Jeremy Rifkin, How Lateral Power is Transforming the World #CDD19

[Music] good morning everybody very nice to be here with you today first rule put all the cellphones away alright I'm gonna actually turn mine off right now okay we're all set I'm gonna start on a pretty somber note this morning and I hope it'll end up being a liberating reflection for all of you here in Geneva GDP is growing at a slower rate all over the world everywhere the reason this is happening is productivity has been declining all over the world for the last 15 20 years the result is we've got a lot of high unemployment especially among the Millennial Generation trying to find some decent work in a 21st century workforce our economists are projecting twenty more years of low productivity slow growth and let me do the numbers for you we've had two industrial revolutions in the 19th century the 20th century and here's where we stand today arguably half the human race all of us in the West are far better off than our ancestors were before we began this Industrial way of life is that granted I think it's also fair to say that 40% of the human race making $2 a day or less I'm not really appreciate we any better off than their ancestors were before we began this experiment and for the 1 billion people making a dollar day or less I think we have to say they're worse off and their ancestors were so while half the human race is done much better the other half of the human race is only marginally better the very wealthy among us have really really done well this morning the seven richest people in the world we could put them right here in this role seven people their combined wealth now equals the accumulated wealth of one-half the human population living on this planet that's three and a half billion people there is something so dysfunctional about the way the human family is organizing its economic and social life there's no precedent through this in history it's clear that the great industrial revolution of the 20th century is on a steep decline but now we have a more serious crisis after two centuries and two industrial revolutions were essentially they were built on the carbon assets of a previous period of history we went under the ground we dug up all the carbon remains organic remains of a previous geological period in history and we took those assets and we created the entire industrial way of life in the process we paid the entropy bill we have massive amounts of co2 spewed into the atmosphere and methane and nitrous oxide and it's as simple as this the Sun hits the earth and then some of the Sun tries to go the the raise the energy tries to get back out but it's hitting all those co2 molecules and the methane and nitrous oxide molecules and it keeps that heat back down on the planet we are in real-time climate change this is no longer a theory or a model or looming on the horizon it's here this morning in Geneva and all over the world what's terrifying about climate change has never explained to humanity because what I'm about to explain to you if we told everybody what this is in two minutes the whole human race this morning would be justifiably terrified and at the same time committed over the next three generations to save our planet save our species and save our fellow creatures here's what climate change does it changes the water cycles of the planet we are the watery planet our eco systems have developed over millions of years based on the hydrological regimes the precipitation that traverses the cloud covers and rains down on the ecosystems here's the rub for every one degree that the temperature's going up on this earth from industrial induced global warming emissions every one degree rise in temperature the atmosphere is sucking up 7% more precipitation from the ground the heat on the ground is forcing the precipitation into the clouds so we're getting more concentrated precipitation in the clouds and more extreme totally dramatic and completely unpredictable water events blockbuster winter snow seven eight feet in Boston that's the new abnormal we are getting flooding all over the world in every ecosystem across Europe Africa Asia of the Americas and we are seeing ecosystems on the verge of collapse infrastructure being destroyed and lives taken every year it's getting worse we are getting summer droughts and wildfires everywhere in the west coast of the United States and Canada every year millions of acres are burning we had 14,000 buildings in one city destroyed in one day from the fires this is happening everywhere that's the new normal we're getting category 3 4 & 5 hurricanes in my country alone Katrina and Sandy and Irving and Harvey every summer those hurricanes are destroying to Texas Louisiana Florida Mississippi South Carolina North Carolina the floods are so severe they can't make up for the last year in the new year and can't even rebuild this is the new normal our ecosystems cannot catch up to this shift in the water cycles and they're collapsing in real time because they depend on a fairly consistent water regime over millions of years our scientists now tell us we are in the sixth extinction event of life on Earth and it doesn't even make the headlines how many here actually know this I mean honestly how many know how many don't just honestly most people do not know and this is the most dramatic story the human race has ever faced this morning they just announced this morning a new study that the ice in the Antarctic that massive continent is melting at 288 times the speed they thought it was the entire continent the Arctic is melting the Antarctic sea water rise we've got over half the population in the world on coastal cities that will be devastated in the lifetime of your children as my wife says we're asleep the last time a current extinction event projects that we'll lose 50% of all the major life forms by the time some of you are my age the last time we had an extinction event of this magnitude was 65 million years ago and it took thousands of years not eight decades so what do we do we need a new economic vision for the world it better be damn well compelling and we need a game plan to deliver on it and it has to come quick the UN climate panel which is made up of all the academies of Sciences around the world issued a report in October saying we got 12 years left now should have done this 30 years ago we have 12 years left to transform the entire economic system the world out of carbon-based fuels across every sector or we won't make it because then we'll go over one and a half degrees temperature and then the feedback loops are gonna take us so what do we do we need to step back for a moment and ask them a pretty important question how do the great economic paradigm shifts in history occur we know how they occur we're gonna get a road map and a compass here in Switzerland and in every other country in the world that can allow us a speedy exit and hopefully a razor-thin path to decarbonize the world in less than 15 years it's theoretically still possible so how do the great economic paradigm shifts occur there's been at least seven major economic paradigm shifts in history they're really interesting anthropologically because they share a common denominator at a moment of time across the society three defining technologies will emerge and converge to create what we call in engineering a general-purpose technology platform and infrastructure that fundamentally changes the way society manages powers and moves its economic life social life and governance what are those three defining technologies through history number one new communication technologies to more efficiently manage our economic life social life and governance that's obvious right number two new forms of energy to more efficiently power our economic social life and governance that's obvious number three new modes of mobility and transportation logistics to more efficiently move our economic social life and governments when communication revolutions joined with new energy regimes new modes of mobility and logistics it does change the way we manage power and move our day-to-day lives it changes our temporal spatial orientation it changes our business models it changes our governance it changes our habitats it changes our worldview so I'm gonna give you two quick examples first Industrial Revolution Great Britain 19th century Second Industrial Revolution United States 20th century so the Brits take us into the first Industrial Revolution with a complete convergence of new technologies freaking energy mobility which changed the built environment the Brits invent steam-powered printing no more manual German print presses to slow steam power printing very fast so they can now produce massive amounts of textbooks for new public school systems emerging around the world and journals and newspapers and magazines and brochures for advertising etc then the Brits laid out a telegraph system the last half of that 19th century steam part printing in the telegraph those communication technologies converge with a new source of energy at the time coal from the hinterlands of britain and then the steam engine which was used to negotiate the coal energy they put it on railroad tracks for locomotives communication energy mobility manage power and move life 20th century Second Industrial Revolution the United States again communication energy mobility built environment by the way the first Industrial Revolution took us from agricultural living and small villages and a few large cities to dance urban industrial areas because you had hub to hub railroad traffic for your logistics Second Industrial Revolution the United States that telephone I know everyone thinks the Internet's a big deal in this room but you got to imagine this out of nowhere for the first time in history after two hundred thousand years on its planet we have a little device that allows people to connect with each other virtually and their voice travels across the ether to someone else thousands of miles away it was an extraordinary communication revolution later in the United States radio and television these communication technologies converged in America with a new source of energy cheap Texas oil wells they came in then Henry Ford put everybody in the internal combustion engine powered by that fossil fuel and we went from intent dense urban industrial life hub to hub rail to suburban life across roads and interstate highways and shopping malls and travel and tourism and everything else we know the Second Industrial Revolution took the whole world through the 20th century it peaked July 2008 some of you may remember that month and that month the price of Brent crude oil hit a hundred and forty-seven dollars a barrel on world markets that was a record the entire global economy shut down July 2008 that was the great economic earthquake of the Industrial Age from the 20th century the collapse of the financial market and subprime mortgage market a month later was an aftershock because you couldn't keep this fictional Ponzi scheme going on the mortgage market when the real economy turned down I was this the earthquake everything in this civilization depends on fossil fuels fertilizers pesticides construction materials pharmaceutical products chemical preservatives for the food synthetic fiber power transport heat light all of it so when the price of oil goes over 80 a barrel watch all the other prices go up when the price of oil goes over a zone of 110 a barrel watch prices start to slow down across the supply chains we are now in a convulsive endgame for an industrial age based on fossil fuels oil goes down to $30 a barrel now to wipe out their new competitor shale gas tar sands because they're not competitive under 40 and once they wiped him out two years ago in bankrupted den oil went back to 70 now shale gas is coming back and tar sand they're fighting each other for an endgame and wherever we have oil with the exception of Canada in the United States I suspect we have failed States or authoritarian regimes is anyone in this room here in Geneva this morning believe we are still in the sunrise at the fossil fuel era no yeah so what are we doing here let me share an anecdote with you when Angela Merkel became Chancellor Germany she asked me to conquer Berlin in the first couple of weeks of her new government to help her address the question of how to grow the German economy create jobs and move Germany forward the first thing I asked the new chancellor madam Chancellor I said how do you grow the German economy when your businesses are plugged in to a Second Industrial Revolution infrastructure of centralized telecommunication fossil fuels nuclear power internal-combustion road rail water and air transporting that infrastructure to manage power and move their economic life your social life and governance at infrastructure peaked in its productivity 15-20 years ago this is the key economists are wondering why is productivity lagging when we have all these new digital technologies coming on board correct why is it still lagging I'm gonna spend some moments on trying to explain why our economists are a little bit lost in traditional economic theory we like to say that productivity is based on better machines you need more capital for better machines and better performing workers but when Robert Solow won the Nobel Prize for economic growth theory in the 1980s he let this little embarrassing secret out that no economist wants to talk about he said actually when you trace the entire Industrial Revolution better machines and better performing workers is only 14% of the productivity whereas the other 86% come from we don't know are you shocked economists don't know that should be the one thing they do know here's why they don't know a little diverges when economics was penned in the late 1700s the vote was Newton's mechanics Newton's physics so everybody wanted to borrow his metaphors he had unlocked the secrets of the universe so the philosophers did the same thing you know Newton's law for every action there's an equal and opposite reaction does that sound familiar Adam Smith fouled that for the invisible hand for every action on the supply side there's an equal and opposite reaction on the demand side how about Newton's law body in motion stays in motion less disrupted sound familiar Baptists say the French economist barreled that for his theory that you know supply will stimulate demand which will generate supply which will stimulate demand and les disrupted the only thing wrong with using Newton's physics to define economics as Newton's physics has nothing to do with economics nothing except maybe friction economics is based on the same laws that govern the universe the solar system the biosphere the economy of Geneva and everything you startups are doing in this room today these are the first and second laws of thermodynamics the first law of energy in the universe all the energy that's been here in the universe has been here since the big bang nothing created nothing destroyed since the second law says true the Energy's always been here not created not destroyed but his changing form always but only in one direction from concentrated the Big Bang to dispersed through the galaxies from hot the Big Bang to dispersed and cold through the galaxies and from order to disorder through the galaxies entropy is a measure of energy still here not available to do useful work so there are three types of thermodynamic systems an open system exchanges matter and energy and matters of form of energy with the outside world a closed system exchanges energy but not matter and an isolated system doesn't exchange either we are B we get lots of energy for the Sun no problem but the fixed matter which is a form of energy it's been here since we blew off the Sun and cooled off all those smart Earth's are those rare earths and your smartphone's we're not getting anymore we get a little meteorite dust and cosmic dust here that's it here's what economics is about we take low entropy available energy and material out of the earth a rare earthy or smartphone a metallic or for the automobile fossil fuels we extract them ship them store them make things out of them consume them and recycle them at every step of conversion across the supply chains we have to embed and listen this for your business is a certain amount of energy and material into that good or service to get it to the next stage of what it becomes across its journey on the supply chains in the process we lose some energy material in every single conversion that's the laws of thermodynamics and it's called aggregate efficiency in engineering Agri deficiency is the ratio of the potential work to the actual useful work that gets embedded at every stage in your supply chain and that which is lost in the process here's the way it works in nature a lion chases down an antelope kills it devours it about 10 to 20% of the total energy in that antelope gets into the lion the rest is heat lost in the conversion that's its aggregate efficiency what does this have to do in my conversation of the Chancellor Germany she's a physicist by background I said look the United States started off the Second Industrial Revolution and 3% aggregate efficiency across its supply chains we lost 97 percent in every conversion right we got up to about 13 percent aggregate efficiency in the late 90s that was our ceiling in the u.s. nothing has changed Germany got up to 18 point five percent aggregate efficiency that was their ceiling ten years later nothing's changed Japan led the world at 20 percent aggregate efficiency that was their ceiling so I said to the Chancellor you can have market reforms labor reforms fiscal reforms you can stimulate a million Steve Jobs and startups it will not make any difference if they're plugged in to a Second Industrial Revolution infrastructure a centralized telecommunication fossil fuel nuclear power internal combustion transport because that infrastructure to manage power and move your supply changes value change in life productivity peak 20 years ago so on that first day with a Chancellor we discussed a third Industrial Revolution a new convergence of communication energy mobility and logistics to manage power and move Germany at the end of the day she said Jeremy we will have this for Germany and what I'm about to talk to you now this morning is what you're all doing here but you have to move it from silo pilot projects to an infrastructure to plug in we have a communication internet it's been 27 28 years since berners-lee created the world wide web we have three and a half billion people connected pretty soon the whole human race will be connected china now has a smartphone for $25 with more computing power than send our astronauts to the moon there are people now in the Amazon in villages with those little power those devices they have more power than guys in space all right now this communication Internet's moving to 5g big data and it's just now beginning to converge with a renewable energy internet here in Europe we now have millions of people who are literally producing their own solar in wind and they're sharing it off-grid or sending it back to the grid we now have millions in China where we're working as well doing the same thing and parts of the west coast of the United States and Texas actually in California now these two Internet's communication that to manage economic social life the energy internet to power economic social life in now converging with a third internet mobility and logistics internet made up of millions and millions of vehicles in the next 30 or 40 years they will be electric they will be fuel cell they will be powered by solar and wind electricity from the renewable energy internet they will provide the storage necessary for that energy internet and they will be guided by GPS in autonomous road rail water and air systems driverless these three Internet's the communication they're moving to 5g the renewable energy internet all digital eyes so that we can share energy just like we share information with digital technology and now the mobility and logistics internet so we can share our transportation logistics services with each other using the same digital technology as we use in sharing information news entertainment and energy these three Internet's to manage power and move life are now riding on top of a platform called the Internet of Things the Internet of Things is not the cloud it's the things so we're putting sensors across the entire landscape of the planet both the built landscape and named wild sensors in the agricultural fields monitoring the crops sensors in factories and in warehouses and in smart homes and it's smart vehicles and in smart roads they're monitoring big data in real-time and they're sending it to the emerging communication internet energy internet and mobility in it so all of us can better manage power and move our value chains whether it's families businesses or communities by 2030 will have ubiquitous interconnectivity we're creating essentially a pro fesus of the human mind and nervous system the mind is GPS and Galileo and it orchestrates and synchronizes the nervous system which are all the senses and they are embedded in the building stock the buildings are transformed remember I said first Industrial Revolution in dense urban life second suburban life the third every building becomes a node every building becomes totally retrofitted to make it energy efficient and then it becomes a distributed data center because we're not going to be relying on centralized data centers at Amazon and Facebook and Google and Alibaba every building will be a node it'll be a distributed data center blockchain and it will also be a micro power generation site for solar wind on or around the sites and it will be a charging stations for your electric and fuel cell vehicles then those nodes across the buildings connect up no delay across continents communication energy mobility Internet's on top of the Internet of Things this means by 2030 potentially a big leap forward for Humanity we can now connect the whole human race in real time at low fixed cost and near zero marginal cost this means a vast potential expansion of social entrepreneurial ISM on a scale we've never seen it means a comeback for cooperatives in a big way blockchain across regions and across continents it also means a fundamental shift in globalization the first in Second Industrial Revolution infrastructures the platforms to manage power and move economic life they were designed engineering wise to be centralized they were organized top-down they had to be enclosed in intellectual property to return enough investment to the capital capitalists that provided for it and they had to do that by vertically integrating economies of scale with giant institutions across the globe so we ended up today this year with 500 global companies they control one-third of the GDP of the world and they only have 62 million workers out of a workforce of 3 billion what's happening now as we move to a distributed system the new system communication energy mobility in IOT is decided to be distributed not centralized it works best if it's open and transparent open source so you get the network effect correct and it scales laterally networks wind block chains this is allowing us to move from globalization top-down to glocalization regions now in cities and localities are beginning to connect with each other all over the world because the fixed costs are low in the marginal cost are near zero and you can engage in supply chains value chains marketing advertising really extremely low cost this is a lateralization of power literally and figuratively power to the people the digital revolution so that's the basic framework so where do we go from here the third Industrial Revolution creates new opportunities but it also creates a lot of dangers there's the darknet and I want to tell you the darknet is as impressive as the bright net how do we deal with network neutrality when everyone's connected how do we ensure governments don't purloined this to hack the elections of other governments already happening how do we ensure Internet companies like Facebook Google Twitter Alibaba don't monopolize this infrastructure and commodify our lifetime value in data for third parties already happening how do we protect privacy how do we ensure data security how do we prevent malware or terrorist attacks how do we operate when there's climate change events that take down the system this is the darknet it's as impressive as the bright net and what we're going to need to do is spend 30 years in political struggle to ensure that these infrastructures are controlled as Commons governance in every region locality Commons governments public utilities they can be managed by private sector they can even be built but they can't be owned because this is the way we connect with each other to create a new world Commons governance lots of cooperative governments so let's assume we can deal with the darknet we're gonna have to build a lot of redundancy in the net so the more distributed the system they're less vulnerable you are to breakdown here in Switzerland so if there's a climate event or a terrorist attack you can go off the grid decentralized localized and then we a grenade and block change at any moment anywhere and when you can do that over the world no centralized attacks gonna get you so here's the bright net let's say you have a small and medium-sized enterprise or cooperative here in Switzerland you can already go up on the internet and you can see some of the data flowing through the system that you care about pretty soon you'll be able to see all the data if it stays open and neutral then you can strip the data you care about for your SME for your supply chain you have a lot of data you would like for your supply chain right you can strip it out of all the data going through that communication energy mobility IOT infrastructure and download it and then you can mine that data for your supply chain of value system with your own analytics create your own algorithms and apps so you can dramatically increase your aggregate efficiency at every step of conversion across your value chains and supply chains for your business dramatically reduce your fixed cost and marginal cost and be competitive in a globalized world that's starting to emerge in this room what's the problem is you're still in isolated pilots you haven't created the infrastructure the infrastructure is what's going to give you all the jobs in helping to create that infrastructure without the infrastructure you're dead in the water well then we have 9,000 cities that signed up for the climate change in Paris and I tell you they all have great projects they've got the hydrogen buses and they've got LEED buildings and they've got bike paths and nothing's happening because they haven't put in the infrastructure to plug into to manage power and move their value chains so we've already seen the impact of what this is potentially can do and that is that as we've moved this system into place it's basically changed in nature capitalism it's basically changed the nature of capitalism because then the fixed cost of digital technology are dramatically plunging and the marginal cost is near zero so that means when you're you know in economics we always teach our young businesspeople that the optimum market is where you sell at marginal cost all right cuz then you want to put out cheap products you want to win over consumers you want to bring a little the profit factory shareholders right so you always want to sell at marginal cost it's just we never expected an economic no logical revolution digital where it would be so powerful that it would reduce marginal cost to near zero which is the ultimate success of capitalism but it shifts the entire way you do business because when your marginal costs go low your profits go low correct so it's going to make a shift from markets to networks from ownership to access from sellers and buyers to provider user networks from consumerism to sustainability from externalities to circularity from productivity to generativity so markets are too slow they're transactional I introduced this at what an executive ad back in 2000 in a market you got a seller you buy it right you come together you have a moment of time you alienate the property or service from the seller to the buyer then you have downtime then you have to bring the parties together you need advertising you need marketing you have to worry about your storage your logistics they're too slow in a world that's moving too fast so when your margins getting low you have to move from a market to a network and block chain across competencies in operate webs where you're providing services 24/7 there's no start/stop mechanism there's no transaction stop transaction stop it's a flow of activity so even at low margins when you have a long flow of activity 24/7 you can maintain your margins some of the margins are going so low that in some goods and services it said to near zero marginal cost and that's the subject of the book the zero marginal cost Society and this has created a new economic phenomenon the sharing economy it's a baby it was birthed by capitalism we didn't see it coming but this is the first new economic system to enter onto the world stage since capitalism and socialism in the 19th century this is a remarkable event some of it is being absorbed in the capitalist system like uber some of it is completely detached from that system like Wikipedia there is going to be a struggle but already all of you in this room today part of the day you're sharing goods and services for free not covered in the GDP and part of the day you're in capitalist system that's moving from markets and networks don't have this right this is not going to go away so let's see how this has affected the various components of communication energy and mobility we now have three and a half billion people on the internet who are prosumers they are sharing their own music remember sigh that Korean performance artist he brought three billion people to his website in his little song and dance cost nothing it was done on a digital recorder three billion people it didn't cost him a thing not in the GDP we got millions of young people producing and sharing their own social media their own videos on YouTube open source and we've got millions of people on Wikipedia the sixth largest website in the world nonprofit cost fifty thousand dollars in charity a year and actually it would probably be the number one set one website if you eliminate the porno websites I think it's number one right now it's listed as number six we'll take that so I don't know how Jimmy Wales came up with this but we've got millions of people who have constructed the knowledge of the world in a democratic fashion for free it's no longer elite knowledge from the top down everyone parent Lee has nothing else to do but check everyone else's accuracy cuz I put something up on the web within an hour people crawling all over that sense I don't like this amplify it where's the edits I don't see this but it works democratized education we've got millions of young people taking massive open online college courses taught by the best professors the best universities they're getting college credit now there's a big dropout rate you need to blend it with physical on-campus stuff but it's not going away this is a revolution so it's not just that big companies like Google Facebook and Twitter have emerged but also all of you in this room are doing startups some of them profit and I'm some nonprofit and you're creating the platforms and the apps and the connection it's correct you're mining the data we thought there'd be a firewall we could understand how near zero marginal cost would impact the digital world of bits and from and news knowledge and entertainment we just didn't think it'd go over the firewall to the physical world of things the Internet of Things broke the firewall down millions of people now producing their own solar and wind at near zero marginal cost within 25 years everyone will be you know we're putting sensors in paint to collect the solar and in glass all you have to do is paint your house put in the glass everyone's gonna be producing their own energy we have millions of young people sharing car sharing services now all over the world so let's go back to Germany what's happened since that first conversation with a Chancellor 35 percent of our electricity in Germany this is all happenin years a third of our electricity is now zero marginal cost solar and wind will be a hundred percent off fossil fuels off called off everything before 2040 probably quicker solar and wind whoo what is what's really motivated this Drive and you should know this is that the fixed cost have been an exponential curve for solar and wind just like computers now when I was a kid we didn't have computers in the 1940s and early 50s the first computer was at my university UNIVAC university of pennsylvania at the time that the first computer was invented the chairman of IBM predicted we would need five computers for the world tops five okay too expensive no one saw the Intel engineers coming up with computer chips where they could double the capacity and half the cost every two years now smart phone $25 we've had the same exponential curve in solar and wind now it's becoming apparent in 1978 to one to produce one solar watt fixed cost $79 you have it today you know what the fixed cost is to produce that solar Watts not $79 40 cents thirty five cents and eighteen months if plunging by computer chips and what's interesting is the marginal cost because once you produce this solar and wind the marginal cost is free in Germany you know the Sun has not sent us a single invoice the wind hasn't they had no charge so how does a Second Industrial Revolution country compete with a third Industrial Revolution economy when you can plug in your businesses to an infrastructure where the energy you use across your value chains isn't here zero marginal cost and free of carbon someone should tell the White House this so who's producing all of this new electricity there are four major power companies in Germany keep thinking digital there are four major power come easy mbw rwe Vattenfall and Eon we thought they're invincible 12 years ago and here's what's happened what happened to them is what happened to the music industry book publishing newspapers and it happened quick it happens when actually about 10 to 12 to 14 percent when you get 10 12 14 percent of the market the old order collapses so what's happened here is millions of people in Germany and around Europe they created cooperatives farmers small businesses local neighborhoods they all got loans from the banks banks they knew they would pay back by the energy they generated they had to put a little subsidy on so you get more money for the solar and wind you did but now we don't need it because we're below parody we got on and off subsidies in 10 years and you know how much the fossil fuel industry has still in subsidies at the end of its age take a guess four trillion dollars a year around the world so what's happened is we have seen power to the people just like in communication where you can have power the people everybody networking open source we now have it in energy producing off-grid sharing some of it back to the grid does this mean the end of the power and utility companies not necessarily but they have to change their business model so in 2008 Eon asked if I would meet with their chairman mr. Tyson still there we headed to our debate I said look you're not leaving the Second Industrial Revolution tomorrow morning but the disruptions going to come in the next four to five years and if you don't deal with it within two years you're gone the transitions 20 years the disruptions 2 to 3 small window and I said you need to take your old utility and electricity business and make it a legacy business then in order to deal with the stranded assets you've got to have a new model for the third Industrial Revolution in the new model you make more money by not generating any electricity 96% of all the electricity being generated in Germany now solar and wind for the 21st century is cooperatives power to the people the big power companies can't scale it because you gotta you gotta actually collect the Sun everywhere and the wind everywhere high is a big company get the entire real estate of the planet I can't do it I can't do it the buildings will do it so I said in the new power system you make money you don't generate any electric you don't generate any energy for electricity and you make more money by selling less and less electricity he said you are out of your mind I said here's what you do you're gonna set up partnerships with thousands of businesses and you're going to help manage the energy flowing through their systems and the entire electricity grid it's going to be digitalized within the next five years we're already doing it all digital so people can produce and share energy just like they produce information and share it it's all digital so you will help thousands of companies with their supply change you'll help them managing the energy data through their supply chains you'll help them with their analytics and creating their algorithms so they can dramatically increase their aggregate efficiency at every step of their supply and value chains in return those sales of the businesses are going to share those a great efficiency gains back with you the electricity company in performance contracts he went like this he waited too long two years ago he put his fossil fuel and nuclear on the market like I said he should do no one's buying them they're stranded a lot of money he's moved to energy services so as RWE so as iam VW so is Vattenfall and EDF in France they've joined us in northern France my global team is in the sixth year of the deployment of all of northern industrial for de France EDF has been with us on the ground since get-go they're not leaving nuclear tomorrow but they see the transition coming it's not just Europe now China very interesting I this was a surprise I had never worked in China never been in China when Premier Li and president she came and Premier Li put out his official biography they both did and it was quite a surprise to me they up front Premier Li said he had read the book the third Industrial Revolution and he did instruct at the State Council and the development forum Commission to move on to themes I'm outlining with you this morning they move so fast I need to tell you I've been doing official visits with the leadership ever since eleven weeks after my first visit eleven weeks later the chairman of the National electricity grid of China the biggest in the world announced 82 billion dollars in the current five-year plan now to totally digitalize the entire electricity grid so millions of Chinese people could buy their own solar and wind because they're the largest producers of solar and wind in the world but they were exporting to us now they're bringing it back to the domestic market solar and wind everywhere so people could produce their own electricity share it locally or send it back to the grid that's operationalizing now in the third year the five year plan in real time where's the United States watch Europe the European Union watch China Europe is leading it every step of the way watch your watch China the coming together of the communication internet with the renewable energy internet both digital eyes so we can exchange information news entertainment and energy now it's heading to mobility we built the entire 20th century Second Industrial Revolution on automobiles it's called Fordism make the automobiles everything else comes the suburban role allows the consumer traffic everything here's the problem you're the problem how many of you are under the age of thirty nine this morning raise your hands 39 and under how many of you are 39 and under you are the problem apparently apparently you have decided you don't want to own an automobile that's Grandma and Grandpa two cars sitting in the driveway waxing them or at their place doing nothing right you want mobility you want access to mobility and car sharing services not ownership of static vehicles sitting there most of the time and markets do have that correct for every car you're sharing we're eliminating between 7 and 15 automobiles what does this mean we have a billion cars buses and trucks choking us in traffic around the world they're the number three for cause of global warming number one is buildings anybody know what number two is which no one ever talks about we're spending a lot of time on buildings and transport yeah cows so I wrote a book on this in 1990 called beyond beef and I was pilloried saying you are lost your mind that's absurd we now know it's beef production and consumption because cows take up 27% of the non ice landmass of the world 27 percent 1.3 billion cows I love cows my wife and our animal rights people but the methane they produce is 23 times more potent per molecule than co2 and the nitrous oxide in their feces is 288 times more powerful for molecules and co2 yet even political leaders how many governments have you heard anyone make a statement on this and even environmental leaders that you watch on films and TV even environmental groups for fear that we'd have to change our diet move down the food chain we're lost if we can't even have that conversation but let's took a chart take transport we've got a billion vehicles we're gonna eliminate 800 million of those given the statistics we know now in the next generation the other 200 million will be electric there'll be fuel cell there'll be pre 3d printed with fabrication recycle material for Daimler they're already working on it they will be autonomous and driverless on road rail water and air at very low marginal cost 14 countries have now announced they are outlawing the internal combustion engine somewhere between 2030 and 2040 five it is over there decoupling so the electricity utilities are decoupling from fossil fuels quickly you follow me and now transport is decoupling and now housing all right so whatever they mean by housing remember I said the buildings commercial residential and industrial will be the nodes in the data centers and the micro power generation sites and the power plants and the charging stations many many companies are now establishing their their industries so their solar and wind and don't have to rely on the grid Google Apple Amazon all the big ones their data centers are all solar and wind totally under percent they don't have to rely on the grid at all they can send an electricity back but this is now going to happen across all of the communities around the world decoupling and housing is the third largest emitter I believe it is now global warming emissions so this there's some movement here not small movement big movement what's missing is taking all the digital expertise in this room and building out the infrastructure to connect 5g big data communication internet with a digitalized renewable energy into that a digital mobility internet running on autonomous vehicles all on top of an Internet of Things platform and the businesses here can help build out that 15-year infrastructure and it might get us the post-carbon in time because the price is right what's crippling the fossil fuel industry is solar and wind are now below parity in some places and at parity and they're continuing to dropped the market has spoken so it doesn't make any difference in some ways what the oil companies do or special interest the market is now spoken it's not going to change this is what the this is the opportunity what it means is in this room we need a whole digital generation that began to understand this narrative and understand how to put this infrastructure together in your communities and regions we have two plans one is called smart Europe and one is called internet Plus China we developed these plans with both of the leadership cities countries smart Europe was announced last in 2017 with Marlys F kovitch the vice president European Commission and mikuma Cunha the president of committee of the region's I joined them we have 741 billion euros and the Yonker fund to lay out this infrastructure we do not believe nation-states will do this we believe nation-states will create codes relations standards and incentives we believe local regions in your case Canton's regions provinces will lay this out because of the nature of the engineering it's distributed it's open its transparent it has to be laterally scale so you need to move to glocalization each community and region has to take the architecture we've just described set up a 20-year construction site bring the whole regions together and operationalize and the way we're operationalizing it is by something called peer assemblages for example halt de France some of you visited northern industrial France Lille a Mian that's the home of marine lepen and McCrone etc so a number of years ago they asked our global team of engineers and architects and urban planners will you do a plan for us and I said no we're not gonna do a plan for you it'll sit on the shelf everyone does plans and get a pilot but I said if you the president of the region go and you get every municipality lined up every political party all the universities and high schools all the chambers of commerce and all the think tanks together to create a collaborative pure assemblage we'll come in and we'll help but you draw the plan based on this narrative they said we've never seen this anywhere in the world you said we're right you're gonna do it so they set up an assemblage of thousands of people in hundreds and hundreds in these primary committees and we spent 10 months with them and they developed a plan and now those pure sandwiches are in the sixth year so the government is no longer the decider anymore they're the facilitator they bring together everyone across the regions and together they create a plan so there's no backlash there's no backlash in this region and why do we do this because then you can scale it you cannot come in and keep doing pilot projects even the big companies they don't go anywhere if an entire region has a plan and these plans are 500 pages long they're open-source go up on our website you can see them if an entire region does it and then they stay involved as peer assemblages for years across three generations they can move to scale whole social housing districts whole commercial districts in the time frame the UN is set out we have 1200 projects now in haut de France we're now in the 23 cities of Rotterdam - The Hague the petrochemical complex all of Luxembourg come and visit and the region of northern France which was the Rust Belt they were awarded the entrepreneurial region of Europe award three years in thousands of jobs let me get two jobs finally while we're moving to an automated world we have to last generations of massive employment to lay out this infrastructure and robots in AI won't do it once the infrastructure in its smart small workforces and then we're going to shift employment we're not going to give people money to do nothing we know where the employments going to shift in 40 years from now to the social economy the nonprofit sector social capital because machines are not going to raise a two-year-old in a childcare center robots are going to bring them the orange juice they're not going to raise them or health care or education and we're gonna have to digitalize a lot of it but most of it is human capital so robots and a I will not decommission the entire fossil fuel complex do you know that Citibank has now said that there's a hundred trillion dollars in stranded assets in the fossil fuel industry it's the biggest bubble in all of history it's coming a hundred trillion so robots an AI will not decommission the entire fossil fuel nuclear complex you'll need human beings semi skilled skilled and professionals robots and a I will not put solar in your roof and put wind turbines up you ever seen a wind turbine put up there's no robot that can do that human beings robots an AI that will not dig down underground cable for 5g and put it in that's human beings robots in a I will not have set up the intricate infrastructure that you need with the Internet of Things it goes on and on so we already know in Europe and the places we are we have created a huge amount of jobs massive we can get to generation bring everybody back to work we're seeing it and cross some parts of Europe right now so let me end with this we have smart Europe we have internet plus China our current five-year plan you know how many automobiles we were putting out electric in China these five years five million that's just the start just to get it going but what I'm going to say to you here this morning all of you are digitally oriented you're here because you're in the digital third Industrial Revolution the first was steam-powered at Industrial Revolution the second was analog electricity the third is digital there's no such thing as the fourth that's a creature of the World Economic Forum about AI and robots it's a silly all right it's totally silly but what I'm going to say to you is that technology doesn't do it alone the technology enables and what we've said to governments when we mean governments and regions we say if you have another plan to address climate change bring everyone back to work and hopefully decarbonize society tell us what it is tell us and I always get signs everywhere this is the only plan that can move us off the carbon really quickly on an energy electricity transport mobility the building structures everywhere but it's not enough we're gonna have to change consciousness what's happening is people are either asleep or in denial or thinking it's all over because we do not have a new narrative that's strong enough to say to the human race we need to do this we need to give this a try this is our last best chance so what I think is important is what consciousness is beginning to change and you'll be the judge of it because most of you are under 40 you can see whether this makes any sense I'm beginning to see the seeds of a new form of consciousness among digital natives under 40 in how you define freedom pretty basic power very basic and identity to community freedom my generation in every generation before me beginning with the Enlightenment we believe freedom was the ability to be independent self-sufficient an island to ourselves and not beholden to others and I should have the right by society's letting me do what I want to do for my life and I don't bother anyone else right we define this as negative freedom exclusivity to be independent for a generation that grew up on the internet the idea of being in an island to oneself totally autonomous and self-sufficient that's death if I took away the smartphone's in this room for you for two days I guarantee you what's going to happen there's gonna be a lot of therapy going on here right all right so so what's interesting here is that we have a generation in this room for you freedom is the ability to flourish and flourish means to the extent that you can have network after network and create community after community you feel like you have more freedom because freedom is inclusivity access over ownership inclusivity means being able to network and be engaged with so many different people at so many different levels through the smart technology correct if you were to be isolated and just an island to yourself like in the Second Industrial Revolution that would be death that's a ballpark change in the way we define freedom power we always define power as a pyramid from the one to the many but if you grow up on an Internet and you see the ability of open source to create network effects where everybody benefits by everybody else and each individual social capital is improved by the network you're in an open source that's a completely different idea about freedom its lateral it is lateral it's sharing it's open source we've seen this in 3d printing with fab labs being set up all over the world so people can participate in fabrication manufacturing and share all that software with each other all over the world that's a complete change in the dynamic finally and maybe most important I think we're beginning to see a shift in how we identify with community I grew up in a post Westphalian world every nation is a sovereign and within each nation every citizen as a sovereign of that nation and each citizen competes with every other citizen for scarce resources in the market zero-sum game the nation-states compete with other nation states in the market and the battlefield for scarce resources zero-sum game I don't have to remind you here in Europe we fought two world wars cold in the world valley and oil up in the glass down a lot of people died we now have a generation of young people coming home with biosphere consciousness not geopolitical consciousness the biosphere is only 19 kilometers really from the stratosphere to the lift of sphere to the oceans and within that 19 kilometers all of the spheres of the planet interact with the chemistry and planet and biology to create life it's amazing it's incredible we're just beginning to try to understand we have young people coming home with vials for consciousness 15 year olds and they're saying to their father why using so much water while you're shaving we've got wildfires and droughts in the next community turn it off why is that electricity on that TV's on for three weeks in another room no-one's ever been in that room turn it off why to cons why not get rid of one in CarShare take the choice we got young people coming on this is the one my wife and I particularly fond of because there are animal rights work we got kids coming home and asking where the beef is why that hamburger is on the table what that hamburger come from did it come from a rainforest a lot of a lot of the beef does did they have to burn down those trees to get 6 inches of topsoil to graze one cow for this burger and the young people know that when they burn those trees in that tropical rainforest to graze that cow on that soil for the burger there's wild animal life that only live those species in those particular rainforests they don't live anywhere else they go to extinct really quick and if the trees aren't there cuz they're burned for the topsoil for the burger they're not absorbing co2 anymore from global warming emissions from industrial cities that means the temperature the planet's going up and that means some farmer in India she or he cannot feed their children because they're getting destructed by spring floods and summer droughts and even wildfires literally because of that hamburger they're learning ecological footprint you can measure it high school kids are doing it they're learning that everything we do intimately affects someone else so the whole libertarian idea that I should be able to do anything I want as long as it doesn't impact anyone else it's absurd everything we do every moment of our life intimately affects some other humans some other animals some other creatures some other this is real it's not academic the cruel hard lesson of climate change is we're all intimately connected and all of our choices every moment affects everyone else and every species in every ecosystem that's the cruel but important lesson if we can understand that we can begin this journey so in closing we've got a whole generation here in Switzerland in this room you are at the cusp and the edge on the technology revolution digital correct step back tomorrow morning when you get to the office have a cup of coffee step back and ask what am I doing here with my startup how am i contributing to this narrative are there ways I can find a business model so my startup is connected into a 20 year build-out of the biggest infrastructure shift in history communication energy mobility logistics the shift in the built environment the Internet of Things and then come together across Switzerland bring all of this digital community together across Switzerland you have the Canton's they are tailor-made for each can't on developing their own roadmap you haven't done it here yet so create a movement so aside from your day job part of that is to bring together the entire digital community in Switzerland all three regions and switch them all the Canton's and we will have them visit northern France and we'll have them visit to the Netherlands in Luxembourg where they're in deployment they can see the problems the challenges how they're setting up their roadmaps then this is good to make sure your businesses are at the centerpiece of a great revolution to move us into a green era we've got 10 15 20 years there has never been a challenge like this in human history you're going to have children and grandchildren who are going to dread their birth if we can't turn this around we're going to turn this around Switzerland has all the technology available you've got a young group here that's on fire tomorrow morning move Switzerland thank you [Applause] [Music] you

Channel: CREA Digital Day

Views: 5,152

Keywords: interview, conférences, digital, événement, geneva

Id: TDRMgqyhiug

Length: 61min 51sec (3711 seconds)

Published: Thu Jan 24 2019