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.
Frank I agree that the command and control midel has got to go! And high time too. Who would have thought only a few years ago that technology would become the catalyst?
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Heidi – I feel like we have not seen anything yet…
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[…] 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 ena… […]
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[…] 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 ena… […]
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Great
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[…] 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 ena… […]
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[…] in the next several posts with a look at the work of Jeremy Rifkin and his recent book titled The Zero Marginal Cost Society. In his book, he describes the economic paradigm shifts of the past, and points to three elements […]
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[…] continued look at disruptive scenarios focuses on the Logistics Internet. In his recent book titled The Zero Marginal Cost Society, Jeremy Rifkin describes an Economic Paradigm Shift driven by a Third Industrial Revolution (TIR) […]
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[…] posts focused on the historical – namely Jeremy Rifkin’s view that we are heading towards A New Economic Paradigm. The foundation of Mr. Rifkin’s argument is a Third Industrial Revolution (TIR) platform that […]
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[…] scenarios are provided. The fourth box represents the ultimate disruption – the potential for A New Economic Paradigm brought on by the cumulative effect of disruptive scenarios. With technology as the foundation, […]
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[…] shift from an ownership economy to a sharing or access economy supports the growing notion that A New Economic Paradigm is on the horizon, and counters the argument that this fad will pass with an improving economy. […]
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[…] disruption and my belief that its ramifications are historic – here’s why. In a recent post on A New Economic Paradigm, I reference a recent book written by famous economist Jeremy Rifkin. In the book, Rifkin argues […]
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[…] a feeling that non-digital industries are safe from the power of disruption. In a recent piece on a New Economic Paradigm, this topic is explored in greater depth, questioning the long term viability of not just current […]
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[…] In a recent post, I described a third platform vision positioned by IDC that views a third IT wave built around cloud computing, social applications, big data, and mobile computing. The post goes on to describe an argument made by famous economist Jeremy Rifkin that a third revolution is upon us, and it is fueled by a new general purpose technology platform (GPT). I believe the innovation accelerator part of the curve bridges the gap between these two points of view. Some of these accelerators are in our line of sight and their impacts already felt. Others are emerging with an expected impact, and still others are far off in the distance with no ability to gauge impact. The ultimate impact as viewed by Rifkin may be A New Economic Paradigm. […]
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[…] traditional thinking gives way, the resulting ecosystems have the potential to move towards the collaborative commons described by Jeremy […]
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[…] cost of living close to zero. A similar case was made by Economist Jeremy Rifkin in his book titled The Zero Marginal Cost Society. Diamandis defines demonetization as the ability of technology to take a product or service that […]
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Hey! Would you mind if I share your blog with my myspace group?
There’s a lot of folks that I think would really
enjoy your content. Please let me know. Thanks
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sure
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Hi Frank. I read this again with renewed interest. Made me wonder about the energy sector this time. Curious to know what you think of the obvious resistance to renewable energy and how it might all play out. We need that to shift sooner rather than later and will it shift fast enough?
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Heidi – unfortunately it will be Europe and emerging economies that lead the way. When they effectively shift the energy paradigm – it will force the U.S hand
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[…] progression that likely changes the energy paradigm in the coming decade. In his book titled The Zero Marginal Cost Society, Economist Jeremy Rifkin describes how Internet technology and renewable energies are merging to […]
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[…] traditional thinking gives way, the resulting ecosystems have the potential to move towards the collaborative commons described by Jeremy Rifkin. We are therefore likely to see increased value design activity […]
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[…] reduces the company’s marginal cost. This phenomenon was described at length in Jeremy Rifkin’s The Zero Marginal Cost Society. Increasingly, businesses will maintain a portfolio of business models, with network orchestration […]
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[…] we industrialized would lend support to his way of thinking. Rifkin has discussed his vision for A New Economic Paradigm for some time now; described in his book The Zero Marginal Cost Society. He recently launched a […]
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[…] progression that likely changes the energy paradigm in the coming decade. In his book titled The Zero Marginal Cost Society, Economist Jeremy Rifkin describes how Internet technology and renewable energies are merging to […]
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[…] progression that likely changes the energy paradigm in the coming decade. In his book titled The Zero Marginal Cost Society, Economist Jeremy Rifkin describes how Internet technology and renewable energies are merging to […]
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[…] phenomenon. This same argument was positioned by economist Jeremy Rifkin in his book on a Zero Marginal Cost Society. Rifkin explores the emergence of new energy, communication, and transport paradigms that lead to […]
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[…] progression that likely changes the energy paradigm in the coming decade. In his book titled The Zero Marginal Cost Society, Economist Jeremy Rifkin describes how Internet technology and renewable energies are merging to […]
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[…] physical production and distribution occurring locally. As this happens, the world approaches the Near Zero Marginal Cost Society described by economist Jeremy Rifkin. In this new age, the cost of our basic needs – energy, […]
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[…] argues that revolutions are fueled by general-purpose technology platforms (GPTPs). In his book The Zero Marginal Cost Society, he describes the economic paradigm shifts of the past, and points to three elements that converge […]
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[…] thinking gives way, the resulting ecosystems have the potential to move towards the collaborative commons described by Jeremy […]
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