[Music] we're already consuming at a pace that is too much and then we keep this pace we're gonna run out of resources I think we're gonna end up with our own distraction I think people are too positive about our current situation just because our economy is going well here doesn't mean that it's global and doesn't mean that it will continue that way I mean the whole concept of sustainability is becoming very prominent not only in universities and in schools but also businesses but I think it's too much of a hot topic and not so much about walking the talk per se I think there's so much bus around no substance behind it if we keep the economy running as we do it today I'm worried that we will reach a dead end in terms of waste disposal economic meltdown and climate change becoming more inclusive making sure that everyone kind of has a way to make a living has access to education I think these are universal principles I'm gonna ask everyone to put down their cell phones turn them off and all the cameras go in the back of the room I'm used to up classroom nice and quiet so you gonna have to go in the back good morning last time I was here was over 20 years ago it's always nice to be at st. Gallen wonderful institution of higher education we can't begin to discuss the future of work until we do a reappraisal of where we're headed with civilization in the 21st century I want to provide a framework for how we discuss the future work by giving an evaluation of where human civilization stands today and the challenges that are going to face us in the next 50 years any conversation about the future of work starts with a future the economy and here are the numbers GDP has been slowing all over the world in every region for at least 10 years and the reason this is happening is productivity has been declining all over the world for the last 10 years and the result is unemployment's very high especially among a young millennial generation trying to find their place in a 21st century workforce our economists are projecting 20 more years of low productivity and that means slow growth and that means we unemployment is in trouble and let me do the numbers for you we've had two industrial revolutions in the 19th and 20th century and the numbers are in I think it's fair to say that half the human race today is far better off than our ancestors were before we began this industrial experiment is that granted but I think it's also fair to say that 40% of the human race making $2 a day or less are not appreciably better off than their ancestors were and the 1 billion people making less than a dollar a day I didn't think we'd have to say they're probably worse off than their ancestors were before we began the Industrial Revolution and while half the human race has done better the other half of the human race only appreciably better the very wealthy have done quite well this morning the 8th wealthiest individuals in the world we could put them in this row right here the eighth wealthiest individuals in the world this morning their combined wealth equals the accumulated wealth of 1/2 the human beings living on earth that's three and a half billion people there's something so dysfunctional about the way the human family is organizing itself on this earth it's clear we're in the long-term structural economic crisis but now this economic crisis is given rise to a much more profound crisis for two centuries and to industrial revolutions now we have been spewing massive amounts of carbon dioxide into the atmosphere we dug up the burial grounds of the Carboniferous era and we used those assets to create a fossil fuel civilization we have spewed so much co2 and methane and nitrous oxide in the atmosphere this little blue planet in the university now we are in real time I'm a change this is no longer a theory or looming on the horizon climate change is now at the door it's in the house and here's what's so troubling and threatening about climate change what I'm about to say to you if this was described what climate change really does if we really described it every one of the human race this morning would be motivated to save our species from extinction in the next century here's what climate change actually does that no one ever hears climate change changes the water cycles of the earth that's what's going on now we are the watery planet over millions of years our ecosystems have developed by the hydrosphere the water cycles that traverse the cloud covers and that cover our continents and our ecosystems here's the rub for every one degree that the temperature the climate goes up because of industrial induced global warming emissions for every one degree that temperature goes up the atmosphere is actually sucking up 7% more precipitation from the ground the heat is forcing the precipitation into the clouds more quickly so we're getting very consultative precipitations in our hydrosphere the clouds and this means more dramatic extreme water events that are totally unpredictable all across our ecosystems blockbuster winter snows if you're from Boston eight feet two seasons ago they say this happens once every thousand years this is the new normal across the world in the winter we are getting runaway flooding across our continents every spring destroying our lands and infrastructure and people we had some storms in the Carolinas in southeastern United States in the last year these storms the first one they said well this occurs every 1000 years we've had four we have droughts and wildfires destroyed millions of acres of lands across every continent my wife and I were in British Columbia two years ago we have planned our holiday there for six months we came in there was smoke across the hotel everything was on fire from British Columbia to California last year everything was on fire my cousin who was an artist and his wife they lost their house to no lie we've got wildfires destroying ecosystems and infrastructure all over the world every year that's the new normal we have category 3 4 & 5 hurricanes decimating our land systems I was just in Congress with a delegation from Puerto Rico they were out electricity for a year we had four major category three four and five hurricanes hit the southeastern United States in less than a month it's supposed to happen once every thousand years wake-up call the water cycles are on a runaway exponential curve this is real-time climate change our ecosystems are collapsing because the shift in the water cycles they can't catch up to this in evolutionary terms and this is what I want every parent and grandparent here to listen to and the Millennials about to start career scientists now tell us we are in the sixth extinction event of life on this little planet it doesn't even make the headlines nobody even knows about it we've had five this is the most dramatic story we've ever faced in our 200,000 years as anatomically modern humans on this planet we have had five mass extinction events on earth in the last 450 million years and when they come they come very quick there is a turning point a tipping point the chemistry the planet shifts massive died out usually around 10 million years to see new life emerge we are now in the sixth extinction event in real time we're chronicling its a model we're going to lose at current projections over half the species of life on Earth species that have been here for millions of years over half of those species will be extinct and current projections within eight decades the last time we had a species extinction event of this magnitude was 65 million years ago and it occurred over several thousand years as my wife says we are so asleep we're talking greenwashing we have a few pilot projects out around the world we all think climate change is an important issue no what we're really talking about is the survival of the human race and our fellow creatures so what do we do we need a new economic vision for the world and has to be compelling we need a game plan to deliver on that vision it needs to be quick it needs to move as quick in the developing countries as the industrialized nations we have to be off a carbon-based fossil fuel civilization in less than four decades everywhere not low off if we have any chance of addressing the issue of this abyss we are not going to reverse climate change we are now our our side to tell us we have now moved from the Holocene which was ten thousand years of nice climate weather and was an unusual period in history we think that's normal but it wasn't normal and now we're moving into the Anthropocene we are going to be with climate change for thousands of years we are moving from progress to an era of resilience we're going to have to survive as a human race and learn how to flourish in a completely different way with a completely different sense of who we are and what our relationship is on this earth and we're going to have to do this in less than two generations and have the fortitude to begin to regenerate the planet this is an overriding mission so we need to step back here this morning and say gallon asks this question how do the great hee Konami paradigm shifts in history occur if we know how they occur we're gonna get a road map here at st. Gallen and Switzerland and all over the world and a compass that's gonna allow us to travel on a new course very quickly and hopefully in time to save our species and rethink our relationships on this earth there have been at least seven major economic paradigm shifts in history they're very interesting anthropologically they share a common denominator and that is at a moment of time three defining technologies emerge across the civilization over a period of time and they converge to create what we call in engineering a general-purpose technology platform an infrastructure that fundamentally transforms the way society manages powers and moves its economic social and governing life what are those three technology revolutions that appear and converge very infrequently over history number one new communication technologies to more efficiently manage our economic social and governing life that's rather obvious number two new sources of energy to more efficiently power our economic social and political life that's obvious number three new modes of mobility transportation logistics to more efficiently move our economic social and political and governing life when new communication revolutions emerge and converge with new energy regimes and new modes of mobility transportation logistics it changes the way we manage power and move our value chains their supply chains it changes our temporal spatial orientation it changes our governance it changes our business models it changes our cognition and consciousness I'm gonna give you two quick examples they first Industrial Revolution 19th century Second Industrial Revolution 20th century the Brits take us into this first Industrial Revolution where the convergence of communication energy mobility they changed the built environment in the business model and governments they took us from the old German manual print press and communications very slow to steam power printing very quick so we could mass-produce communication for public school books and textbooks and brochures newspapers magazines communication revolution cheap print then in the last half of that 19th century the British the Brits introduced the telegraph system across the British Isles steam power printing and the Telegraph those communication technologies in Britain converged with a new energy source cheap cold from the hinterlands harvested by that steam engine the British invention the most ingenious part of it when you look at it historically was then they decided to put the steam engine on Rails locomotive national transport hub dahab big urban city environments the first Industrial Revolution the United States Second Industrial Revolution 20th century centralized electricity the telephone I know we think the Internet is a big deal but try to imagine all of a sudden people be introduced after two hundred thousand years to the telephone instant communication at the speed of light across the world later radio and television in the United States the telephone later radio and television those communication technologies converged with a new source of energy very cheap Texas oil then Henry Ford barreled the Daimler internal combustion engine and put out cheap cars for a road and rail water and air traffic the internal combustion engine we moved from urban to urban suburban life the shopping malls they travel in tourism all of that came out of that second Industrial Revolution the communication energy mobility built environment we took the whole world through the 20th and 21st into the 21st century on this second Industrial Revolution correct it peaked we know the month July 2008 business people who know that month in July 2008 Brent crude oil had a hundred and forty seven dollars a barrel on world it's a record the entire global economy shut down already in the months leading up to that there was no traffic moving at the ports or warehouses that was the great economic earthquake of the industrial area the collapse of the financial markets 60 days later was an aftershock because you couldn't keep the debt-ridden fictional economy moving when the real economy shut down why was that the earthquake at 147 a barrel the whole civilization that we live off of his based on big digging up the carbon deposits of the previous period of history our fertilizers our pesticides our construction materials our pharmaceutical products most of them our synthetic fiber our power our transport our heating light it's all made out of a move by fossil fuels so when the price of crude oil goes over 80 a barrel watch all the other prices go up when you get to 115 a barrel that zone price has become high purchasing power slows so in 2010 oil went down to what 50 a barrel because the economy had shut down no activity we regrow the inventories all prices start to go up I think it was 2014 we hit another peak of around 120 a barrel purchasing power slows again and now during this endgame we have the fossil fuel industry fighting among themselves so OPEC decided to take on its new more exotic competitors shale gas and tar sands and they opened up the oil spigot so that they could put out oil and get the price down to 30 a barrel and wipe out tar sands shale gas they wiped them out in 18 months because those two energies are not competitive under 40 35 a barrel as soon as they shut them out all prices started to go up but now they're over fifty a barrel and now shale gas and tar sands are coming back in they're fighting at endgame and most of the places where we have oil we have failed States now does anyone in this room think we're in the sunrise of the fossil fuel era where do we go from here let me share an anecdote with you when Chancellor Merkel became Chancellor Germany she asked me to come to Berlin in the first couple of weeks every new government to F L / deal with the question how do we grow the German economy and create jobs in Germany when I got to Berlin the first question I asked the new chancellor said madam Chancellor how do you grow the German economy this is crucial how do you grow the German economy and create new jobs when your businesses are plugged into a second Industrial Revolution infrastructure of centralized telecommunication fossil fuel nuclear power internal combustion road rail water and air transport and logistics and that infrastructure to manage power and move your value chains that infrastructure peaked in its productivity over a decade ago this is the key productivity why is productivity been declining for 20 years we have all these killer new products coming out of Silicon Valley and productivity keeps declining and the economists don't know let me explain why they don't know there's a dirty little secret in economics it's a little embarrassing economists don't want to talk about it but I will share it with you this morning what is the nature of productivity because if you want to talk about jobs in the future jobs you have to talk about productivity correct in classical economic theory we have always believed that we have always believed that the two defining features of productivity are more capital for better performing machines and better performing workforce is correct but when Robert Solow won the Nobel Prize for economic growth theory in the mid-1980s he let the little secret out he said well actually when I tracked every single year the Industrial Revolution these two factors better machines and better workers they're only 14% of the productivity and so Robert Solow that's the big question where's the other 86% come from don't know it's called the solo residual how you surprised that economists don't know this should be critical to their entire discipline here's why they don't know when economics was penned in the late 1700s the vote was Newton's physics because he had supposedly unlocked the secrets of the universe or everyone wanted to use his metaphors to be scientific the economists followed right in line for example you know Newton's law for every action there's an equal and opposite reaction sound familiar Adam Smith borrowed that metaphor for the invisible hand for every action on the supply side there's an equal and opposite reaction I'm the demand side Newton's law body in motion stays in motion unless disrupted by an outside force Baptists say the French economist bough that metaphor to suggest that supply will stimulate demand which will generate supply which will stimulate demand unless disrupted I could go on and on but the only problem with using newton's metaphors to define economics is with a small exception of friction friction Newton's physics really doesn't have much to do with economics economics is based on the same laws that govern the universe the solar system the biosphere and everything we do in the global economy today and here in st. Gallen those are the two laws of thermodynamics the energy laws they were discovered by chemists and engineers in Europe and the United States in the late 19th century when they were looking at energy and flows through machines the first law of energy that governs the universe all the energy in the universe that's here today was here at the beginning in the Big Bang and we'll be here to the end of time we've not created any more energy or destroyed energy since the Big Bang what's here has always been here conservation law the second law of thermodynamics says that's true all the Energy's been here since the Big Bang it's not nothing new has been created or destroyed but energy does change form every moment but only in one direction from hot to cool off through the universe from organized to disorganize through the universe from hot to cold fina verse so we had that little Big Bang and then it spread out around the universe to equilibrium entropy is a measure the energy still there no longer usable so what is economics all about we take available material and energy out of nature it can be a rare-earth for your smartphone it could be metallic or for your automobile it could be a piece of coal for energy and then we extract it we ship it we store it we produce goods and services from it we consume it and we recycle it back to nature that's the value chain right and every step of conversion of taking nature's resources through our value systems and taking it back to nature at every step of conversion we have to embed a certain amount of energy and material materials of form of energy into that product or service to get it to the next stage of what it becomes on its journey through society you with me but in each of those conversions we have to embed a certain amount of energy material into the product or service but a certain amount is lost in the process this is called aggregate efficiency this is the third major factor in productivity that every chemist knows about every engineer knows about every biologist knows about every architect knows about it and the economists don't have a clue it's called aggregate efficiency and its basics the thermodynamics aggregate efficiency is the ratio of potential work the actual useful work that gets embedded into that good and service at each step of his journey and then what's lost in the process every business person here knows what I'm talking about the supply chain the value chain so we have a new generation of economists some of them come out of INSEAD and in France and other places who studied thermodynamics they went back and tracked the whole Industrial Revolution better machines better workers and then they plugged in aggregate efficiency and they got most of the rest of the productivity every chemist and engineering biologists could have told you that so what does this have to do with my conversation about jobs and growth and employment in Germany with the Chancellor she's a physicist by background when I said to the Chancellor is in the United States we started off the Second Industrial Revolution with 3% aggregate efficiency in 1903 we lost about 97% of all of our conversions wasn't very efficient by the late 1990s the u.s. got up to around 13% aggregate efficiency the racial potentially useful work at every conversion the thermodynamics and that was our ceiling we just haven't gotten above that and our infrastructure Germany got up years later to around 18.5% aggregate efficiency that was their ceiling does anyone know which country led in aggregate efficiency business people it's quick it's easy Japan 20% aggregate efficiency that was their ceiling so I said to the Chancellor you can have market reforms and fiscal reforms and monetary forms and labor reforms and you can talk about all sorts of innovations to create new productivity and new businesses and new jobs it's not going to make a damn bit of difference as long as your businesses are plugged into a Second Industrial Revolution infrastructure from the 20th century based on centralized telecommunication fossil fuel nuclear power internal combustion world where water and air transport because that ceiling is about 20% for aggregate efficiency you just can't get above that ceiling so on that first day with a Chancellor we test a third Industrial Revolution by the way I don't want to step on any toes but there is no such thing as a fourth Industrial Revolution I know that mr. Schwab introduced this at the World Economic Forum good good good marketing but when you try to ask people what it is they have no clue they talk about artificial intelligence and robotics and things of that nature the first Industrial Revolution was steam punk generated the second one was analog electricity the third one that I talked about with the Chancellor is the digital revolution across every area from there from AI to robotics to value chains and here's that what it is I said to the Chancellor we have a shift going on in communication energy of mobility we have 25 years now into a communication revolution called the Internet three and a half billion people are now connected with chief smartphones and we can at very low marginal cost converse socially and economically all the world this is a revolution correct now this digital internet communication revolution is just beginning to converge in Europe and China with a digitalized renewable energy internet where millions of people already are producing their own solar and wind electricity off-grid and sharing some of it back on an energy internet all digital eyes that acts just well the way the information internet does where you can share it across a distributed field just like you to share information and entertainment and knowledge now those two Internet's the communication internet and the renewable energy Internet are just beginning to converge with a third internet a digital and mobility and the logistics internet and in five years it'll be driverless on-road and in 10 years rail air and water and the vehicles will be electric and fuel cell and drones and they will be operating by low fixed cost and very low marginal cost all digital so you can share logistics just the way you share energy and information all digital and distributed webs all over the world those three Internet's the communication internet the renewable energy internet the mobility logistics internet all digital the digital revolution right on top of a platform it's called the Internet of Things we are placing sensors across all of our built environment and the natural environment to monitor data and talk to each other and talk to us so we have sensors in the agricultural fields monitoring the soil salinity we have sensors in the factories monitoring the data on the factory floor we have sensors in the warehouses monitoring the logistics sensors in smart homes monitoring your activity and efficiencies sensors and the consumer businesses aware and the road systems everywhere by 2030 we will have ubiquitous interconnectivity on this Internet of Things essentially we're creating an external prothesis of the human brain and nervous system so everything can be connected and began to synchronize and share that data with each other across a global organism this is a global economy a global society global civilization it's a potential great leap forward for humanity because now we can envision because it's already starting the whole human race engaging each other in real time at very low fixed and marginal cost just power up your cell phone everyone's on an equal playing field and we can have a vast expansion of economic entrepreneurialism and economic democracy everyone can be a player this will allow us to move from globalization which was top-down centralized vertically integrated a few big companies to what we call glocalization in the virtual and physical world all connected it means all the players small companies medium-size companies large companies cooperates can engage each other across the lateral networks at very low fixed in marginal costs in a globalized world where we maintain the diversity of all of our region's we engage as a human family but it's very diverse very distributed this is already beginning this is not going to go away that's the upside but the moment we get intrigued and excited about this upside of global interconnectivity creating a human family and all our diversity that can democratize the economy we immediately become chilled what about the darknet how do we protect us against the dark net which is completely on the same field as the bright net it could win how do we ensure network neutrality when everyone's connected how do we ensure governments don't provide this digitally interconnected global brain and nervous system for example to hack the u.s. elections how do we make sure that global internet companies like Facebook Twitter and YouTube don't monopolize this internet and commodify the data of every human being in the world and we become the final commodified product so that a handful of people can become wealthy that's already happening how do we ensure privacy and data security when everyone's connected and how do we prevent cyber crime and cyber terrorism from disrupting a system malware is doing this every day in your companies this is the darknet it's as impressive as the bright net we'll have to spend as much time and attention on creating the resilient in this system so that we can prevent the darknet from prevailing that means the more distributed the system the less vulnerable to attack the more centralized the system the more vulnerable it is to either cybercrime or more importantly climate change events Puerto Rico has been down for a year on electricity I was just in Congress with Puerto Rican delegation last week they could have been back up and running on the model I'm gonna introduce to you in 24 hours so the next the great next struggle in the next 30 years is going to be able to try to ensure the darknet not prevailing so that we can move ahead with this new frame of reference the bright net here's the advantage of the bright net let's say you're a small or medium sized business or a cooperative or a non-profit or a large company here in Switzerland you can begin to go up on this internet of things already and get a picture of all the data that's starting to flow through the system pretty soon everyone's gonna have the data because we'll be ubiquitous if we stay open and neutral everyone's gonna have this data and that means that any small business could queue in take the data you care about for your value chain and strip it out from all the other data all your needs a cell phone then you can mine your own big data with your own analytics create your own apps and your own algorithms for governance so you can dramatically increase your aggregate efficiency and your productivity because productivity is determined by a great efficiency reduce your fixed and marginal cost by governing your system at every step of conversion across your value chain you're finding ways to increase your aggregate efficiency and reduce your fixed cost and your ecological footprint every company can do this it's not going to be expensive some of the marginal costs are getting so low they're forcing a shift in capitalism we are moving from capitalist markets to capitalist networks it's a big shift I introduced this in the book the age of excess back in 2000 it's not robust because when the marginal cost are going to get so low because of this digital revolution there there's there means less profit in the old transaction model so if you're a business and you're in the market you make money by transaction of a good service and every time it's over you got to start again then it's over then you start again then it's over then you start again that's down time but when profits become very low we have to move from ownership to access from sellers and buyers to provider user networks from industry sectors to competencies blockchain from consumers and sustainability what does that mean it means the businesses around the world will begin to blockchain in regions and they will make money by the flow of the traffic not the transaction of individual discrete goods and services you'll make it as a provider user networks think of stock when your when stock is being sold every day its millions of shares and it's only a tiny Commission transaction commission on each share but the flow is so continuous that you're making it on that 24/7 service so we're moving from markets and networks ownership to access sellers and buyers to provider user networks you all know what I'm saying it's disrupting the boardrooms this morning it's a big shift some of the marginal costs are getting so low they're heading toward near zero now this is interesting because I taught the advanced management program at the Wharton School for about 15 years anybody here go through that program with me anyway about 15 years we always taught that the optimum market is where you sell at marginal cost because you want to reduce your cost with new technology so you can put out cheap goods and services win over consumers and bring some nice profits back to your steyr shareholders it's just we never thought the marginal costs would get so low that they'd head towards zero and some goods and services it's the ultimate success of capitalism it actually worked we got down to near zero marginal cost and some goods and services but that means it gave birth capitalism this old system unbeknownst to all of us it gave birth to a sharing economy we didn't see it the sharing economy this little baby is the first new economic system to enter onto the world stage since capitalism and socialism in the 19th century it's a remarkable event it's ill-formed part of it will be absorbed by capitalist networks part of it's going to independent and many times they will share common ground and work we get each other's hybrid systems it's already here that is not going away so what does this mean in terms of where we head we already know what's going to happen across society because the communication Internet's been here 25 years and we now know what's happening in communication energy and knowledge and entertainment that's going to tell us what's going to happen in energy mobility transport manufacturing in every other field we have three and a half billion people on any given day on the internet who are prosumers they've all been prosumers we're still have sellers and buyers owners and workers that won't go away but we now have prosumers we have millions of young people this morning you're producing and sharing their own YouTube they're sharing their own music with each other and near zero marginal costs remember that Korean performance artist with the little dance two years ago two billion people come to his website all he had was a little digital recorder that cost him nothing and then he put it up on the web and all I needed was a service provider we have young people all over the world this morning producing and sharing their own news blogs nearly free zero marginal cost they're producing and sharing YouTube videos millions of them they become their own producers of the narratives there we have millions of students taking massive open online college courses taught by the best professors at the best universities at near zero marginal cost they have to blend it with physical participation or they have a high dropout rate but it's not going away and Wikipedia I don't know how Jimmy Wales thought of it I would have said this couldn't be done but this shows you the possibilities for democratizing civilization 6 largest website in the world I think the other four or five are a porn website so it's probably number one and this website costs only fifty million in non-profit charity to run millions of people are constructing the knowledge of the world we've democratized knowledge in less than twenty years and the accuracy rate is as good as the centralized top-down knowledge we had on the Encyclopedia Britannica's and it's all free people have nothing else to do after work because I'll put something up on our website and within about 30 seconds people are crawling all over the sentence this is wrong now let's amplify I've got something else I want to put in this is the cross the crowdsourcing checking it works so what's happened there's been a massive disruption with a communication internet in the music industry television newspapers book publishing because of near zero marginal cost whole new industries have emerged not just Facebook Google and Twitter but there are thousands of businesses caught in non profit and profit that are setting up the platforms dealing with the algorithms in the big data and they're setting up the connections correct we thought however there'd be a firewall here a lot of jobs came from that by the way a lot of jobs and setting up all these startups millions of jobs we thought there'd be a firewall here in Wales near zero marginal cost would affect the virtual world of bits we didn't think of move into the physical world of atoms the Internet of Things breaks the firewall my books out here I think free if you get a chance we'll go you can go into more detail the zero marginal cost society thinkers around on the desk so what's happened across the firewall let's go back to Germany my old friend Sigmar Gabriel was here yesterday we've worked together he was the for the years that he's been in there as an old buddy and frank steiner the president country and and Sigmar has done the energy transition for germany we are now what is it eleven years after that first conversation the Chancellor we are 35 percent of our electricity in Germany on an energy internet is now solar and wind will be a hundred percent renewables by 2040 done deal what's interesting about this energy transition into an energy internet where all sorts of people across Germany are producing their own solar and wind off-grid or selling it back to the grid and sharing it's just like we share information news and knowledge here's what's really interesting the fixed cost have plummeted in this technology this is the story you're not hearing when I was a kid in the 1940s no computers the first computer was invented in my university University of Pennsylvania Univ at the president of IBM at the time said we will need maybe seven computers for the world that's optimum guess they didn't anticipate the Intel chip double the capacity half the cost on the chip every two years now China has a smartphone $25 more power than sent our guys to the moon that means if you're in the developing world right now you're gonna have a smartphone right now with more power than sent our people the moon that's a person in the hot anywhere what's interesting is the fixed cost the marginal fixed cost have been plummeting and solar and wind you know exponential curves they're interesting if you double them every twenty times it doesn't look like much and around the 21st time it goes through the roof 2 4 8 16 32 64 hundred twenty-eight then it goes the fixed cost of a solar watt in 1978 $79 fixed cost 1 watt $79 you know what it is this morning 45 to 50 cents you know what it's gonna be in 18 months or now fixed cost one solar what 35 cents see where I'm heading we now have power utility companies that I work with in Europe and America who have quietly in the last 24 months been buying long-term 20-year contracts for solar and wind at five cents four cents three cents two cents a kilowatt hour I know I have people from the energy industry you know what I'm saying here we are sitting on a massive bubble the biggest in history it's called stranded assets in the fossil fuel industry I meet with the CEOs and power utility companies all the time and they're panicked there's disruption in the boardrooms Citibank I guess it was two years ago put out a report that we have a hundred trillion dollars in stranded assets in the oil industry it's over we're near parity we don't need in feed-in tariffs in the exponential curve on solar wind can keep they continue to go down this is the biggest bubble to carbon bubble in world history how are we gonna address this in the next five years not 20 and X 5 the head of the Bank of England mr. Carney the Canadian as you know he was on the Financial Times was it two months ago with Lloyds of London saying this is an issue we've got stranded assets here no one's talking about it this is the next big crisis and there's been nothing like this because this is a crisis of the industrial era based on fossil fuels but what's interesting in Germany is once you pay the fixed cost the marginal cost of the solar and wind you know what the Sun hasn't sent us a bill yet the wind hasn't been invoicing us it's free so what happens when German businesses plug in and they already are to electricity and energy internet where a third of the electricity pretty soon all of it is near zero marginal cost and conversion of every single good and service across their value chain how does the Second Industrial Revolution company in a second industrial evolution country compete with that fossil fuels natural gas coal oil nuclear how does one compete with that in real time now so who's producing all the new energy in Germany there are four major power companies the mbw I work with their CEO it's Klaus and years ago RWE Eon vattenfall we thought they were invincible 10 years ago but what's happened to them is what happened to music companies newspapers book publishing etc all sorts of small players farmers small businesses neighborhood associations they created electricity cooperatives all over Germany they went to the banks the banks gave the loans because they knew they would pay back by the energy they produce nobody defaulted they're producing 96% of the energy of the 21st century we have lateralized energy this is power to the people they literally figuratively we over used the term in 1968 the lucky thing is Millennials have no sense of history so now they're talking about power to the people this time it's real time was a hope the big four power companies they're producing less than 5% of this because the energy they can't scale it they were very efficient at scaling concentrated energies let's be clear the soviets realized you had do it the same way we did it in in the United States and Europe you have to add vertically integration to scale centralized energies and these power companies and energy companies were very good at doing this very efficient they can't scale lateral energies the Sun shines everywhere the wind blows everywhere you have to collect it wherever there are people in buildings and neighbourhoods does this mean the end of the energy companies no but they have to change their business model so about five years ago Eon asked if I would debate their chairman mr. Tyson he's still there I did I said you're not leaving the Second Industrial Revolution tomorrow morning but the disruptions here now just like it was with television newspapers book publishing you have to begin now in the disruption and look at a 20 year transition I on how you ease off your legacy infrastructure for energy over 20 years and put in your new business model that can allow you to retire your assets so you're in two business models over two decades but the disruptions right now if you lose another year you're off and I said in the toilet and there's third Industrial Revolution the way you make money you will not generate any electricity we're all generating and where we live and worked we'll send it to you on an energy internet and you will make money by selling less and less electricity and he said now I'm lost I said you'll set up partnerships with thousands and thousands of businesses and you will help manage the energy flowing through the energy internet through their value chains you will help them with their big data you will help them with their analytics you will help them with their algorithm governance so they can dramatically increase their aggregate efficiency and productivity at every step of conversion across all their value and supply chains so they can dramatically increase their productivity reduce their ecological footprint and marginal cost in return those thousands of businesses they're going to share their productivity gains back with you the power company it's called performance contracts how many have heard of performance contracts it's already happening so at that first debate Tyson went like this last year he went like this he waited too long he put his nuclear and fossil fuel on the market there's no bids but he's moved to energy services RWE has moved to our model they have their leg businesses was there still there they have their new business models energy services along the outline that I gave you this morning eeehm VW vattenfall they're following inline ERDF and EDF we're laying out the mighty our global consulting team is laying out the third Industrial Revolution paradigm in parts of Europe we're now as you know in northern industrial Europe all of hawk de France EDF joined us day one Tokyo called they said well with you they're helping us lay down the infrastructure they're not leaving nuclear tomorrow morning but they're smart enough to know we have to be in two business models here it's good business what's Siemens watch Deutsche Telekom watch these companies Siemens is and all of these business areas already way ahead of GE watch Deutsche Telekom watch the big companies the and it's not just Europe not just Germany not just Europe China has been the big surprise I had never done any work there never been there president Z and Premier Li came into office they put out their formal biography I was surprised I thought it was actually a joke at some point but it wasn't and Premier Li announced and his biography did he read the third Industrial Revolution book I later found out someone slipped it to him as he was getting on a plane in Germany there was no films on the plane to watch their interest and guess he read my book so he instructed the central government of China to begin working on the narrative and themes I'm introducing to you this morning and boy did they work quick I've been doing formal visits with the leadership along young the Vice Premier than the national development forum Commission etc they worked so quick eleven weeks after the first visit the state grid which is the largest electricity grid announced 82 billion in the new five-year plan were started at two years ago it's already here 82 billion dollars to digitalize the entire electricity grid so that millions of Chinese people could buy solar and wind from their own companies because their companies are the biggest producers produced their solar and wind locally share what they don't we need back to the grid this is in real time they're coming together the communication internet with the renewable energy internet makes possible the automated transportation logistics internet we built the entire second Industrial Revolution on making cars and selling cars shopping malls suburban build-out travel and tourism is all about cars here's the rub where are my Millennials here under the age of 38 raise your hands raise your hand what is the matter with you do you realize that you're messing up the entire second Industrial Revolution apparently you do not want to own automobiles that's Grandma and Grandpa two automobiles sitting in the driveway doing nothing waxing them every two months you want access to mobility in car sharing networks not ownership of vehicles in old-fashioned markets do I have this right you have messed it up through every car shared we're eliminating 15 cars in production car companies know this some of your business people remember Larry burns the former vice president GM he did a study of Ann Arbor Michigan he said we're gonna eliminate 80% of vehicles here the rest are gonna be electric fuel cells are going to be cheating if he's right we can extrapolate that study we have a billion cars buses and trucks in the world today choking us in traffic they're the number three cause of climate change by the way the number one cause of global warming emission does anybody know what that is buildings number three is transporting we talk a lot about it does anyone know what number two is it's the quiet one that nobody talks about cows even the environmental leaders won't talk about it but methane produced by those cows I love cows there's 1.3 billion of them however and they take up 26% of the landmass of the world and that methane is 28 times more potent for molecule than co2 and the nitrous oxide from their feces is 280 times more potent and it's number two no one talks about it for fear we might have to change our diet we'd rather have extinction within three generations wake up number three is transport if Larry burns is right we're going to eliminate 80% of the vehicles the other 20% will be shared cars share trucks shared logistics there'll be electric they'll be fuel cell they'll be operating by near zero marginal cost so wind electricity they'll be 3d printed with advanced manufacturing with recycled materials they're already all of this is happening there'll be driverless in five years on road within 10 years on rail inland water and air maybe and drugs does this mean this is the end of transport no but they have to change their business model so about a year yeah I've been I've worked with Daimler and I'm working with for about a year and a half ago of Wolfgang Bernard remember who was chairman of Daimler Trucks he called me said join us in Germany we want to introduce a new business for Daimler Trucks a mobility internet and I always look to Daimler and Ford because they led us into the Second Industrial Revolution so so I joined him I laid out this narrative they brought 350 journals from around the world and then Wolfgang Bernard got up and he said well I want to tell you something in the last three years we have quietly outfitted 250,000 or 300,000 trucks with sensors all over the outside of the trucks they're already on the expressways of Europe those sensors are picking up data on traffic flows weather conditions a warehouse availability everything you need to know moment to moment for big data analytics along your logistics supply chain and this is what's really interesting they're not leaving trucks tomorrow they're still going to sell millions of trucks but they're smart enough to know they have to be in a transition strategy from seller buyer to provider using logistic networks in which they will probably eventually own the trucks and the logistics and work with companies on their analytics and big data so if you have a small or large business Diner helps you on your logistics so you never dead had you get to whatever warehouse you need that are cooperative and you dramatically reduce your cost so this is the cool part and you can see this up on Google or on our film third Industrial Revolution film which is on YouTube now they went up to a video feed and alive and they had a helicopter looking down at three trucks and we're all waving to the drivers and the trucks and then Wolfgang said to the drivers uh take your hand off of the wheel now take your feet off the pedals these became software analysts they trained him for new jobs new jobs no longer truck drivers while the data on the machine on the computer and then the trucks automated into a platoon train distance like a train going down the expressways these are mobile big data centers in real-time pretty cool huh Daimler Trucks I joined mark feels the CEO of Ford we he introduced our new film third Industrial Revolution which by the way is out in Google we've had two million views in the first eleven weeks it's all free we like open sourced no one has to pay and he he introduced the film at the Motor Show in Detroit and and then premiered it in various cities they're moving to a mobility internet that will go into each cities as a provider user services they'll provide the vehicles they'll be driverless they'll be owned by Ford and they'll help introduce those build vehicles and integrate them with the bike services the pedestrian traffic all with the apps so you have a seamless service smart business so they're coming together of these three Internet's communication energy mobility they go on top of the Internet of Things which is the built environment the buildings are the IOT not the cloud every building in the world is going to be transformed retrofitted and turned into a node that is a distributed big-sato center so we can distribute the data less vulnerable to centralized attack or monopolies every building becomes a big data center distributed every building becomes a micro power generation site already happening we're already introducing solar on paint facades and glass so your whole building will collect and each building will be a charging station for your electric vehicles that could either store the energy for the grid when it needs it or use it for your own vehicle the building's connect as nodes across entire regions and continents so he had the communication and that the energy and earth the mobility internet you have the Internet of Things across the built environment all working with each other to increase productivity reduce ecological footprint and fixed and marginal cost that's the system so then the question becomes this how do we finance this so at the EU we had this discussion when president Jonker came in and I said we have all the money the question is not the money it's how we're using it for example in 2012 when we first brought this up which was a lousy recession year you know how much we spent on infrastructure in that year in Europe it's just a terrible recession year 740 billion euros that's just in a bad year I said the money's there the problem is were taking the money and we're spending it on the old Second Industrial Revolution infrastructure of centralized telecommunication fossil fuel nuclear power internal combustion transport we can't get any more productivity we can't create new businesses we can't generate new jobs cuz the productivity peaked at around 20 percent of aggregate efficiency so I said we don't want that old system infrastructure to collapse the roads pipelines so we have to put quite a bit into it but then we should put at least half of the money into this new third Industrial Revolution digital infrastructure to create the new business opportunities that plug into it and the new employment that will be engendered from it we can get there in 30 years that's not futurism we did the whole juvenile first Industrial Revolution in Britain in 30 years 35 years we did the whole Second Industrial Revolution juvenile infrastructure from 1903 to 1929 less than 30 years why would this take more time but they had the story the narrative the will we're now engaged in all these isolated little silo projects in every industry and every city can claim they have all these great new projects that are green and nothing's happening because it's not integrated into a new digital infrastructure to manage the value chains and supply chains as simple as that not rocket science virtually every industry will be involved in this deployment and now we want to talk about jobs ICT power and utility consumer electronics transport logistics construction real estate advanced fabrication manufacturing all the industries have to involved in the 20 30 40 years out of this infrastructure and then helping to manage that infrastructure along with the new players this means millions of jobs we have to take the entire stranded infrastructure of fossil fuel and nuclear power and clean it up and retire it and then we have to transform it all into the infrastructure the first thing we have is we have to retrofit every building in the world because they leak they have to be made energy-efficient then we can turn them into a node that's a big data center micro power generation site and charging station who's going to retrofit all the building stuff we're already retrofitted hundreds of thousands of buildings of Germany and they even little denim I've done this robots are not going to put in your insulation in your windows and your doors nor will a I this is millions and millions of working people semi skilled skilled and professional all over the world that's a huge job producer we're now in northern industrial France we have prepared the son the grandchildren of coal miners there thousands of them are now retrofitting buildings all over northern France you've come and see it they're making money we have to take the entire fossil fuel complex and nuclear and we have to transform it to renewables that's a big job in retiring those assets but it's an even bigger job who's gonna manufacture the solar and wind who's going to assemble it if you ever seen a wind turbine assembled robots aren't gonna climb up there robots are gonna climb up on your roof with AI and the AI is gonna instruct the robots how to put the solar on yeah I know a lot of it's silly it's gonna be human beings and it's very labor intensive and a sigma or Gabriel can tell you they created hundreds and hundreds and hundreds of thousands of jobs and when they got to 10% of their energy electricity we're normal just 10% they're now 35 they created 100 350,000 net jobs that's more than the entire rest of the energy industry put together and they were only twenty to ten percent of the energy this is real numbers who's gonna put in all the underground cable for 5g big data for the telecom our robots gonna dig down under the ground and then a eyes and help them put in the cable all over the world I don't think so who is going to set up and the Internet of Things across all the building structure who's going to put in all the charging stations millions of them this requires a massive last surge of employment and I'll and the employment with this we have some of you know I wrote a book called the end of work 1995 which began this debate work I said we're moving to an automated world and then about 20 years later we have a new generation and place like MIT now there's basically a reconstitution of what we said in 95 because nothing's changed but they needed to read the last part of that book I believe we had in the third Industrial Revolution I said in this book we have one last surge of mass employment that's the lay out the smart infrastructure for a 21st century it's going to take two generations it's going to take massive employment we know this right now but once that infrastructure is in it's smart it will run by small supervisory workforces it will run by algorithm governments that's true but there are 40 more years of massive employment to lay it in so we have to prepare again a transition in our education so we prepare young people for the digital skills which they already have they already have the digital skills to make this transition the infrastructure and they also have to prepare them for another form of employment what is it that's all in the last part of that book in 1995 the other part of the employment is not going to be in the market or the networked capitalist economy the other part of the employment is going to be in the sharing economy the social economy the nonprofit economy because that's where you need human beings machines are only supplementary but they can't be replacements I'm talking about culture environment education of Health you will never have a robot preparing a two-year-old in a childcare center to be a human being they'll bring the orange juice to the kid at lunch you require human beings this sharing economy social economy nonprofit sector is the fastest growing sector in the world sent in those last 20 years it's growing and a multitude faster than the market economy in the 40 nations surveyed by Johns Hopkins every four years it's about 10 percent of the employment of the u.s. 15 percent of employment in California 13 14 15 percent in Europe and it's self-sustaining it doesn't rely anymore on government grants and philanthropy that's a small part of it it's fees for services health care education environment fees for services so we will begin to see a shift over the thirty or forty years lots of traditional jobs digital natives in laying out this infrastructure then new businesses as they plug into this infrastructure Kate all sorts of new business opportunities because they're plugging into this new infrastructure all digital and at the same time we'll see a somewhat of a shift going on increasingly to the social economy and I'll leave with Alfred North Whitehead I think he got it right back in 1931 at the height of the just the depression there was a new term called technology displacement where technology was displacing workers faster than we could find jobs for them that began this process and it really sped up in numerical control in digital technology in the 1960s he wrote a little seven-page letter to his grandchildren scribbled it off no one ever read it I put it in the new book I thought he should bring it back seven pages he said to his grandchildren don't be frightened about technology displacement it's the next stage of the human saga why should we be stuck in history in other words why is it ordained that from here to the future of history we'll all be doing the same types of employment in a traditional market economy if we thought that way we'd still be serfs and we still be in a servant and safe country so what I'm saying if we get any of this right over the next 30 or 40 years we make this massive transformation in the infrastructure with the traditional digital skills we already have we create the new business models that plug into it we blockchain them into competencies at the same time we prepare in our education system for a distributed education where you can also provide the kind of services in the social economy we're not going to pay people just not to work I have no problems with guaranteeing an income for people who want to have an alternative way to have their life manifests themselves people want to contribute they just don't want to have money to do nothing so the opportunities are here and if we get any of this right here's what I hope happens 2060 your grandchildren Millennials they look back and they say what a great grandma great grandpa do for a living you said well great grandpa he drove a truck on 19 kilometers of a road back and forth and delivered goods every day for 40 years and they'll say what what great-grandma she was on an assembly line and she took widgets off to someone I put him in plastic bags put him in a package they will be a shock to hear about this as we were to hear about slavery and serfdom before the Industrial Age we can do better so my hope here is at places like st. gallen one of the great universities and business schools in the world it's time to move toward a new distributed education that's in line with these new possibilities I think the challenges are enormous I'm not going to tell you I'm either optimistic or pessimistic I'm only guardedly hopeful we can make this shift in time it depends on the time of day I think this is really the last race either we get this right and we move quickly and we commit ourselves to this this journey or we're lost and what I say to governments and when I say to any company if you have another plan for addressing climate change and moving the economy and creating jobs in the 21st century tell me what it is and I don't hear anything except protecting an old legacy industry that's taking us into the abyss so I think I'll leave with the last thought of my advanced management program in those 15 years and the first day with our CEOs I say to them go home tonight and I want to think I want you to think about your worst nightmares of what could happen to you as a CEO with your business just all night I want you to have a nightmare then the second night I want you to go to bed maybe take some valium or something then I want you to dream about all the opportunities this crisis will bring to you to completely transform your business and create the vision for the next generation this is what we need to do it st. Gallen and let this spread across which saloon around the world thank you [Applause] Jeremy there was 62 minutes the full casting was just a little bit wrong but can I say as as a lecture the ideas were fascinating and it's theater it was a bravura performance and unlike myself sitting up here in a position of inequality you put yourself with the people and I'm sure the Swiss will love that I just start with one question and maybe two but very quick you talked about stranded assets which for anyone in the financial world is frightening let's assume Amazon gets into retail banking or banks stranded assets secondly you talked about the bright net which I love abundance sharing and so on but you also talked about the BOK the dark net what in your judgment is the one top priority of government in this after this it'll be open to you so do please prepare questions the stranded assets this is real and this is got to be dealt with I thought it was very bold for mr. Carney they had the Bank of England to meet with Lloyds and say we got an issue here this is a big big elephant in the room this is not going to go away there are the pond utility companies are making the shift in Europe at least and in China not in the United States we have a few like the CEO of calm medicine in Chicago excellence top system and a few others but not happening but it's happening in Europe and China in the power utility industry a few of the energy companies a few a number of years ago as you know began to flirt with solar and wind but it was very small and it's still small but now a few of the energy companies and some of the smaller big ones are now beginning to see the need to really shift quickly they see the opportunities here there are a few energy companies that are just not going to be there they're not going that way but we're seeing some energy companies begin to make this ship it's difficult for them it's very challenging and remember they supplied us with the energy that managed our civilization for a longer time so it's not easy in terms of what needs to be done I think you said on the regulation of the plan of the darknet I'm impressed with our Competition Commissioner and the European Union vetted er she has been bold the Younker administration has led the world as you know I'm looking at the regulatory issues around privacy and legislations being passed and been passed for protecting privacy protecting people's data ensuring that it can't be used by the Internet companies without permission beginning to manage and take a look at the monopoly positions they have so if you take a look at what's going on in the European Union at least these regulatory issues have now come to the front they have not yet come to the front of the US but now given what's happened to Facebook we are really having conversation on this but I suspect it'll depend on a change in governance perhaps in the next election but this no one's going to be able to hide from this whether it's the Asian countries European countries the Americas you know and I know it's coming and you know look at AT&T it's a good example of doing the right thing in during the antitrust era the early 20th century in the United States as companies became monopolies we broke them up or we regulated now in our country we kept them private 18t is the best example we kept them private we like what they did but we regulated them in terms of access price and they had to set up a certain amount of their of their profits went into the Bell Laboratories which gave us solar panels and the computers and everything else so they were a success story so I don't I think it's naive to think that these big global companies will not be regulated they will some will move them public some private but they will they command a good service I love Google I think it's the magic box I use it all day long and they've done a great service now they have to come under the scrutiny of Public Regulation and governance so that the darknet doesn't prevail terrific could we have the lights on please I am the lights on the audience right there's a hand up there yes I see the hand I'm not sure who the person is but that it's that that hand now the one that's up the one that went like that that's the one but there's no body to go with it okay you found my hand first of all let me say that I was deeply impressed with such a sweeping sorry just could you say who you are yes my name's Richard caster I'm the CEO of Zurich Switzerland and I've had tremendous enjoyment these past few days this speech however has been quite impressive really very impressive deeply impressive I have one question for you because you look at things in terms of you know the convergence of how you know basic physics and basic physical principles influence where we're going then I've always seen the history of mankind as a convergence of ideas so when we look at the early very early tribes gradually coming together they exchanged ideas and then with the the the Agricultural Revolution when people invented the ability to harvest rather than hunt and gather they enabled cities and cities enabled more ideas and obviously this has continued and the internet for me is one of the main most amazing convergence of potential ideas now the question I have for you is there's something else that is happening with this ad the amount of ideas are available but also the dissemination the democratization of possibilities what about weapons of mass destruction what about the potential to do incredible damage that over the years is becoming easier and easier and I would say you know since say the mid 40s when it was really possible to do serious serious damage with a single event to the entire planet it has become almost easier to do this but distribute it and not necessarily atomic warfare but it could be the design of new microorganisms or whatever it is but the fact is that this has become more available do you see that you know especially when you're talking in terms of darkness how do you see this democratization of weapons of mass destruction and what could we do about that thank you very much we've been living off of a very thin thread of good luck the potential for this new generation of weapons that could be democratized and used anywhere is really staggering some of you know I was critical of some aspects of the biotech revolution and I proved of other aspects I was very critical of the possibility of the widespread use of potential dangerous biological agents that could be manipulated and easily spread in a new form of weaponry to which there's no resistance that's still a big big challenge and when it comes to algorithm governance it's equally frightening and that is as more and more of our weaponry becomes a creature of algorithm governance we're now moving into an era where preeminence which is very dangerous where the militaries and others are saying we if we collect enough data we can we don't know what we don't know is that as Rumsfeld once said the defense secretary there's what we know there's what we don't know then there's what we don't know that we don't know it sounded silly but it wasn't so now there's an increasing it's increasingly vote for military establishments and governments to begin to collect data they will allow two of them to assess every potential threat and then with preeminence be able to clarify which one might be the most imminent and then act on it before it happens in which you create your own effect this the this is where all agency is taken away from us in a democratic governance and even from our governance and that agency is placed in the algorithms those algorithms are always biased to whatever the feelings are the people putting together the data and all the data is always past data it's never new and so it's based on what's already been collected very dangerous when you use preeminence and military terms to try to anticipate a future then act on it before it happens that along with biological weaponry and drones it's a very dangerous world on the other side of this in the countries that we work with in the regions that we're scaling up now where as I say in northern industrial France on our sixth year we're now in 23 cities from Rotterdam to The Hague we're now in all of Luxembourg but in some of these regions we're talking about a new function for military and that is while they're still a military function the function moves to disaster relief and management and resilience in the systems because we're going to need military to be able to manage an era of unpredictable climate events that would be equally catastrophic or more catastrophic than anything we can imagine with a shirt with the accept exception maybe of nuclear war or a virus that we couldn't control now that part of it is having the military transformed into a new mission which changes its modus operandi its thinking etc this is beginning to happen and all of these climate events we've had to bring in the military we've had to bring in the Army Corps of Engineers so I see the military playing a role in biosphere defense and that may change our feeling over two generations on on what our real security threats are they're really going to be on climate events that could really destroy our civilization it's not an easy challenges extremely worrisome what you raised next there was a lady over here could you stand up and give your name and ask a question briefly if possible of course I'm a women so my name is Cordelia chateaux i'm from luxembourg and i would like to know since you counts a lot of countries which country is doing really well and is there anybody who achieved politics in a way he imagined so far well as you know we spent two years ago in Luxembourg with at the inche Neider the the vice premier and the economy minister and as you know two years ago we spent a year with assemblies there our belief on how you make this transition and this is don't want to talk to the companies for a minute the problem we're facing here is you've got 7,000 cities that have signed up to the code cop21 covenant cities climate change they can all show you all these wonderful little projects like hydrogen buses and solder leads building and nothing's happening because they're not changing the infrastructure communication energy mobility the IOT in which everything plugs in so it's all dead end projects there's no scale the key is to scale for companies and the way we scale we have to do whole regions at a time so there's enough opportunity for small medium sized businesses large companies cooperatives to scale regions quickly so in Luxembourg where we worked on the plan with at the inche Neider over 300 people two or three hundred people were involved in all the committees we we believe that you have to bring the whole region together all the municipalities local governments the universities the research institutes of civil society and you have to change the form of governance so it's distributed not centralized let me explain we have to have a form of governance here that's commensurate with the infrastructure we're creating the First and Second Industrial Revolution infrastructure communication energy and we're building were designed architectural from the engineering perspective to be centralized top-down they had to be proprietary to protect intellectual property to return the investment to shareholders and they had to be vertically integrated in order to make it all work and it was a system that worked the third Industrial Revolution infrastructure has a totally different offered architecture it's designed the internet the Internet of Things to be distributed not centralized you only get the the productivity out of it if it stays open and transparent and not monopolized enclosed if it stays monopolized and closed by governments or companies you lose the network effect the more in the network the more everyone benefits open source and it has to move laterally scale its networks not vertically integrated in order to get your returns so if that's the network our school systems have to reflect that with distributed open transparent laterally scaled education I'll get into that later if you'd like to but the Regents have to do that so what we said to Luxembourg in northern industrial France and Rotterdam to the Hague now remember northern industrial France is the old mining steel coal region all depressed six years ago the Netherlands rather than Hague is the petrochemical complex of Europe these are tough areas Luxembourg the financial center we said to the government if you're willing to create a distributed transparent democratic assemblage and bring together hundreds and hundreds of people not in focus groups or of stakeholders meeting 10 months of hard work the universities businesses etc will work with them with our global TIR Consulting Group of the best engineering scientists and economic modelers but you do the plan based on this architecture will help you with a technical but you create the plans this is what we call lateral governance and at first everyone was skeptical believe me but after 10 months they realised they did the plan and now they scaling because the whole region's involved in RIT routers of what government comes in this will continue into the future for two generations because they are now wedded to this as part of their legacy to their children and grandchildren this is the way you have to scale it we have time for one last question there's a person right at the back there who looks to me to be quite young and I'm can ask you if you were to ask the question hello everyone my name is Daniel and I'm a PG student from the University of Manchester and I do feel that nowadays all the leaders know what problems we have worldwide and there's many meetings where they discuss this like Davos forum and sangalans symposium and whatever but I feel that action lack a lot behind so my question is how do we switch from a lot of talking and to little action to less talking and big impactful actions the great question what really characterizes human beings we're now learning from our fellow creatures were not that special our fellow creatures have language they even have music and they are able to be intentional and they show agency and they take care of their young and the mammals also create some form of empathic bonds all of that but what's unique is our language we are a narrative species we live by our stories we live by our narratives we live by the way we articulate a future we want what's been sorely missing up to now is a narrative all we've been getting is a shopping list of technologies that can be introduced the narrative I outline to you as my today my wife says this is not rocket science this narrative it's common sense the reason it resonated is there was nothing very fancy about it it's common sense it can be done the question is why isn't it being done first we need to share the Nereus so what we've done is we did a film advice I'd never heard of I say it's it's all for the young people under 38 but one of the three guys that runs it says would you do a film so we did a film we brought in Millennials from around New York in a warehouse laid out this narrative like I've done here then the Millennials spent 45 minutes talking about how this should be done and we're that narratives now moving in 11 weeks around the world we have two million views in the first eleven weeks we even didn't know if Millennials would ever spend twenty minutes or ten minutes but evidently there's enough of you out there that wants to learn from this and now they're starting to set up community groups at the universities in their neighborhoods to begin to say how do we now take this and move it our roadmaps that we've done in Europe those three roadmaps are those three regions they're open source you can google them up there 500 pages each 150,000 words smart Europe is now a plan of Europe the plan we did is now the plan for the EU and we did a plan in concert with China called internet plus these plans are operational but they're not quick enough on scale in Europe finally I'm gonna leave you with this if it's a story about the narrative here's what's giving me some some little bit of God that hope here that we can do make this in time maybe I'm sensing a shift in the Millennials under 38 in their consciousness this doesn't change without a shift in consciousness technology just enables it does it's not a fait accompli they may tell you in Silicon Valley about this utopian future it's coming that's naive technology enables then it determines it's determined by the journey we set and I'm guardedly hopeful because I noticed from Millennials a change in three things the way they think in three ways which gives me some hope the way they view freedom power and identity to the earth they live in freedom you and I grew up to believe freedom is the ability to be autonomous self-sufficient independent not beholden others a sovereign to ourselves and our government should protect our rights to do that correct right so for kids for the Millennials this is death what I just said take away their cell phone they want to be autonomous independent not beholden others an island to themselves for them freedom is measured by the amount of communities they're in and the networks they're engaged in they believe freedom is inclusivity and access not exclusivity and ownership it's a completely different idea about freedom I see 100 Millennials going like this then they have a different idea of power you and I grew up with a pyramid that's what a power is about and we know it from history but if you're a digital native you see power in lateral networks where the more each person gives their talent to the network the more the network benefits the more your individual social capital goes up totally different idea about power and this is the final big one guardedly hopeful we grew up in a geopolitical world we grew up to believe that each individual's the sovereign of the country we compete with other individuals in the marketplace for scarce resources zero-sum game our governments compete with each other in the marketplace in battlefield zero as some scarce resources zero-sum game we fought two world wars one out of coal one Royall so the question is how do we address climate change and bring the human family back to life with that worldview can't be done we have kids coming home now in all the countries that I'm visiting with biosphere consciousness not geopolitical consciousness they're just beginning where they're seeing that nineteen kilometers from the stratosphere to the land as their home that's the biosphere where all life in chemistry keeps this beautiful experiment going we've got kids coming home and saying to their dad why are you using so much water while you're shaving we're in drought here wildfires turn it off biosphere police these kids they're saying to their parents why's the TV on in that room we haven't been in there in three weeks wasting the electricity why two cars why not share one and get rid of the other one here's the one that particularly my wife and I are fond of because we are heavily engaged in animal protection issues animal rights issues a lot of kids are coming home and asking where the hamburger came from on the plate at dinner it really are they're asking if they came from a rainforest did they destroy the trees for six inches of topsoil to graze the cow for one burger and the kids connect the dots if those trees are burned down for six inches of topsoil to graze that cow for the burger there's rare animal life that only live in that particular rainforest they go extinct that's happening in real time because of the cattle culture there then they realize that the trees are burned down they're not absorbing co2 from industrial emissions from northern industrial countries and the temperature of the planet goes up and that means some farmer can't feed her children and son in rural India because she's getting summer spring floods and summer droughts they're connecting and realizing everything we do literally affects somebody else another human and other creature the ecosystems they're learning we live in an indivisible biosphere this is not just an academic exercise this gives me hope B so if we can pass this on in three generations a biosphere way of thinking where each of us are responsible for our 19 kilometers each region each community comes together like those three or four regions in Europe and they become responsible for their 19 kilometers of the biosphere and then we lateral eyes this in a global economy so we all become response regionally and interconnect I have some guarded hope we may make it through this period of history it requires the best of the human species and we are a species that has soft wired for empathic distress we are soft wired to be social that's our primary Drive the predatory drives competition utility pleasure seeking those are drives when the primary drives aren't met we need to meet that primary drive of extending our empathic sensibilities not just to the human family but to our fellow creatures and the ecosystems were living in in real time I think we can do it we've got the capability in our B now we've got to move from theory to practice and what I would say they'd say Gallants start right here one of the great institutions in Europe in the world right here began across your educational curriculum to move toward distributed education clinical learning service learning in the community began to move climate change not as one issue in one course but how do we address climate change across all of our disciplines and begin to create resilience Switzerland resilience st. Gallen if they can do it in the Netherlands and northern France we should be doing it in every single region here in Switzerland tomorrow morning Jeremy you're a great storyteller and frankly I think I was just looking at people because the lights were sort of not entirely dimmed as he was speaking and people were really paying attention which if you're a speaker is the most you can ask but I think this has been more than just listening to a story it's really been a call to action and I must say being based in the middle of the City of London I see this change as having dramatic effects in a major way in banking I mean we are living it in the city of London and in New York and so on and therefore I think your call to us this morning and the call to the institution this great University the University of st. Gallen you know it's something real its immediate and and it's human and you repeat you're appealing to our humanity as well as just our internet so all I can ask people to do is to express our appreciation in the usual way [Applause] [Music]
