If sharing economy is a river bed, it already has the power of tide
Editor's note: here is a speech by Jeremy Rifkin, the father of sharing economy, at the GIC global innovator conference. He describes an ideal and utopian social form of sharing economy: with the exponential growth brought about by the computing revolution, energy, communication and transportation modes will be reshaped, and these modes will eventually accelerate the arrival of "Sharing Economic and social forms" Step.
Jeremy Rifkin, the father of "sharing economy", President of Washington D.C. economic trend foundation, a social critic and best-selling writer with international reputation, is the author of "the third industrial revolution", "the end of work", "the century of biotechnology" and "the age of path". Each book has been translated into more than 15 languages. Rifkin is also the president of the Washington D.C. economic trends foundation, and has served as an adviser to former European Commission President Roman Prodi.
1. The birth of a new economy
I think it's great to be here. There are creators of the new millennium. At the beginning, I would like to make it very clear that GDP is slowing down, in every country and everywhere. GDP slows down because productivity slows down, as it does in every country in the world. This has been the case for the past 20 years. It is very clear that we are beginning to see the birth of a new economy, and we are also seeing the birth of a new economic paradigm. We can understand it as crisis and opportunity.
We need to know how the new economic paradigm has changed. We want to know how it has come into being. We can draw a road map. Your generation can draw it and see how it has gone in history. There have been almost seven changes in economic paradigm in history, which is a structure of collaborative sharing. They have one thing in common, that is, at a certain time, there are three different technologies and integration, so as to create a common technology platform, and new infrastructure, resulting in fundamental changes, to change how we manage in the whole value chain.
The first of these three basic technologies is communication, which can manage our economic activities more effectively; the second is new energy, which can drive our economic activities; the third is new transportation mode, which can make our economy operate. Therefore, fundamental changes in the fields of communication, energy and transportation, as well as logistics, will change the basis of our management economy and economic ability. Economic activities, to manage empowerment, and to manage our products and services.
Example 1:
The first industrial revolution took place in the 19th century and the second in the 20th century. The first industrial revolution was in England, where the British steam engine gave birth to a new mode of production. Later, telegraph was invented in the whole UK. These communication technologies combined with new energy, steam engines were added to wheels, locomotives were made, and then there was a train, so that the whole economy could run on the national railway system.
Energy and transportation are crucial, giving birth to the first industrial revolution and infrastructure. Infrastructure has greatly improved productivity, and all economic forms have emerged. This is a platform. Because once the infrastructure is in place, it can increase productivity, manage energy, and drive our production activities.
The second industrial revolution was in the United States and Germany. After the core power and communication changes, in economic activities, we had a great leap forward, which was driven by the radio telephone. With the telephone, it is as important as with the Internet. After the telephone, it is radio and television. Henry Ford invented the automobile assembly line, pushed all people onto the road, and then the road transformed all economic activities.
The second industrial revolution came about in the 20th century, peaking in 2008, when Pollock crude was less than $140 a barrel. In 2008, all purchasing power declined, in all places, it was an economic earthquake! The economic market collapsed 60 days later. We all felt it collapsed, but there are still bigger hidden dangers. The sun of the second industrial revolution has set because of new electronic communication and new energy alternative to fossil energy.
Example 2
When Merkel became chancellor of Germany, she asked me to go to Berlin. Just a few weeks after she took office, she asked me to solve a problem: how to make Germany's economy grow? When I arrived in Berlin, I asked Merkel's first question: "Merkel, how do you make Germany's economy grow? How can the EU grow? " How has the global economy grown in the past era? Relying on communication technology, energy and transportation, they are all maturing, but they have not brought any productivity improvement. How can they grow?
A few days ago, Merkel and I made a plan for the third industrial revolution. A new matrix, a way for energy, transportation and communication to promote common economic development. Finally, Merkel said to me, "Mr. Rifkin, the third industrial revolution will take place in Germany!"
This is the third industrial revolution: communication technology. Any economic activity, once combined with the Internet activity, can reduce the marginal cost and improve our economic life. All of you have iPads, all of you have smartphones. Such technology has been developing continuously in the past 25 years, which is the birth of the Internet. These communication technologies have been digitized, and they are all changing. We have digital renewable energy network, digital automatic GPS, and driverless network, which can have a three network integration.
Transportation, energy and communications can all be digitized to make economic activities work. Internet plus Internet plus has many Internet bewilderment, which tells you that there is a misunderstanding about Internet plus. This is not to say that everything can be digitalized. What I am talking about is Internet plus, triple play, communication, transportation and energy, which is "Internet +".
These three Internet are all on one platform, which is on the Internet of things. We will connect all the sensors to analyze the real-time data. What is this data for? They can "go back and forth" in transportation, communication and energy networks, and all people can manage and run economic activities. We have sensors in agriculture, sensors in factories, sensors in smart homes, sensors in smart cars, smart offices and smart warehouses, all of which can form big data and promote the operation of economic activities in the whole system.
2. The world will change on a large scale
By 2030, we will have a big connection. We will have a network platform open to all, which is a key. We will have 3 billion people connected to the Internet, which is the current situation of the Internet of things. In the future, there will be a $25 smartphone that will allow everyone to connect to the Internet. You can buy a smartphone for two dollars a day, so it's a big leap forward. Since the birth of the first cell phone, we can now see a cell phone with almost no cost. What happened?
This is change, large-scale change. We need to see the development of Internet platform, and we need to deal with it seriously. We need innovation, the Internet of things platform is very cheap, almost zero marginal cost. We can reduce the data and eliminate the useless data. We can see the activities we connect, we can store the data of these activities, we are also engaged in economic activities, we are also circulating in this economy, we are also dealing with this value chain every day.
If you are a small and medium-sized enterprise, or a small enterprise, what can you do? You can intercept your value chain data on the Internet of things platform, and then use the analysis system to do your own algorithm and application. Therefore, you can continuously enhance the efficiency of your algorithm, and each step can enhance the efficiency of your value chain. The efficiency of the algorithm can improve 86% of your productivity, and the next 14% is done by machines and people. With no cost technology, you can create your own applications and algorithms that allow software to manage and drive economic activity 24 hours a day.
What does that mean? Now there is a new platform, which can greatly improve productivity and reduce marginal cost (marginal cost refers to the increment of total cost brought by each unit of newly produced products or purchased products). For example, the cost of producing only one car is extremely huge, while the cost of producing the 101st car is much lower, and the cost of producing the 10000th car is even lower.
Marginal cost is a kind of cost. After you pay the fixed cost, the marginal cost will be generated in the distribution of products and services. I teach at Wharton Business School, where we teach new leaders to constantly invent new technologies, improve productivity and efficiency, so as to reduce marginal costs and increase market value. But we never thought that in the capitalist society, the marginal cost would approach zero.
3. Sharing economy is growing
With the development of digital revolution, productivity has become so advanced. Now the cost of services and goods is very cheap in the capital market, and the marginal cost has been reduced to zero, which promotes the birth of a new economic system, that is, the sharing economy. Everyone has been involved in the sharing economy, so what is this? Now it is a new form, sharing economy. This is a very small baby. Under the leadership of the capitalist parents, it is now thriving. Sharing economy, very young, has not grown up yet, and has no consciousness.
In the process of sharing economic growth, let it find its own position, let it find its own direction. Capitalism, the parent can nurture the child and build a relationship with the child. So my advice for innovators now is: you have entered a very fast-growing economic society. Now it's the economy of interaction and exchange, basically at zero cost. For a zero cost society, it is becoming more and more common.
In 2015, capitalism will not become a completely dominant social form. It will share this stage with the sharing economy, which is growing up gradually. Now in the society of young people, in your life, there has been a shadow of the sharing society. Let me tell you an example: for the three Internet of things, including the interactive Internet of things, in fact, it has developed in the past five years. In time, all the people in this conference hall, including tens of thousands of young people, will produce and share services and goods at zero cost. With the development of digital technology, you can be a musician without any fixed cost. But if you want to share the music with others, you can share it with one person, or billions of people, on your smartphone, and share it with them in a basically cost free way.
We have tens of thousands of young people who are producing and sharing their videos. There is no tax and no cost. So, so many talents are communicating with others at zero cost. We now have tens of thousands of students who take some of the best university courses in an open classroom. If you share this class with anyone through the Internet, it's zero cost. It's going to be disruptive, it's going to happen in 15 years.
The great industry of the 20th century should also be on the decline, and television also began to decline, because we found that we could not share the content of television with you. Another example is Wikipedia. You can share knowledge, and the cost is zero. So, when some big industries are in decline, our own companies have begun to produce, some are profitable, some are unprofitable. We have started to create different resources and different ways to share our products and services. Some people are in the market, but more are in social media. You can create some activities, connect different websites, and create value, which is subversion.
We can imagine that from now on, the third industrial revolution will be presented in a zero cost way in a virtual society. I said in my new book "zero marginal cost society": we can change and break through this firewall. Now under the line of zero marginal cost, it is affecting our real society. That's why a large number of innovators will come into being in your generation. We now change the Internet of transportation, because there are numbers, renewable energy, and GPRS automatic driving system.
The third generation of industrial revolution will be built on this platform, because digitalization is really taking place in the form of zero cost. We will create all innovations, all applications and all networks that can be realized in the third industrial revolution.
4. New energy generated by marginal cost, no cost
Let's take a look at Germany. In the past decade, since Merkel said that we will have a third industrial revolution, what happened? Now 27% of Germany's electricity is generated by wind power, without any cost. By 2022, 38% of electricity will be generated through solar energy; by 2030, we will find that after 2025, 40% of electricity will be sent through renewable energy. At that time, all energy sources in Germany will come from wind, solar, biological and tidal energy.
Solar and wind energy will become extremely common in 2025. In 1970, it might cost $1150 to buy a solar power plant. This year, it's about 66 cents. It's down dozens of times, as cheap as smartphones are today. In the next 15 to 20 years, this technology will become more and more common and applied to the third industrial revolution.
Do you know why? Because the industrial revolution itself understood that. In fact, there is almost no cost for solar energy and wind energy. Solar energy can bring huge revenue in Germany. So, in Germany, solar energy, wind energy and thermal energy are all free, and their taxes are also falling.
Example 1:
In Germany, 100% of energy consumption is now zero. Once any company joins this platform, it will greatly save your energy and increase your production capacity. Because the boundary cost is zero, energy use costs almost nothing.
There are four major global energy companies in Germany. They are large and vertical companies and global multinational companies. For large energy companies, they only generate 40% of the energy, there is no way to further expand, there is no way to continue to produce fossil energy.
For new energy, you can produce in small areas, such as solar energy and wind energy. In music, sports, newspapers, television, real estate companies and other industries, a cooperative system has been established. They all get fixed interest loans from banks, which will use the money saved by these companies to exchange their loans. All the people have obtained these loans, and they have the ability to generate new energy. When they are together, their enterprises are back on track, which is called the T-shaped economic growth mode.
5. Everyone will generate new energy
What does this mean for energy companies? They have to change their status quo and improve their status at the same time. In the future, tens of thousands of people will produce their energy in digital and on the Internet. In a 10-year economy, we will produce our electricity around the world in a state of sharing economy. In 25 years, you will see tens of thousands of innovators in this generation, and everyone will produce their new energy. In developed and developing countries, they can produce this kind of energy: wind energy, solar energy, thermal energy, especially solar energy and wind energy.
So, what's the biggest model of energy companies? Generate energy, transfer energy to us, manage this energy network. You manage the energy network, and you can sell it. More energy is sold and you can make more money. So the main way we make money is to sell electricity. As a power company, the company has established a contract center, large companies, small companies and private companies, and managed all the value chains.
But this marginal cost, for the company, can be greatly reduced. There are a lot of companies that share their productivity and can go back to energy companies, which are called "reverse contracts.".
What does China do now? In the past few years, when the new prime minister took office, although Premier Li Keqiang did not see him, he often said that he had read my book before, including the third industrial revolution. Now he has come to the central government, including the State Council, to put into practice the ideas I just mentioned to you. China is really on the same pace as Germany.
In the past few years, when I first met Vice Premier Wang Yang, China's minister of energy said that the central government has allocated $110 billion from four years to add a new model to China's power equipment. So everyone can share and produce, just like Germany. Look at Germany, look at China, look at the European Union, all of them are the same. We give
What does that mean? For a medium-sized American city, you see we can reduce production by 80%! All cars can be reduced, which is brought about by car sharing. Cars are the third largest source of emissions, the first is our buildings, but we can reduce emissions through renewable energy.
The second largest emission source of carbon dioxide, do you know what it is? What is the second largest source of climate change? It's beef consumption, it's animal husbandry. No one wants to talk about animal husbandry. You know in China and the United States, we need to change our food chain. You can deal with the second point.
The third is traffic. 80% of cars have to be reduced. What about the 20% of the cars needed? It may be electric, it may be driven by renewable energy with zero marginal cost, it may be 3D printed. Now the first 3D printing car is on the road, and it may also be driverless. These are all zero marginal cost cars, which can be realized in less than 10 years.
Chrysler already has a mission, driverless technology will be on the road this year, this is a revolution. China is the leader of solar energy and wind power. Now it's time to be the leader of electric vehicles. There are two modes for the transporters. The first is the second industrial revolution, and there will be millions of cars in a period of time. But the third industrial revolution has come, and there will be fewer cars. Therefore, in this new era, transportation companies can change our logistics network, or use the low emission mode to promote, which can be zero marginal cost operation.
6. Share wisdom
There is room for sharing, but you have to be a smart business person. On the board, they are reading zero marginal cost, which is read every week. Let's take a look at the transition from the second industrial revolution to the third industrial revolution? Where are we going?
You are all young innovators, you are social entrepreneurs, but you need to have an innovator model. The sign of a good life is that everyone can share their wisdom and share it with the public.
Everyone, we are all innovators of a new generation. Adam Smith said: "if people only pursue their own interests, regardless of the interests of others, their own interests will not be realized." Social innovators, you have different ideas, because you have the Internet. You should know that if you share information and talents in an open source way, you will form a network, which will benefit you.
In my generation, and in the previous generation, the people born in the first industrial revolution have a basic philosophical thinking mode. We believe that freedom is exclusive, and we all believe that everyone has autonomy. Everyone pursues self-interest rather than public interest, but achieves public interest by pursuing self-interest. This means to be free, you need to be independent, you need to form an island, you need to be exclusive, you don't need to rely on others, this is the definition of freedom.
In China, there are Taoist, Buddhist, Confucian traditions. They believe that they are not only autonomous but also pursue a social nature. Each individual's personality can be sublimated by contacting with other people and society. When the Internet plus generation grows up, people will have a shared network. Freedom is not exclusive, but common prosperity. You are all connected. You're connected, you're connected, you're in a network, you're free. Because you have more power to create relationships and live better. This is a totally different understanding of freedom.
Our understanding of rights is also different. Those before the Internet believed that our relationship was a pyramid, from top to bottom. But your young entrepreneurs say that this right is a ladder that we can all share constantly. If you improve your ability, others can also benefit. So, it's something like oxygen.
7. Everyone's connected
In the end, my generation, and those of my predecessors, are living in a geopolitical era. We believe that everyone is fighting for resources. So there are nations and countries. Enterprises are also fighting for scarce resources. But now, after the new third industrial revolution, we will change from scarcity to prosperity, and realize such a transformation: from a rich generation to a better life; from a society with disordered functions to a society with ecological civilization. So, we will see a new generation of interconnected, emerging in our world.
From the bottom of the sea to the sky, all the ecosystems are interconnected to maintain life. All students, they need to have this kind of deep thinking mode, like breathing the air in the atmosphere. We need to connect with families, communities, and larger communities, and we need to build relationships with them. There are high school students in Beijing, high school students in New York and high school students in Tokyo. They came home and said to their parents, why can't we drive two cars? We can all share cars, so we don't watch a TV. Isn't that a waste of resources?
We want the children to come home and say, where do these things come from? Is hamburger from the rainforest? People in the tropics need to cut down all the trees and destroy our ecosystem to raise cattle. Children will say: no! We can't raise cattle for hamburgers, we can't destroy the soil, we can't destroy the trees. In this way, our forest will be extinct. Trees absorb carbon dioxide. Without trees, they cannot. The temperature will rise and the children will not have enough to eat. Drought and flood are caused by Hamburg. The generation of the Internet will consider that everything we do every day will affect other people, other animals and individuals in other biosphere.
All of us are interconnected. If other people don't have a good time, we'll lose too. This new way is that we live in an atmosphere, and our freedom is not independent. Now we will have a new business model, because business is generated by stories. Once there is a story, we will build a business model and complete our story. That's not to say it's just to design an app. We need to do all the innovation and create new stories. We all live in an atmosphere, and all of us are part of this big family.
We are facing a crisis, an unprecedented one. We are the youngest species, and we are now facing climate change, which will drive change in your generation and future generations. Where is the horror of climate change? This change will change the water cycle. Some people say that when it rains and there is snow, there is no warming at all. This is not right! This is a planet of water. For millions of years, the ecosystem is maintained by clouds, which are over the earth. Every time the temperature rises, it's because of climate change.
From the second industrial revolution, due to the transportation of various nuclear energy and internal combustion engines, climate change was promoted. Once the climate rises, the atmosphere will be disturbed and they will absorb 7% less carbon dioxide. We are constantly infiltrating, all over the world. Water activities are also being disrupted. Last year, it snowed eight feet in Boston. There were floods in many places and droughts in summer. There was a fire in California this morning. Just this morning, Pakistan was dry. Typhoons and hurricanes happen every year. Our ecosystem can't keep up with the changes in the water system.
The weather tells us that we are now in a cycle of extinction. Every major extinction takes 10 million years to recover. We are now in the sixth round of extinction.
Science tells us that we need to change all kinds of lives. You may have to face this change when you are still a child. We don't know how serious it is. We are sleeping. To you, in the third industrial revolution era of "Internet plus", 99.5% of the species will be extinct. If each of us has mobile technology and our business model, we can improve efficiency, reduce marginal costs and improve productivity. If we use this technology to monitor data, analyze technology and write our algorithm, then we can monitor our value chain and improve our efficiency. This means that we can use less resources and not waste it.
Zero marginal cost is a model, an important model to reduce carbon footprint, which can improve productivity. We want to share cars, families, clothes and toys. All things can be shared. This is the sharing economy.
True creativity is about thinking about freedom, about our planet, about rights. Think about these three points in different ways, and you will create innovation and a sharing economy. In this way, we can learn to live together and share our life on earth. If we only think about making money, there will be no revolution. We will create new stories and new businesses. We need to live together and save our species. At the same time, in the new society, we will lead a better life and realize ecological civilization.
