Does the combination of emerging disruptive scenarios create a new economic paradigm? In The Zero Marginal Cost Society, Jeremy Rifkin describes a world where nearly free goods and services are enabled by the Internet of Things to drive a new paradigm that eclipses capitalism – the Collaborative Commons. It seems the exponential curve of technology is pushing the operating logic of Capitalism – which focuses on driving ever increasing levels of productivity – towards an extreme level of productivity. Its success could therefore be its undoing. I am a firm believer that this emerging period will ultimately be viewed as the most transformative of all time – but I must admit – I did not make this leap. While reading, I found myself focused on business model questions facing every industry – and through that lens, the story resonated with me. It prompted me to revise the anchor visual that I have used throughout this look at disruptive scenarios. I posed this simple question: does combinatorial innovation create a third curve?
As the building blocks on the first curve converge to spawn the disruptive scenarios on the second curve, do the two curves converge to create a third, new economic paradigm curve? I’ve also added two new disruptive scenarios that were inspired by the book: The Energy Internet and the Logistics Internet. I’ll explore each of these in detail in coming posts. Essentially, Mr. Rifkin sees the Internet of Things being comprised of three separate Internets: The communications Internet (the mature Internet that we know and love today), The Energy Internet, and the Logistics Internet. These three Internets combine to create a Third Industrial Revolution platform that drives the movement to a new economic paradigm. The core of the argument centers on the energy and communication matrices of the past, and their role in shifting the economic paradigm of the day.
The author explores how the print revolution combined with water and wind power (renewable energy) to transform the existing feudal economy to a market economy. Steam printing and the steam locomotive provided the general purpose technology platform for the first industrial revolution, transforming the nature of commerce. The vertically integrated command and control companies of our day were born through necessity – the high cost of establishing rail infrastructure required this type of business model. So railroad companies in effect were the first Capitalist business corporations. Oil, electricity, the internal combustion engine, and the telephone made up the technology platform for the second industrial revolution. The vertical integration required to support this technology platform furthered the notion that our modern day corporation was the most efficient way to manage the complexities of the environment. The significant societal changes driven by these technology platforms are explored in detail throughout the book. The author expects the third industrial revolution platform to have considerable societal impact – and we are seeing many signs of that today.
Signs that the times are changing are all around us. Command and control models are increasingly ineffective, and horizontal ecosystem thinking is slowly replacing vertical value chain thinking. The near zero cost phenomenon significantly impacted the publishing, communications and entertainment industries, and now 3D Printing and renewable energy are driving the same dynamic across multiple industries. Monetization strategies, protecting core revenues, creating new revenue streams, and transforming on the fly, are issues affecting multiple industries and companies. The fact that there is very little precedent for much of what we are seeing begs the question: are we heading towards a new economic paradigm? The author is fairly convinced that we are, and prescribes a replacement paradigm called the collaborative commons. He makes a very strong argument to support his position, and I strongly recommend the book. Time will tell. But one thing is increasingly clear: the growing number of disruptive scenarios that are likely to expand well into the future – guarantees a future that looks very different than it does today. Whether it’s capitalism or a collaborative commons, the game is changing. I’ll explore this topic in more depth in future posts.