Jeremy Rifkin: opening of electronica The energy bubble – and what we can do

Jeremy Rifkin: »If the business models are based on the infrastructure of the second industrial revolution, they are stuck in a dead end; there will then be no big profits and no growth. It’s all a question of infrastructure!«

The biggest bubble in human history is forming in our midst. When it bursts, we will yearn for a return to the dot-com bubble.

This is the latest thesis by Jeremy Rifkin, the American sociologist, economist and publicist, who was born in Denver, Colorado, in 1945. He is also an advisor to the German Chancellor Angela Merkel and the European Union (EU). This year, he will hold the keynote speech at the opening of electronica 2018 in Munich. He is a great supporter and admirer of the German “Energiewende” (energy transition), which cannot be said of every foreign observer. This is due, in particular, to his theory of the biggest bubble in human history.

But first, the world is beautiful and according to Jeremy Rifkin, it will become even more beautiful. This is ensured by increasing networking – the Internet of Things (IoT) – which he already predicted early on. One of his theses is that because full networking eliminates marginal costs of production, then production in future can be cheaper than ever before.

Then people would be able to enjoy the products at prices that they can afford, and instead of work turn their attention to more beautiful things. In this way, so to speak, even capitalism could abolish itself painlessly. This is a brief summary of the future scenario, as he describes it in his book “The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism”, published in 2014. In any case, the fourth industrial revolution would have a major impact on our lives and could lead to a new economic order in which the common good would once again explicitly be at the forefront.

Jeremy Rifkin apparently has a feel for emerging trends and knows how to package and market them in excitingly written books. In his book “The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era”, published in 1995, he predicted that factory jobs would disappear thanks to the increase in productivity. The additional automation would also have its part to play. In 2002, he propagated the transition to “The Hydrogen Economy”.

Recently, he again caused a sensation when he warned at the St. Gallen Symposium that a global economic bubble had built up. This bubble is namely of production facilities for fossil fuel sources such as oil, gas and coal. Industry, investors and banks had focused their attention on this for far too long. These investments now lie idle, no longer create value and form a gigantic bubble.

How did he arrive at this assessment? He is convinced that we are in the phase of the third (not the fourth!) industrial revolution. Such phases of the revolution have always been associated with upheavals in communication, power generation and distribution, and transportation (mobility). In the first industrial revolution it was steam power, the printing machine and telegraphy, and the railway. These three upheavals worked together to create a new infrastructure and a new environment – and allow business models to emerge, as also shown by the second revolution with the telephone (including radio and television), oil and cars.

Today, we find ourselves again in such a phase with the internet, renewable energies and autonomous driving. Again, all three are interwoven with each other, on the basis of the Internet of Things (IoT). Suddenly, there’s not much money to be made if you only produce goods. The internet revolution – only one part of the third industrial revolution, which however already gives an indication of how it will take place overall – has already shaken up entire industries (music).

Those people, who have recognized the signs of the times, are transforming their business in the direction of service. Jeremy Rifkin’s example is IBM under Lou Gerstner: IBM shifted focus from hardware to computer services. In future, there will no longer be sellers and buyers, but companies that provide services, in other words: service providers, and users (who can now also produce by themselves).