the systemand take it down when everyone's connected? this is the darknet, and whati'm saying to you today is that the darknet is as impressiveas the opportunity of the brightnet. and i would say thatthe next three generations, beginning with you andyour children and grandchildrenâ€” you're gonna be heavily engagedin a new political movement.
and that movement isgoing to be to ensure against the darknet prevailing, and making sure that we allhave equal access, so the human family can engagein a distributed nervous system and begin to have a vast expansionof social entrepreneurialism. this is the political strugglethat starts with the millennials, your children and grandchildren. this is an uphill battle. this is not a cakewalk.
i'm not a technological deterministand i'm not a utopian. technology just enables,then the question is, how will that journey end? it's a big question mark right now. but let's assume,for the sake of this afternoon, that we're gonna be ableto deal with all the complexities of the darknetâ€”and it's a big challenge. here's what this internet of thingsplatform provides. let's say here at brooklynyou're a sme
â€”small and medium-sized enterprise,or cooperative, or nonprofit. you can go up on this nascentinternet of things platform that's already emerging. it's not theoretical. and you can havea transparent picture of all the economic dataflowing through the world â€”if it stays network neutral. the power here is enormous. we think snowden was a big deal?
now all the economic datais gonna be open to everyone, not just a few government secrets. but in a network neutral world you're gonna be able to go upon this platform and have a completely transparentpicture of all the data. you can go up on the platformand cut your big data on your value chainout from the noise. then, you can mine your big datawith analytics. then you can create your ownalgorithms and apps.
they'll allow you to dramaticallyincrease your aggregate efficiency at every step of conversionon your value chain. and, as you do that, dramaticallyincrease your productivity, dramatically reduceyour ecological footprint, and dramaticallyplunge your marginal cost. some of those marginal costsare gonna get so low â€”they head to zero marginal cost. and when they hit nearzero marginal cost, it gives rise to a completelynew economic system.
chapter four: zero marginal costand the rise of the sharing economy. in economic theory,the optimum market is where you sell at marginal cost. marginal cost is after fixed costs. once you pay forwhatever the technology is. the marginal cost iswhat it costs to produce a unit. classical economic theory,we've always said that the most optimum market iswhere you sell at marginal cost. here's the problem wenever expected
a technology revolutionâ€”digital revolutionâ€” that would be so powerfulin its potential productivity that it could actually reducethe marginal cost for some goods and servicesto near zero. meaning there's no longera profit margin and you can produce goodsand services for each other beyond the marketin the sharing economy for nearly free. this sharing economydidn't come out of the blue.
capitalism gave birthto the sharing economy. let me be clear: as muddy asthe sharing economy is, it's the firstnew economic system to enter onto the world stage since capitalism and socialismin the 19th century. it's a remarkable historical event. this is already happening. zero marginal cost phenomenais not theoretical.
it's been how many years sincenapsterâ€”the file-sharing service? about 17 years? 17 years! well, this little file-sharingservice started a revolution. we have 3 billion peopleright now on the internet â€”and now the internet of thingsâ€” who are actually producingand sharing virtual goods at near zero marginal costbeyond the market, disrupting entire industries. we have young people that areproducing their own music.
and what does it cost to have a little technology,a little machine that allows you studio-quality music whenyou wanna record in your home? and then,whether you send that music to one person on the web or a billionâ€” it's zero marginal costs. you just need a service providerto keep your power up. i was surprised when thatkorean performance artist a couple years agoâ€”
a billion peoplewent to his website! zero marginal cost. we have millions of young people,any given day, who are producing their ownyoutube videos. take a little video,put it up on the web, a billion people can see it. we have people producing their ownnews blogs and social media. near zero marginal cost. we have millions of peoplecontributing to wikipedia
and constructing the knowledgeof the world on a non-profit website for free. this is the most improbableexperiment i could ever imagine. i don't know how jimmy walescame up with this. i would have said,"this cannot succeed!" adam smith said,"each individual pursues their own self-interestand never cares about the public good." but in pursuing their self-interest
and not giving a damnabout the public goodâ€” by pursuing their self-interest,the society is better off. i always thoughtit was a little dubious, but that's how we grew up. but apparently, none of themillennials have read adam smith. because, for example,in wikipedia you're all freely giving your talent, putting things up on wikipedia, constructing the knowledgeof the world.
you've democratized knowledgein less than 15 years and the accuracy is... now: book publishing. what's happening? people are creatingtheir own free ebooks. my new book came outon the pirate bays before we could publishin our languages and â€”god bless themâ€”they were ranking it before amazon could even touch it.
we have 6 millioncollege students taking massive open online college coursestaught by the best professors at the best universities.they're getting college credits. it's free! you can't win here.you millennials have won. unless we outlawall the technology, we've got to finda way to live with it and find value with it. entire industrieshave been disrupted
in the 17 years since napster. the music industry has shrunk. television has declined 'cause everyone's producingtheir own youtube videos. you're all producerssharing with each other. newspapers and magazineshave gone out of business with social blogs. but thousands ofnew enterprises have emerged. not just google, facebook, andtwitterâ€”all of these are new.
but thousands ofstartup enterprises â€”profit and nonprofitâ€” they're creating the platforms, they're creating the apps, they're creating the connectivity, they're using theanalytics and the data. it's a revolution! well, we thoughtthere'd be a firewall here. and certainly we could understand
how zero marginal costbrought on by digitalization would affect the virtual world, but we didn't thinkit would move over the firewall to the physical world. what i'm saying, with the zero marginal cost society is that firewall is broken now â€”it's called the internet of thingsâ€”completely gone. we have millions of people now
producing their ownrenewable energy, right now,at near zero marginal cost. free! and now,as we move to car sharing, and as we move todriverless transportation, we're gonna seethe marginal cost plunge toward near zeroin transport logistics in the next 20 years. let's go back to germany.
what's happened in the 10 years since that first conversationwith the chancellor? we are now in germany at 32% of all the electricity powerin germany now is solar and wind, right now.in ten years. and this is a northern countryâ€”doesn't have a lot of sun. we're gonna be 35%of the electricity, solar and wind, by 2020â€” we're gonna be 100%renewable energy by 2040.
absolutely! and what's interesting isthe fixed cost of introducing the solar technologyand the wind turbines and the geothermal heat pumpsâ€” solar and wind areon an exponential curve, just like computers! when i was a kidin the 1940s and 50s, there's only a few computers. they cost millions of dollars.
and the chairman of ibmat the time said, "we probably will needa total of seven computers." "maybe seven!" it was just an optimistic forecast. we did not anticipateexponential curves in computer chips. moore's law. so all of a sudden,intel figures out that their engineers are doublingthe capacity on that chip
every two years.this is still going on. so, even if you're making$2 dollars a day, everyone's going to be connectedto the internet of things within less than 15 to 20 years. and the costâ€”the fixed costsare gonna be as cheap as your cell phones in 20 years. everyone's gonna producetheir own green electricity. these exponential curvesare not going away. you know how mucha solar watt used to cost?
$78 dollars to generateone watt solar in 1978. you know how much it coststo generate one watt solar today? not $78 dollars; 50 cents. it's gonna be 35 centsin 18 months from now. this is really moving quick. and this is what you're not toldhere in the united states by the energy companies. we have power and utility companies â€”some of them in my group,global groupâ€”
and they're quietly, right now, buying long-term 20-year contracts for solar and wind electricityin europe and america, quietly right now,for 4 cents a kilowatt hour. and the berkeley national labs, government labs just announced they're generatingwind and solarâ€” i think it's somewhere between 2.8 and 3.5 cents a kilowatt hour.
it's over actually forfossil fuel and nuclear. and the next big bubbleâ€”i will tell you nowâ€” is gonna be the 100 trilliondollars in stranded assets in the fossil fuel industry. this is gonna makethe subprime mortgage look like the small-time game. because we're movingtoward parity and then solar and windare getting cheaper and cheaper. that's what's going onbehind the scenes,
right now. but what's interesting in germany, once you paythe fixed cost for your solar panel and wind turbineâ€” the marginal cost of producingthe energy in germany today? it's zero! the sun has not sent usa bill in germany. the wind hasn't invoiced us. the geothermal heat has notcome to us with a bill.
so what happens whengerman businesses can plug in to a communication internetthat then converges with an energy internet and we digitalizethe electricity grid, so everyone can producetheir own solar and wind, and either use it off-gridor sell it back to the grid? what happenswhen companies plug in to an energy internet where the cost of the energyis near zero marginal cost.
think about when they haveto move across their value chain, and at each step of conversionon their value chain, their energy cost is near zero. how does any 2ndindustrial revolution country compete with that? and it's not big germany only â€”little denmark's done this. anybody can do this. who's producing all the new energy?
in germany, there are fourmajor power companies: mbw, rwe, e.on and vattenfall â€”these giant, global,vertically integrated companies. and, frankly, we thoughtthey were invincible. what's happened to them in 10 years is what happenedto the music industry, television, newspapers, magazine,and book publishing. thousands of small playershave come together in electricity cooperatives.
farmers, small businesses,neighborhood associations. all of them went to the banksand got loans â€”these electricity cooperativesâ€” and every bankwas completely fine about giving them the loans.why? because they knew thatthe energy they generated would get a premium price whenthey sell it back to the market. nobody was turned down. they're creatingall the new energy.
this is power to the people â€”literally and figurativelyâ€”power to the people. what happened to the big 4power companies? they're producing less than7% of the new power. and they acknowledgethey're out of the game. why? to their credit,they were the most efficient means to produce and distributecentralized power â€”fossil fuel and nuclear power,vertical integration.
but the new energiesâ€” they requiremillions of small players connecting where they arein collecting. you have to collect the suneverywhere in little amounts. and the wind everywherewhere you are. and the geothermal heateverywhere where it is. and youâ€”we reward cooperativeswho laterally scale and join together in networks. big companies can't putall these players together.
the players come together in their own regions of cooperation,and they join together. it is power to the people. does this mean this is the endof the energy companies? not necessarily. many will go out of business.some will not. about seven years ago, the eonâ€”one of thegiant four companiesâ€” they asked if i would debatetheir chairman, mr. tyson,
but in a neutral country,the netherlands. we had a three-hour debate. you're not leavingthe 2nd industrial revolution and i said to him, "look, tomorrow morning. but you also have to bein the 3rd industrial revolution tomorrow morning, because you have a25, 30-year transition to get from the 2nd to the 3rdand find new value.
and i said in the new system, it operates quite differentlythan the old system. in the new3rd industrial revolution you make more money by sellingless and less and less electricity. i said, what you do is, you set up partnershipswith thousands of enterprises. and you help manage the energyflow through their value chains. you help them with their big data. you help them minethat big data with the analytics.
you help them with theiralgorithms and apps. dramatically increasetheir productivity. in return, those thousandsof enterprises will share their gains backwith the power companies. it's called"performance contracts." we're now doing it,and guess what? last year, the chairman of eon â€”took him 7 yearsâ€” they're moving torenewable energies
and they want to help manage parts of the energy internetwith energy services. edf, the great nuclear power,in france has joined our group. we're doingthe whole build-out of the 3rd industrial revolutionin parts of europe: in northern france,the netherlands, luxemburg... and edf said, "we're with you." they're on the groundhelping lay this out. they're not leavingnuclear tomorrow,
but they see thatthe handwriting is on the wall. so the companiesthat don't go there; we don't need them. it's not just europe; now china. when president xi came in to powerwith premier liâ€” premier li announced that he â€”and i was pleasedâ€”he announced he'd read my book, the third industrial revolution. he put out a public announcement.i'd never met him.
i never even been to china. and he instructedthe central government of china to begin looking at these themesthat i'm laying out to you to move china toa 3rd industrial revolution. there mindful in china. they lost the whole1st industrial revolution. they missed almost all the2nd industrial revolution and came it in the tailin the last 10 years. and they said, "we're not gonnalose the 3rd industrial revolution."
"we wanna collaborate with the3rd industrial revolution." and they said,"be among the leaders." to show you how fast they move, i've been shuttling back and forth,but after the first visit â€”it was about eleven weeks later. the chairman of the state grid, which is the largest electricity gridin the world, announced an $82 billion dollar,four-year commitment to digitalize the chinese grid
so the millions of chinese people could produce their own solarand wind in their local communities and share it backon an energy internet. that started this year, yeah. watch europe. watch china. the coming togetherof the communication internet, with the renewable energy internet gives rise to the automated,gps, driverless, transportation logistics internet.
we built the whole global economyin the 2nd industrial revolution around car ownership. that's what this was all about. you've thrown us a curve.you really have. apparently you don't wannaown cars anymore. this is grandma and grandpa. they got two carssitting in the driveway cleaning and waxing themevery few weeks, and they're never used.
or they're at the office 90%of the day never used. you don't wanna own cars. you want access to mobility andcar sharing networks, not ownership ofcars in markets, correct? so there's a problem here. the problem isfor every car shared in car sharingin the sharing economy, we're eliminating 15 cars. this is both the problemand the opportunity.
larry burns was the formervice president of general motors until a few years ago, now he's a professorat the university of michigan. so larry just did a studyâ€”very revealing. he studied ann arbor, michigan. we can eliminate 80% of vehicleswith better mobility, cheaper. now let'sextrapolate larry's study. we've got a billion cars,buses, and trucks choking us in trafficaround the world.
they're the 3rd major causeof global warming emissions. the number 1 cause of globalwarming emissions is buildings. but in europe, we're nowretrofitting those buildings, transforming intomicro power plants and big data centers off carbon. anybody know what thenumber 2 cause of climate change, global warming emissions areby industrial activity? number 1 is buildingsâ€”we always talk about it. number 3 is transport.what's number 2?
â€”consumption of meatâ€”meat, meat, meat. we have 1.3 billion cows. they take up about 23%of the land mass of the earth. i love cows,but the methane they produce is a major contributorto global warming, â€”much more powerful than coâ‚‚â€” and then,when we pasture those animals, we have the fertilizersthat emit nitrous oxide. and it goes on and on.
and i should say that,without mentioning names, even some of theprophetic voices in the climate change debatewill never mention this. because they do not wantto antagonize people and even suggest thatwe may wanna change our diet and move down the food chain so that we can live healthy, respect our fellow creatures, and at the same timemitigate climate change.
so, you never hearthis in the debate. never! number 3 is transport. so, if larry's rightâ€”larry burnsâ€” we're gonna eliminate probably80% of the vehicles in the world in the next two generations because the millennials,your children, and grandchildren are never going to own cars again. this i know.
and the remaining200 million vehiclesâ€” they're gonna be electric. they're gonna be fuel-cell driven. they're gonna be operated bynear zero marginal cost renewable energy. they're gonna be 3d printed, with composite recycled materialsat low marginal cost. they're gonna be driverless. this gets to the question of,
"is this the end of the worldfor transportation companies?" but they have to changetheir business model while they're still in the2nd industrial revolution, selling cars, buses, and trucks. they have to move to the3rd industrial revolution, where they helpmanage vast networks along with all the other players. this is a very cool thing thathappened about six weeks ago. daimler asked me to join themâ€”
daimler invented theinternal combustion engine. so i'm always mindfulthey're a step ahead. and the chairman of daimler trucks brought together 350 journalistsfrom around the world in germany asked me to come inâ€” i laid out the same storywe're talking about here. and then the chairmanof daimler trucks â€”he's one of the eightboard of directorsâ€” he announced that daimleris in a new business.
and that is logistics,on the transportation internet. and he announced that daimlerhad equipped, in the last three years,300,000 trucks full of sensors. â€”300,000 vehicles, and they're on the roads now. these are what i call "big data,""mobile big data centers." and these trucksare collecting data all across the transport corridorsof europe, on traffic flows,weather conditions,
availability of warehouses... all of the data you would needif you're a small business, a large business,or just a home owner, to be able to increaseyour aggregate efficiencies and productivity,reduce your ecological footprint, and anytime you're involved inmoving shipments from a to b. then this iswhat's really interesting. he dimed the lightsand they went to a helicopter feed, live on the german expressway.
and the helicopter zooms inon these three trucks on the german expressway, and then they went right intothe cab of the trucks and the drivers are waving andtalking to everybody in the room. and the chairman ofdaimler trucks said, "okay, gentlemen.take your hands off the wheel. take your feet off the pedals." all of a sudden, the driversbecame software analysts. no longer drivers.
they were software analystsmonitoring the data. the trucks then startedto platoon together, automated, into a mobile data, almost a traingoing down the highways, collecting data. so they're providing the data,and then the analytics, so that you will have apps, so that you can find ways to increase youraggregate efficiency
and be a player in the system. smart! how do we finance this?how do we pay for this? chapter five:financing the transition we are laying out a plan in europecalled "digital europe," "smart europe." and working with theeuropean commission, we're building this outover the next 10 years. but the big question is,
"how do we payfor this infrastructure, region after region,across all of europe to connect us in a digital world, where we can beginto enjoy the new opportunities?" so the question came up in brusselsand i said, "we've got all the money we need." problem's not the money; it'swhat we're doing with the money. i'll give you an exampleâ€”in america is the same situation. in europe, we spent
741 billion equivalent us dollarson infrastructure in 2012. one year alone. that's just a badrecession year, typical. the problem is what we spent it on. we spent the money on an old2nd industrial revolution platform. remember what i saidto chancellor merkel? and we peaked in the productivity 20 years ago at 20% ceiling, and we can't getanything more out of it.
we're stalled, which stalls the economy, stalls the smart startups, stalls the entrepreneurial expansion. so i said, if we simplyreprioritize our investments, spend some of it patching upthe old infrastructure â€”we don't want it to collapseâ€” but we prioritize, so part of those funds each yeargo to each region,
so that they can beginto build out and scale up a 3rd industrial revolutioninfrastructure. with aninternet of things platform, we will be there in 30 years. this year, we reprioritizedour funding at the eu and, beginning in januaryof next year, regions across the euwill secure eu funding, leverage against private equity, and each region willcustomize and build out,
like wi-fi, their planand then connect up region to region to region. we call it "digital europe." we have a similar plan called"china internet plus" across the regions of china. where's the us here? chapter six: two generationsof mass employment the coming togetherof this revolution will involve every industry:
telecom, cable, ict,consumer electronics, transport, logistics,construction, and real estate â€”all the retrofittingâ€” all the industries are involved. and it means work. what i'm suggesting here is that we have one last surgeof massive employment involving semi-skilled, unskilledprofessional and conceptual labor. we have to build outthis smart infrastructure.
robots aren't gonna do this. we have to take the entire energycomplex of the united states. think of all the infrastructure and all the technology,all those stranded assets. we have to convert all of that infrastructurefrom fossil fuel, nuclear to distributed renewable energy. we have to retrofitevery building in the usa. that's whatwe're gonna do in europe.
because you can't install the renewable technologiesuntil the buildings are efficient. that means huge jobsfor energy service companies and for the constructionand real estate industry. robots won't put in the insulation, and the new windows, and the doors. and then we have to install allthe renewable energy technology. human beings have toinstall that technology, and all the smart technologiesthat monitors the equipment,
and puts in thedigital advanced meters. we have to take the entireelectricity grid of the usa, which is dumb, servo mechanical,embarrassing â€”it's 60 years old;it barely functions. and we have to transformthe entire electricity grid to smart, digital so that we canmanage these three internets. this is gonna requireprofessional talent and unskilled and skilled laborfor two generations.
we have to take the entiretransportation grid of the usa and turn it from dumb to smartroad, rail, water and air. who's going to installthe thousands of charging stations in all the buildings? fuel cell outlets?smart sensors? this requires human beings. this means two generations of workand guess what? it's financed by the paybackof the energy savings. you don't have to have hugegovernment involvement here.
you simply have tohave the enablement, so energy service companiescan be set up, and we transform every buildingin the usa to a node. these nodes then connect, and they are the big data centers. they are the micro power plants. they are the transport hubswith electric charging stations. the nodes connect like wi-fiand all those nodes, those buildingsâ€”homes, offices, factoryâ€”
that's your internet of things. that's a huge jobfor the construction industry and you pay backby the energy savings. you can't default on the loans. but the technologydoesn't do it alone. we have to change consciousness. i'm only guardedly hopeful. you know, i'm not naive;i'm guardedly hopeful. i think that what i've saidis really a tough challenge.
but i'm guardedly hopeful because human beings are the mostsocial creature on this planet. when we get the story right,we move quickly. i'm always amazedwhen i fly and i see electricity gridsacross continents, and highways and urban centers. and i think, "my god!that was all done in 50, 60 years?" it's amazing! when we get the story,we move quick.
we're a very social creature. they're coming together,these three internet's â€”communication, energyand transport internets on top ofan internet of things platform. it changes the waywe think about life. chapter seven:a new consciousness for a new era let me give you the best example. we've got millennial parents nowthat are sharing toys on these millennial websites,
where you go up andyou pay a subscription fee, one time and you're in the system. then you can get a toyâ€”any kind of toy you wantâ€” by age category,and give it to your child. this is creatingthe real revolution. the parent traditionallybrings home a toy. and they say to the daughter,"this is not christmas." "santa clausdidn't get you this toy." "we bought this toy at a storeand we're giving this toy to you."
"this is your property." "this is not your brother's toy,and this is not your sister's toy." "this is your toy." "you need to take responsibilityfor it and take care of it." "what did mom and dadjust say to me?" the first thing i caught is, "this isn'tmy brother and sister's toy." that's pretty relevant. now, status, power, negotiability.
"i'll never letmy siblings ever use this, unless they pay the price." they're learning possessionof property and markets. there's nothing wrong with that. but now, on thesetoy-sharing websites, parents arebringing home these toys â€”and pretty soon they're gonnacome in a driverless drone at near zero marginal cost. now the parents aregiving this toy and saying,
"another little childplayed with this toy, and she had a lot of fun with it and she really took good care of it 'cause she knew one dayyou'd want to play with the toy." "and we hope youtake good care of it 'cause one day another childwill wanna play with the toy." what the child is learning nowis this toys not a possession, it's not status, it's not power,it's not negotiable. it's simply access to an experiencefor a moment of time,
then another child gets to use it. they're learning how to bepart of a circular economy, where we distribute thingsin the sharing economy over and over and over. nothing goes to the landfill. i like a system where you haveboth opportunities. there's nothing wrongwith being property. there's nothing wrongwith having possessions and some status, but it's alsonice to have another option
where part of her lifeis being able to access an experience in time, andthen share it with someone else. i don't think capitalismis gonna disappear, but i think it's gonna find valueby creating a relationship, so that it finds value with the child that gave birththrough the sharing economy. and, right here in this room,you are already in two economic systemsday to day right here in brooklyn. part of the day,you're in the market.
you're sellers, you're buyers, you're owners, you're workers, you're producing goodsand services for each other for a profit in the marketplace, and you have property. but part of the dayyou're in the sharing economy. you're sharing virtual goods,entertainment, news, social blogs, wikipedia. and now energy and car sharing.
and, while it hascapitalist parts to it, it's also a sharing economywhere you can reduce the cost. and, by 2050, we will havetwo mature systems: part of the day, capitalist market, with a profit margin producingand selling to each other; part of the dayin the sharing economy beyond the market, freely producing goods and servicesfor each other. that's already started.
that is not gonna go away. your generation is movingfrom ownership to access, from markets to networks, from consumerism to sustainability, from market capitalto social capital. does this all sound familiar? it's a revolution. none of this is being taughtin the schools, by the way. that's why this isreally a revolution.
and there are three thingsthat i've noticed that give me some guarded hope. there's a basic change going onwith you people in this room. it's strange to older people. there's a change in the wayyou define freedom. the way you define power. and the way you define community. and these changes reallysuggest the real revolution. for my generation,and generations before me,
freedom was very simple,since the enlightenment. to be free,in enlightenment perspective, is to be an autonomous agent. to be self-sufficient.to be independent. to be not beholden to others. to be an island to oneself, so that one can have freedomas exclusivity. for the millennial generationthat grew up on the internet, autonomy is death.
being an island to oneselfis death. because for your generation you ask the question, "how can i flourishto the full extent of my possibilitieshere on the planet?" and it's clearthat your answer to that is "i flourish to the extentthat i'm embedded in network after network, after network; community after community,where i can share my talents.
and those talentscan benefit the network and come back to benefit myself. i'm free because i have access." and, for you,freedom is not exclusivity. it's not being an autonomous agent. it's inclusivity. it's access to others in networks. do i have this right? this is very alien to our generation.
we may have to changeall the constitutions in the world. this is a completelydifferent idea about freedom. you have a different sensibilityabout power, which makes the older generationvery nervous. we essentially believe that poweralways has to be a pyramid. it goes from the top down.that is power. there's no other wayto define power. it's a pyramidâ€”from the one to the many. but young peoplethat grew up on the internetâ€”
it's strange because you grew upthinking that power has to do with the networksyou're engaged in. for you, power is not vertical;it's lateral. for you, power is being a meshin network after network where you benefit each other. open source. this is so strangeto our older generation. we do not havethis notion of power. it makes no sense to us, actually.
but it makes total sense to you. and, finally,i think most importantly, we're seeing a change in the way a younger generation perceivesidentity to community. i grew up in a post westphalianworld, the nation-state. we were very clear on community. that is, each individual is bornto be an autonomous agent and we're each sovereign. we are each a sovereignto ourselves.
and each of usas a sovereign to ourselvesâ€” we compete withother sovereign individuals, in the marketplace, for scarce resources,in a zero-sum game. our nations represent usbecause they are sovereigns. and they represent all themillions of individual citizens who are sovereignsagainst other nations. and each nation then competeswith every other nation for scarce resources in themarketplace of the battlefield
in a zero-sum game. that's the post westphalianation-state world. here's my question: does anyone here believe that we're gonna be able to address climate change andbring the human family together and take our responsibilityfor our fellow creatures in the earth we live inwith that worldview? anybody?
what we're beginning to seewith millennials â€”and i don't wannaoverstretch thisâ€” but i'm beginning to sense a shift from geopoliticsto biosphere consciousness. just beginning to see it. i hope it doesn't go away.i don't think it will. the biosphere is that 19 kmfrom the stratosphere to the ocean, where all lifeand all the chemicals on the planet interact to maintainthe ecosystems,
the biology of the earth. we're getting 14-year oldscoming home with biosphere consciousness. they're becomingthe biosphere police. we got young people coming homeand saying to their father, "why are you using so much waterhere while you're shaving?" "can't we turn it offonce in a while?" "we're wasting the water." they're saying to their parents,
"why is the little red lighton on the tv?" "we haven't been in that roomfor three weeks!" wasting electricity... "why are there two carsin the driveway?" "why can't we at leastcar share one?" and this is the onei'm particularly fond of. it brings a smile to me. we actually have young peoplecoming home and, at dinnertime,they're asking their parents
where the hamburger came fromon the table. yes, i'm sure some of youhave this experience. they're saying,"did that hamburger come from a rain forest?" "did they have to destroy the treesfor four little inches of topsoil, which only gives youthree years of grazing, so that that cowcould become my hamburger?" and when those trees are destroyedfor the topsoil to graze the cow for the hamburger,
the kids aresmart enough to understand â€”the high school kidsâ€” that those trees harbor rarespecies of plant and animal life that only live in those canopies.they go extinct. and then they connect the dots. if the trees disappear for the soil to graze the cowfor the hamburger, those trees are not there to absorbcoâ‚‚ from industrial emissions. and that means thetemperature the planet goes up.
so then, a mother cannot feedher children if she's on the farm, because she's gettingspring floods, summer droughts, and wildfiresbecause of the hamburger. these kids are learningecological footprint. junior high school. and they're coming home. they're beginning to understandthat everything each of us does, all day long,even when we're sleeping, intimately affectssome other human being,
some other creature, and the planet we live in. this is so alien to the wayyour previous generations grew up. you're beginning toconnect the dots and say, "we live in an indivisiblebiosphere community; there's no escape." "this isn't just academic:our well-being depends on the well-being of the wholesystem and all the creatures in it. we have young peoplewho are beginning to extend
their empathic concernto the rest of the human family, because you're all skypingon global classrooms. heckâ€”a billion of you on facebook. that's the largest fictional familyin history! and what's promising to meis that part of this generation is also beginning toempathize with our fellow creatures. not just the polar bearsand the penguins on the poles, but all of our fellow creatures.and i gotta tell you, my wife and i are into animal rightsand animal protection.
our fellow creatureshave a right to be here. we do not have a rightto end existence for them. this is their planet,as well as our planet. so i think we're beginning to seea shift the notion of freedom. how we perceive power,our sense of community. we're heading to a biosphere frame. this is all good. let me be clear on whyi've been doing this work. i'm terrified about climate change.
i began working on energy issuesâ€”it was in 1973. and wrote a book, "entropyon climate change," in 1980. i thought we had more time. i did not anticipatethe feedback loops. we couldn't even see themuntil they came, and then each feedbackdecreased ten more on an exponential curve.and we just didn't see it. we thought linear. now we're really scared.
i'm gonna tell you,we are really really scared. 'cause now we're in a runawayexponential curve on the water cycles.we didn't see it. the fortunate thing is,we now have a new infrastructure paradigmâ€”a 3rd industrial revolution. that can allow usto move off carbon quickly, in three decades. we have the technologythat allows us to do this, because zero marginal costis the ultimate metric
for reducing ecological footprint. if people equippedwith a little technology are constantly findingnew analytics and apps to increasetheir aggregate efficiency at whatever value chain they're in, it means we're usingless of the earth and getting more out of it. in other words, moreof the energy and materials gets into the product,less is lost.
then, if what we do produceis shared â€”share the cars, share the homesshare the toysâ€” we're distributing acircular economy over and over. nothing needs to goto the landfill. every resource isalways there for us. if we move to the energy internet,there's no reason why everyone on this planetshouldn't be producing their own green electricity,right where they are at very low costin 25 years from now,
on this exponential curve, and sharing acrosscontinental energy internets. and if we go to a car sharing,driverless transport grid, we can eliminate80% of those vehicles that have takena big hunk of the earth to put online. this is a planand what we've doneâ€” a lot of businesses are workingwith us around the world on thisâ€” and we say to people,"if you have another plan,
step forward and tell uswhat it might be to address climate changeand move the economy." and i always get silence. 'cause the only other planis to stay where we are and that's taking usto an economic crisis and an environmental abyss. but here's what i'd like to do: i'm gonna turn it over to you. let's think about your sensibilities
and find out if we cancome to some common ground on how we can begin to move thisfrom this little room out to all the larger communitiesand networks are in. is that a deal? who wants to start? hello, my name is lena. and my question will be related totechnological unemployment. what is your take on that? we are moving toan automated world.
there's no doubt about it. however, as i said during the talk, we've got two generations ofmassive employment, that's clear,to lay out this infrastructure. that's gonna requiremillions and millions of jobs. we know this on the groundas we're laying this out in europe right now. it's a huge amount of jobs. robots can't do it.ai can't do it.
this is infrastructure shift. however, as this smart digitaleconomy and society moves in, it can be run by very smallsupervisory workforces with analytics, big data,algorithms and apps â€”that's why we call it"smart world," "smart society," "smart economy." then, what do we doonce we have the smart society in and it's automated,running by analytics? we're not gonna pay peoplejust to do nothing.
we already knowwhere the employment is going. and that is, as we continue to automatethe market economy, employment is shifting tothe nonprofit social economy and the sharing economyâ€”we already know that. the nonprofit sectoris the fastest growing employment sector right nowin the world. it's about 9.5, 10% of theamerican employmentâ€” paid employments and nonprofit.
why is it heading there? because, in the social economy,the nonprofit economy, and large sectionsof the sharing economy, social capital is as importantas market capital. and, in this realm â€”the nonprofit realm,the social economy, the sharing economyâ€” it requires human beingsengaged with other human beings. machines aren't only supplemental.
we will never have a robot raising a child and interactingwith them in a childcare center to develop their brain.it's never gonna happen. they may bring the lunch to the kidâ€”the robotâ€” but it's gonna require human beingsworking with those children. and whether it'sin parts of healthcare and the knowledge industries,in cultural areas, humans with humans. the only other question is,
how does this sectorsurvive financially? johns hopkins university does a study of nonprofitsin 40 countries every few years. and guess what they found: over half the income for nonprofits which are one of thebiggest employers now, comes with fees for services. if you're doing health research,you set up a health clinic. you get fees for services and then
you can continueto do your nonprofit research. if we get anyof this transition right, we automate the market, we move to social capital where we can use our mindsmuch more expansively, so we can learn to liveas a human family and steward each othersteward our fellow creatures, steward the earth. that's a much more noble mission.
i believe that in order tocreate a better tomorrow, we also need to look atrehabilitating our psychology. yeah, i'm in agreement with you. you know, and i have to say,our academic disciplines â€”i'm gonna step on more toes. the academic disciplines inour school systems are so moribund. it's dysfunctional. we have an internet generationthat lives one way of life in terms of their mindoutside the classroom,
and another inside the classroom. in the classroom, for example,when we think about education, the first thing we realize is the classroom looks a little bitlike a factory. these big, giant institutions. and the kid comes in therein 1st grade â€”a little boy or girlâ€” and they immediately realize there's a central authorityof the teacher,
they have to be silent, if they share knowledgewith each other it's called cheating,and they're expelled. and they learn thattheir mission is to be efficient, but only in the sense of beingable to have the skills they need to follow orders andtend the machinery of the industrial revolution. yet, an internet generationout of schoolâ€” you're all sharing knowledge.
the whole point of the internet isto share your talents and skills, open-source,no intellectual property and begin to crowdsource theknowledge of the world together. that is so different thanwhat you're getting in school. so let me say one thing about this. you know what we're doingin northern industrial france? all 7 universitieshave come together and 200 high schools, and the universities are led bycatholic university of lille.
here's what they've done: all faculty now teachinterdisciplinary so that you learn various perspectives and there's more than one wayto look at things and you have toshare a common language. no silence. secondly, all the students noware put into modules, in teams,and they work with their teams and the students have toteach each other.
the teacher becomesa facilitator and a guide, but the students have toteach each other. if they share knowledge,it's goodâ€”it's not cheating. then they learn thatknowledge is not power and something one possessesat the expense of the other. knowledge is the shared experienceyou have as a social being. and the learning now is clinical. what's the good of learning if theory isn'tbrought together with practice?
so their learning is clinical. they've taken service-learning,which you all did here, and they've elevated to pedagogy. so whatever you're learning, you have to apply itwith your fellow citizens in the neighborhoodswhere these universities are. how do you like that? catholic university of lille. that's the revolution.
i believe in the darwinian theory of humanity beingmore darwinian than utopian. what would you do aboutbasically corruption and fraud? let me be very clear:i am an anti-utopian. if you read my books,i don't believe in utopias. i don't like utopias.i think utopia is are dangerous. our human spirit,the empathic spirit, is designed to show compassionto our frailties â€”our precarious existence.
an empathic world isnever a utopian world. utopias areworlds that are perfect. there's no mortality, there's no pain,there's no suffering, and every moment is perfect. there's no such world. i looked through historyand it says that the most civilized societies are the ones that canmove empathy to larger reigns.
and there's a history of that,of empathy. so i like an empathic world where we understandeach other's frailties, we show compassion witheach other's desires to flourish, we reach out to each otherâ€”and we do this every day. and when someone that we knowis in joy, or pain, or sufferingâ€” we do this with our fellowcreatures that are in trouble. it's the empathy that runsday to day life, not utopias. and i think george frederick hegelgot it right.
he wrote a little passagethat i read 40 years ago. he said, "happiness arethe blank pages of history, because they arethe periods of harmony." i thought, "what does that mean?" over and overi kept thinking of it. well, he's right because,when you read historians and you read their view of history, you think we're prettypathological creatures. because historians always chronicle
the mayhem,the genocides, the wars, the redress ofsocial grievances because those momentsare extraordinary, not ordinary. they imprint a stamp on us,they move us to fright and flight because they're so extraordinarytheir remembered for generations. but when you then chronicleall of history as if it's a series of these very verydysfunctional episodes in life, you get a pretty dire pictureof the human race, correct? happiness of theblank periods in history,
where most of us, as we evolve our empathic concernsto larger social units, our day-to-day life isreaching out to each other in some ways to help,to show our concern, to provide our compassion. it's not the fewâ€”we do this as the multitudes. i'll give you an example:cooperatives. you never hear aboutcooperatives in business school. there are banking cooperatives,and housing cooperatives,
and agricultural cooperativesinstruction cooperatives. in some countriesthey're the largest banks. they're the social housing. it's never mentionedin business school, because it's a different form. it's people coming togetherand sharing their destiny. this is the true sharing economy:cooperatives. and that's whythey're the engine, the vehicle for the new sharing economy.
but they're never mentioned. societies that are able to nurturethe empathic sensitivities that are in our neural circuitry are the ones that don't haveto worry as much about the secondary drives, which are brutality, and corruption, and allthe bad things that go with them. so i have a little bitbetter picture in my mind of the evolutionof the human race. what i'm suggesting isthe next stage is
biosphere consciousness. as we begin to see climate changeimpacting our entire community, and there's nowhere to escape, we begin to realizewe're part of that community. and so we're gettingour younger generations beginning to empathize with our fellow human beingsand our fellow creatures in one biosphere. this is a hopeful narrativeof the human race,
with all thedark periods in between. so i hope you leavewith that messageâ€” at least i believe thatthe history the human race is to overcome,and to transcend ourselves, and to empathizein larger social units until we see ourselves as partof one life force on the planet. i'm tony. i think you might becoming up against something with these new corporate agreementsthat they want to force on us: tpp, ttips and so on.
but they do seem to containprovisions that would put corporations that areat an advantage over governments â€”over elected governments. well, let me give youa counter pose: there's another kind ofagreement emerging with very different politics. president xi and premier liintroduced an idea called "belt one..." "belt one road"â€”the belt and road initiative. this is a very different initiativebecause here's
the us trying to isolateâ€”if you willâ€”china with its specific agreements;corporate led. and the belt road initiativeis the idea of resurrecting the old silk road,from shanghai to rotterdam. but it requires adifferent sensibility. originally it was designedjust to get a railroad across the hinterlands, crossingthe stands all the way into europe and the mediterranean, a route around the southern edge,and italy.
but then it quicklyescalated to a conversationâ€” wait a minute!europe's doing "digital europe," the internet of things platform, 3rd industrial revolution,and thatâ€” it not only will be in the eu,but our partnership regions in the mediterranean. that's a billion people market: 500 million in the union, 500 million inour partnership regions
in the mediterraneanand north africa. china has a similar plan thatwe've worked with with them. it's identical, called"china internet plus." so the conversation quicklywent to, "wait a minute! europe is china'slargest trading partner. china is europe'ssecond largest trading partner. how about a belt road initiativefrom shanghai to rotterdam? that's now in deep conversation, but it requiresa different sensibility.
no one can control the internet of things platformscentrally, because it's designedto be distributedâ€” that's the resiliencyof the system. and so that, if anyone power or any nationacross the region, you know, is going totry to control it from the top, you can't do itbecause you can go off-grid. and i think allthe parties are aware of this.
and in my dealingsin beijing, in brussels, in berlin, they're aware thatthis is a new partnership. it requires collaboration.you gotta share. you gotta share best practices. you gotta sharethe science and technology. you gotta get over the suspicionâ€” everyone benefits in a network. that's theâ€”it's not geopolitics. it isn't, "we control. we close.and then we overpower you."
it doesn't work inan internet of things world. you have to have it borderless.it has to be open. it has to allow youto have a distributed ability to go off and onwhen you want, and have block chains. so, i think this belt road initiativeis quite interesting because it may not just be for eurasia. this may be a vision that would be,for a millennial generation, a vision that could movefrom the americas,
from canada and the united statesdown to chileâ€” then you have really a distributed biosphere infrastructure revolution, not a traditionalgeopolitical revolution. and, therefore, it requireseveryone to be involved, because everyone's a player. my name is denille.how do you see your vision and what you've been talking aboutaffecting large food systems in industrialized countries,as well as developing countries?
you know how much energythe agricultural system uses? about a third of their costâ€”our energy costs. the fertilizers;those are fossil fuels. the pesticides;those are fossil fuels. the machinery;it's all run by fossil fuels. the packaging, the plastics;it's made out of fossil fuels. the water that theyhave to bring in to irrigate, the electricity grids; run byfossil fuel and nuclear power to move the water.
so, if you wannatake a look at agriculture, it is a huge player.not only that: the fertilizersemit nitrous oxides, which are much more potentin terms of their impact than coâ‚‚. you know that 40%â€”i believe it isâ€” of the land that's usedfor agriculture in the world today is to grow feed for animals? it takes at least 8 pounds of feedto create 1 pound of beef. that makes the transport industrylook like super efficient.
it's the most inefficient systemwe know on the food chain. if you look at pure injustice, you'd have to say the shiftto a feed grain animal culture and a chemical farming culturefor pasturing animals is one of the great injusticesin the history of the world. some of us live high upon the food chain; the rest are deniedaccess to the land. we got to turn that around so, in europe, we are interestedin organic agriculture.
we're interested in moving frompesticides and chemical agriculture to ecological agriculture, where we learn to live withthe surrounding flora and fauna, and we find ways to encouragethe flora and fauna to be able to be compatiblewith what we're growing. in the old chemical world,if it moves, kill it. everything surrounding your cropsshould be killed. so we live in a chemical wastelandacross the agricultural fields with runoff poisoning our water.
it sounds shameful. so we wanna moveto organic agriculture. we had mechanical agriculturein the 1st industrial revolution. it started late1st industrial revolution. we had chemical agriculturein the 2nd industrial revolution. we need to have smart, organic,ecological agriculture in the 3rd industrial revolution, and we have to bring backregional and local agriculture that supports local communities.
it's absurd to shipa tomato around the world. ridiculous! hi, i'm rochelle. i was wondering if you could talka little bit about water. and how water plays into thisdecentralized vision. how the privatization of waterplays out. i was just hopingyou could speak to that. there's only a small amountof water on this planet that's available for human reuse.
less than 1%;the rest is not available. there is a deep nexus betweenenergy and water that's never, just never explained. you have to have energyto move water. and that is that 8% of all theenergy we generate in the world â€”powerâ€”goes to extracting water, treating water, moving itthrough pipelines in water, and recycling the waste. but you need waterto move energy.
this isn't well known. and, that is,the energy industry usesâ€” over half of all the water we usegoes to the power industries. of all industries, over half. and this will surprise you: in france,which is 80% nuclear power, you know how muchof the water they use for cooling off nuclear reactorsin france? almost 50% of all thefresh water consumed in france
goes to coolingthe nuclear reactors. yeah, and when thewater comes back, it's heated. so it's dehydrating ecosystemsthat are already facing drought for their agriculture. and now, sometimesthe water is so hot because of climate changein the summer, they can't even use itto cool the nuclear reactors and they have toslow down the electricity. so what's the nexus?
we have to begin to createa new plan, so that people get controlover their water in a distributed system thatbrings water together with energy. i'll give you an example of why: if the electricity grid is disruptedâ€”let's say one of the transformers, big electricity transformers,either through cyber crimes, cyber terrorism,or natural disaster goes down and your power goes downâ€”there's no water. we're dead in three weeks.that's how vulnerable system is.
that's why we haveto build in resilience by keeping it so distributed. i'm in hauts-de-francea couple of weeks ago. this little startupâ€” they've taken a wholesocial housing complex, huge housing complex. they took the whole roofand turned it into a cistern. why did they do that? because the water falls,and as it falls,
it generates electricityin a turbine. so they're using for electricity,but now we're saying, "use it as a cistern." so if the power grid goes outand you can't get water, you're dead in a couple of weeks. you have the water right built-into your home office and factory, on the roofs or nearby,you can share it in a cooperative. and then that water can be used,potable for fresh water. and then we're now talkingwith companies about...
with housing,that you can take the water, use it for your toilet water, and you will be able to recycle itright back on site. so you can go distributedand decentralized when the real power grid goes out. they key to maintaining this systemis it's distributed. if anything happensin one part of the system, you can go off. well distributed and decentralized,and share your water,
share your energy. so water and energy go together,and you've just hit â€”and i'm glad you said thisâ€” something that has really come tothe top of the agenda for us now: how do we create adistributed water internet to go side-by-sidewith the energy internet? very cool thinking. my name is elizabeth andi just have a question for underdeveloped countries.
how do they play a part in thiswhole 3rd industrial revolution? can they sort of skip the gun, because they don't havean established infrastructure? yeah, you just answeredthe question i was about to answer. very good!well here's what we realize, just what you said. what we finally realized isin the developing world, their liability is their key asset. their liability is:they have no infrastructure.
that's their asset. because, it's easy to buildvirgin infrastructure, with new codes and regulationsfrom scratch, than to take an old infrastructure with old codes and regulationsand transform it. so what we're learningin the developing world is this can move more quickly. we saw the opportunitythat the developing world can leapfrog right past
the 1st and 2ndindustrial revolution into the 3rd. so the united nationshas now embraced the 3rd industrial revolution narrative that we've justtalked about tonight. the biggest problemin the developing world: no electricity. ban ki-moon has made thishis pledge: universal electricity. we got a billion peoplethat have no electricity. they're in the dark.
we have 40% of the human racewith infrequent, not reliable electricity. and what keeps womenenslaved in this world? it's no electricity. and what we seewith these big families, in these patriarchal,brutal conditions, and male-oriented cultures?no electricity. why? because, with no electricity,women are the slaves, the children of the slaves,more children, more hands on deck
that can actuallycarry the energy load. we forget the relationshipbetween electricity and freeing women in the west. women were the slavesat the hearth until electricity came in. electricity freed womenfrom that slavery, if you will, to go to schoolbeyond the first 5 grades, and then electricitycreated new skills that didn't requireupper-body strength, but up here.
electricity revolution createdall sorts of new skills. and, when that happened, as women became more educatedand more independent, and had the new skillsof the 2nd industrial revolution? fewer babies. you can give outmillions of condoms; it'll make no difference, until you bring electricityinto the developing world, free the women,and you have them get educated,
and have them be recognizedas half the human race. and what's interestingis the women are setting up these micro gridsâ€”a lot of it. so, you see it in rural africa,they go into a village â€”it's happening in india, tooâ€”and small startups. they come in, they leasea solar panel on each roof. they give you a lease, andthen they give you a cell phone. this is happening all across ruralindia and now sub-sahara africa. but instead of a big centralized gridthen you go village, to village, to village
and you create micro gridsthat are laterally scaled. this is going to take offvery, very quicklyâ€”it already is. this is the smart social entrepreneursof the next generation. this is why i'm really pleasedto see this happen. it brings confidencethat we can do better. i'm ray, and i've been thinkingduring your whole talk about how do we overcome monopoly? we have to worry abouta new kind of monopoly. now, i'm gonna be honest with you:i love google!
it is the magic box! i'm now so lazy thatanything that comes up, especially in my age,i ask the magic box. it is a great research engine.however, when everybody needs google,and it's the only research engine, and it's our windowto the research we need, it starts to look likea global monopoly, and it starts to look likea public utility. what did we dowith successful businesses
that had a product linethat was so important that everybody needed it,and it was a public good. what did we do inthe 2nd industrial revolution with the telephone industry? we, in americaâ€”in other parts of the world, the governmenttook over a lot of itâ€” but in america we kept themin the private sphere, like at&t, but we regulated them as utilities. and we did this acrossthe electricity utilities,
the many of the power utilities.we regulated them. i think it's naive to believethat we won't do this. the millennials and your childrenâ€”this is the new political movement. you're gonna be asking the question: how do we get the bestout of these new enterprises, but they have to be regulatedas public goods, in the realm, so that we all we all ensurethat we get equal access, that we have some controlover our creative content and data, may be through block chains,
and that we're ableto secure our privacy, etc. facebook? same thing. when the whole human familyhas to come together on facebook to communicate with each other,it's a great service, but it looks like a public good,it's a utility. and we're gonna have to havesome kind of global authorities to regulate them.does this make sense? this is the politics of your generation. this is the politics of the new3rd industrial revolution.
hi, i'm carlin. in the wordsof your wharton alumni, how do we make america great again? let me say somethingto take us from another corner. president obamawanted a green economy. he spent billions and billionsof dollars of our tax money for a green economy,and we don't have a green economy. why did this happen? because the mentalityhere in this country is all we need to do isuse tax money to incentivize,
'cause we want a million steve jobs. so, what happenedwith president obama is he would incentivize, givesome money to a solar factory here, a battery factory over there...incentivize. but you can't start with that. you have to start with incentivizingthe infrastructure itself, which requires everybodycoming together. now, he madea very famous statement during his secondpresidential campaign,
which got to the heart of it. you may recall thathe was speaking of small businesses and he made an offhanded commentsaying, "you didn't build that." remember this comment?it went viral: "you didn't build that." and they went they went nuts. he was referring to infrastructure, and he was trying to saythe infrastructure comes first. then you can createyour new businesses with it. the problem is, they went viralbecause the small business said,
"no, we create america!it's the entrepreneurial spirit!" we've actually sodummy down our country that we actually have no idea how businesses feed offthe infrastructure that come from public-private partnerships: government, industry,and civil society. who do they thinkcreated the public school systems, so that we could trainthe workforces? private businesses didn't do that.
who laid out the interstate highwayswith tax money? you think private businesses willlay out an interstate highway system with no lights from coast-to-coast? who under wrote all the pipelinesthat had to bring in the electricity, the gas andthe telephone industry? on and on and on...in fact, let's look at steve jobs! the fact is that most of the researchthat went into his smartphone was government-funded research;he marketed the product! but we've so dummy down
that half the country or moredoesn't want the government to do anythingâ€”they don't even want the government. this is the failure of the usa. we do not have asocial market economy. europe does;other parts of the world do. but, in america,we have this whole idea that it's justthe entrepreneurial spirit. let the companies rule,let the marketplace reign. this is our death now.
because, if we can't work togetherin each county, in each state with business, civil society,and academia, to lay out this platform and create the regulations codesand standards, then the new businesses come,then the new models plug in. so what i'm saying is,look to the infrastructure. and your millennial generation, it's up to you now to bring thissense of a social market economy back into the dialogue.
we need government,we need business, we need the civil society, we need public capital,we need private capital, and we need social capital. all three equal playersat the table. so, here'swhat i will say in closing: i know you get frustratedand sometimes you think, "my gosh, it's going too slow!" but now's the timeto redouble your efforts.
we all have toreally come together. we've got one generationâ€”yoursâ€” to lay down this new consciousness,this biosphere for consciousness. your responsibility to carry this on is the weight thatno generations had in history. i don't know ofany period in history where one generation wascalled upon to save the species. and, if you believethis is really happening, and it is, this is actually the responsibilityof the millennials in this room.
we now have, i think,potentially a road map and a compass. it's gonna be up tothe younger generations now. this is the digital revolution. you are the digital revolution.it's your turn. it seems to me,if the millennial generation is ready to create thisnew digitally connected world, it helps us create peace betweeneconomy and society and the balance for the planet.it should be now. and what you have to do isyou have to join together
in the virtual world,in the physical world, on the ground, in the communities, both in the infrastructureand the politics, and the social engagement. you got to make this happen. i'll give you one little mission: how long is it gonna takefor a millennial generation to prepare a bill of particularsfor a declaration of human responsibilitiesand stewardship of our human race,
our fellow creaturesin the planet we live in? and then you havea billion young people in a cohort in facebook,and they're all declaring this, then you're at the table. you're at the table,virtually and physically, and then a billion people strong, you should be able to do thisin a very short period of time. this doesn't takea lot of organizing. then you're at the table,with the new potential monopolies.
you're at the tablewith the governments who would purloinedthis for their own ends. you're at the tablewith the special interests â€”they want to drag us backto the 2nd industrial revolution. come to the table.make it happen. pass on this legacy, so when your grandchildrenlook back at you they can say you did the right thing: you helped replenish the planet,
got us off carbon, helped show our proper respectto generations not yet here, including our fellow creatures. thank you. good night. join us. â€”hi.â€”hi, i'm kelsey. i study design and technology.what i wanted to say is thatâ€” â€”you're at parsons?â€”no, sva. but, like,the real problem is that,
a lot of peoplewho have this passion and who, like,really do care about this stuffâ€” we're getting purchased out, and... â€”yeah.â€”so, the real thing is, like, everyone doesn't havethe same enemies. like, the people who really care, like, they're goingto be purchased, and they're going to end upworking for someone, somewhere, and they're gonna feel likethey have to compromise.
yeah, i understand...well, it's a delicate game every day. you know, as you get olderyou have to think about what isâ€” life goes really quickly. and, if one doesn't havethe commitment at 25, you're not gonna have it at 50. and, this time,we need a generation that can stay close to the missionall the way through their life, and pass it on to the kids. and i understand howdifficult this is. believe me.
hi! thanks for coming. thank you so much for thisâ€”very enlightening. â€”my pleasure.â€”is there any recommendations on how to get more involvedat a local level? brooklyn's ideal.brooklyn should be the place. absolutely! this is wherea lot of the startups are. i 100% agree with you. i interviewed like 30 peoplefor the documentary i worked on, including global dryden,and they all are optimistic long-term.
i'm only guardedly hopefulthat demographics is on our side. it's called "the millennials." millennial generationis more sustainable, more ecological oriented,but i think it's an uphill battle. as thomas paine said, "every generation must recreatethe world anew." the digital generation;you're there. do it! you don't need to look backat those who are our history. look to the future ofwhat you want for your children.
â€”hi! how are you?â€”i just wanna shake your hand. thanks for coming. so, zero marginal cost is possibleif the data centers are for free. â€”yeah.â€”we need it! well, you have, you knowâ€”it's wikipedia. they do nonprofit,they get contributions, it's tough, but they make itbecause enough people believe in it. or you look at blah blah car etsy. they've done it witha little bit commissions.
look at patagoniaâ€”they've become a benefit company. and they sayâ€”there are eight or nine states that passed legislation now saying, "look, if you're a benefit company, profits don't have to bea first motive; therefore you won't riskhostile takeovers. so there's a lot of stuff moving,but it's difficult. so are youâ€”i encourage you to do that. take some risk.don't sell out.
that's what i'm saying.