Mega Trend: The Third Industrial Revolution in India

Industry’s Voice for Policy Change


About FICCI
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Its history is closely interwoven with India's struggle for independence and its
subsequent emergence as one of the most rapidly growing economies globally. FICCI
plays a leading role in policy debates that are at the forefront of social, economic and
political change. Through its 400 professionals, FICCI is active in 53 sectors of the

MEGA TRENDS OF THE EMERGING THIRD
INDUSTRIAL REVOLUTION IN INDIA

economy. FICCI's stand on policy issues is sought out by think tanks, governments and
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prescriptions. FICCI has joint business councils with 75 countries around the world.
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including SMEs and MNCs, and an indirect membership of over 3,00,000 companies
from regional chambers of commerce.
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A Collaborative Report by the Initiative of FICCI Young Leaders (FYL)
and the Office of Jeremy Rifkin in Washington DC

FICCI Young Leaders Team
Disclaimer
The information and opinions contained in this white paper have been arrived at on the basis of inputs provided by members of the
FICCI Young Leaders and other thought leaders on the concept propounded by Mr Jeremy Rifkin. These are futuristic in nature and
based on individual opinions.
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connection herewith.

Shobha Mishra Ghosh
Director
FICCI

Sharad Chandra Sharma
Research Associate
FICCI


MEGA TRENDS OF THE EMERGING THIRD
INDUSTRIAL REVOLUTION IN INDIA
A Collaborative Report by the Initiative of FICCI Young Leaders (FYL)
and the Office of Jeremy Rifkin in Washington DC

Mr. Rifkin's editorial contributions to the "Mega Trends of the Emerging Third Industrial Revolution in India"
have been adapted, in part, from his new book "The Third Industrial Revolution, How Lateral Power
is Transforming Energy, the Economy, and the World," published by Palgrave-Macmillan.

Acknowledgement
It gives us immense pleasure to release the white paper "FICCI Mega Trends 2020" at the
conference "Mega Trends 2020: Shaping India's Future" on January 17, 2012.
We sincerely acknowledge the direction and guidance provided by Mr Jeremy Rifkin in
undertaking this initiative.
This report bears the efforts of our eminent thought leaders who have penned the
individual trends- Prof. P. B. Sharma, Vice-Chancellor of Delhi Technological University,
Prof. Shailendra Raj Mehta, Visiting Professor, IIM, Ahmadabad and Academic Director of
Duke Corporate Education, Mr Prasanto Kumar Roy, President and Chief Editor, Cyber
Media Publications, Mr Nitin Khanna, CEO, Aantrishti Human Development Solutions Pvt.
Ltd., Mr Yashwant Deshmukh, Founder-Owner, YRD Media, Dr. Rajiv Kumar, Secretary
General, FICCI and Mr Sanjay Dawar, MD, Management Consulting, Accenture India.
We also thank Mr Vivek Mohan, MD, Abbott India Ltd., Mr Deep Kalra, Founder & CEO,
Makemytrip.com and Mr Pawan Agarwal, Advisor, Higher Education, Planning
Commission, Government of India, Mr T. P. Chopra, President & CEO, Bharat Light & Power,
for assisting in the preparation of the report and Mr Tarun Arora, CEO, GIST.
We sincerely acknowledge the excellent leadership provided by Mr Shivinder Mohan
Singh, MD, Fortis Healthcare Ltd., (Chairman) and Ms Sulajja Firodia Motwani, MD, Kinetic
Motor Co. Ltd (Co-chair) of FICCI Young Leaders in driving the entire effort.
Last but not the least, we would also like to profusely thank Mr Soumya Kanti Ghosh,
Economics & Research and several other FICCI colleagues for their key inputs in developing
the White Paper.

FICCI Young Leaders Team

Contents
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 01
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 03
1. Mega Trend I - The Third Industrial Revolution. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2. Mega Trend II - New Business Models in the . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Age of Distributed Capitalism
3. Mega Trend III - Intelligent Technologies and Future of Work . . . . . . . . . . . . . . . . 89
4. Mega Trend IV - Collaborative Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
5. Mega Trend V - The Ascendance of Civil Society . . . . . . . . . . . . . . . . . . . . . . . . . 169
6. Mega Trend VI - Continental Markets and Continental Political Unions . . . . . . . 199

Foreword
Federation of Indian Chambers of Commerce and Industry (FICCI) set up the FICCI Young
Leaders (FYL) in 2010, with the mandate to support the FICCI transformation process towards
making it more dynamic and youth oriented; while retaining its strong value systems. FICCI
believes that today’s youth are tomorrow’s leaders and hence it is of utmost importance that
the young demography of India is reflected effectively in the FICCI membership and in all policy
deliberation platforms of FICCI. With this thought in mind, we set out to create a core group of
young entrepreneurs (first, second & third generation) and professional leaders across various
sectors to strategies activities that would attract young Indian business leaders to FICCI.
One of the ideas that attracted FYL members was the concept of Mega Trends and their global
as well as local impact. With India poised to take a leap forward, FYL members felt, it was critical
to analyse the mega trends, assess the recent changes and its impact on India’s socio-economic
fabric in the next decade and suggest the way forward for the transition. After numerous
deliberations internally, it was decided that we would identify a global futurologist who could
guide us to take this initiative forward. We found the concept of Third Industrial Revolution (TIR)
propounded by Jeremy Rifkin, Founder President of Foundation of Economic Trends, USA highly
interesting and intriguing, a concept that has been notified by the European Union and is being
implemented in some of its member states.
To our delight, Jeremy agreed to work with us on this project and together, we identified the top
six trends which have been elaborated in the White Paper that in our view would impact India's
growth story in the next decades. Then began the arduous task of identifying Indian thought
leaders who could work with Jeremy and FICCI Young leaders to develop the White paper on
each trend. Fortunately, the Indian thought leaders we identified found the concept equally
interesting and meaningful and agreed to contribute to this initiative.
We have witnessed the effect of disruptive change in the past when the first and second
industrial revolutions led to the eclipse of India as an economic force and the rise of Europe.
With its vibrant democracy and strong institutions, modern India is in a much better position to
usher in change in the era of third industrial revolution, provided we prepare for the future with
timely actions. FICCI as one of the leading policy change agent in India plans to facilitate the
government and the industry to adapt to the change seamlessly.
The “Mega Trends 2020: Shaping India’s Future” seeks to provide a platform for dissemination
of the thought process of FICCI and deliberations on the way forward. We hope that the event
shapes up as a meeting point of thought leaders and policy makers to prepare India for the
future.
We are indeed extremely thankful to Mr Jeremy Rifkin, the FYL Core Members, the Indian
Thought Leaders of each Mega Trend and the FICCI Team for contributing towards this initiative.

Shivinder Mohan Singh

Sulajja Firodia Motwani

Chairman
FICCI Young Leaders

Co-Chair
FICCI Young Leaders
01

Executive Summary
The world is witnessing changes in almost every sphere of human activity owing to rapid
technological advancement, globalization, unmanageable financial crisis, unemployment
and climate change. It is becoming increasingly clear that we need to both rethink the
nature of the human journey, and create a new economic narrative that can take us into a
more equitable and sustainable future. India with its billion plus population has to deal with
the evolving scenario for a secure and brighter future for its coming generations. The
demographic dividend of India has been well documented and deliberated. However, the
concern today is that if this demographic dividend is not channelized appropriately given
the manpower displacement by intelligent technologies, it could well turn out to be a
demographic disaster. This particularly needs a serious consideration, as India will add
another 241 mn people in working age population between 2010-2030.
It is with these thoughts amongst others, the FICCI Young Leaders (FYLs) came up with the
idea of studying the global Mega Trends that would be impacting the growth of the Indian
economy. The FYLs were fascinated by the concept of Third Industrial Revolution (TIR) by
Jeremy Rifkin. Together they identified 5 other trends emerging out of the TIR Mega Trend
that will impact India's economic and social development story in the next decade. This
White Paper is an attempt to study the global and Indian scenario under each Mega Trend
to help us derive a way forward subsequently.

MEGA TREND 1
The Third Industrial Revolution
By the 1980's the evidence was mounting that the fossil fuel-driven industrial revolution
was peaking and that human-induced climate change was forcing a planetary crisis of
untold proportions. According to Jeremy Rifkin great economic revolutions in history occur
when new communication technologies converge with new energy systems.
The mid-1990s have ushered in the Internet technology and renewable energies to merge
and create a powerful new infrastructure for a Third Industrial Revolution (TIR) that would
change the world. According to Rifkin, in the coming era, we will see micro power plants in
the form of energy generation in homes/buildings connected through an "energy
Internet," just like we now create and share information online. The democratization of
energy will bring with it a fundamental reordering of human relationships, impacting the
very way we conduct business, govern society, educate our children, and engage in civic life.
For 20 years, government and industry were justifiably skeptical about the ability of soft
renewable energies to provide the power needed to manage a complex, global economy.
03

Mega Trends of the Emerging
Third Industrial Revolution in India

However, in 2007, the European Union endorsed the Third Industrial Revolution and now is
being implemented by the various agencies within the European Union as well as in the
member states.
According to Rifkin the establishment of a Third Industrial Revolution infrastructure across
India will lay the basis for a sustainable economy in the 21st century if we lay down the five
pillars of Third Industrial Revolution. These are (1) shift to renewable energy; (2)
transforming the building stock of every continent into micro-power plants to collect
renewable energies on-site; (3) deploying hydrogen and other storage technologies in
every building and throughout the infrastructure to store intermittent energies; (4) using
Information technology to transform the electricity grid of every continent into an energysharing internet that acts just like the Internet and (5) transitioning the transport fleet to
electric plug-in and fuel cell vehicles that can buy and sell electricity on a smart,
continental, interactive power grid.
Access to knowledge has flattened the world; major opportunities are available to anyone
who can utilize the benefit of this knowledge revolution irrespective of where they are
located. Entrepreneurs across the world can become global providers of off-shored
services, and manufactured products at a competitive price. This has resulted in a
phenomenal rise in purchasing power in rapidly developing economies including India.
The new economy will usher in a new era of knowledge based collaborative education,
industry relevant research and product innovation to power the growth of new age
enterprises fuelled by the convergence of abundant energy and the power of
communication technologies. These factors would empower the masses, and enable
capabilities to provide work opportunities and quality of life with human dignity to billions
of people around the globe.
The White Paper written by P B Sharma makes a strong case for a paradigm shift in our
strategic approach to harnessing energy and also for the preparation of the new age
enterprises.

MEGA TREND 2
New Business Models in the Age of Distributed Capitalism
According to Rifkin, the new era will bring with it a reorganization of power relationships
across every level of society. The Third Industrial Revolution is organized nodally, scales
laterally, and favors distributed and collaborative business practices that work most
effectively in networks. The "democratization of energy" has profound implications as we
enter into the era of "Distributed Capitalism."
Distributed capitalism ushers in new business models which greatly reduces capital, energy
and labor costs, and increases productivity. When thousands of businesses - large
companies, SMES, and cooperatives - connect with one another on shared networks, the
04

distributed power often exceeds the power of standalone giant companies that
characterized the First and Second Industrial Revolutions.
In India, the revolution in Information and Communication Technologies has not only made
communication cheap through near universal access to cell phones, but has also
dramatically changed the ecosystem to make possible a variety of new business models.
Companies are now innovating not just for the rich but also for the poor. The idea of
"Fortune at the Bottom of the Pyramid" (late C K Prahlad),"Gandhian innovation", "frugal
engineering" and the Indian "jugaad" are already at work.
The paper on this trend by Shailendra Mehta looks at several innovative new products and
services along with their associated business models in the context of India. They have
been chosen to illustrate a range of distributed information and energy technologies. In all
of these cases there is the notion of a "lead market" that is market with unique
characteristics that is receptive to a particular kind of innovation. For example, cramped
living spaces mean that Japan is receptive to miniaturization. Having a strong Green
movement means that Germany is very receptive to clean energy. Similarly, India is very
receptive to products that are targeted to frugal consumers.

MEGATREND 3
Intelligent Technologies and the Future of Work
While millions of new jobs will be created in the build-out of the five pillar Third Industrial
Revolution infrastructure over the course of the next four decades, millions of jobs in other
industries will be lost to intelligent technology displacement. This is already beginning to
happen.
In industry after industry, from factory production to banking services, companies have
experienced dramatic increases in productivity, which allows them to produce more output
with few workers. Nowhere is the disconnect between productivity gains and job losses
greater than in manufacturing. In the single period between 1995 and 2002, more than 31
mn manufacturing jobs disappeared in the 20 largest economies, while productivity rose by
4.3% and global industrial production increased by 30%. Manufacturing jobs declined by
16%, in the same period, in the other major economies and by more than 11% in the U.S. By
2010, manufacturing workers in the U.S. were producing 38% more per hour than in 2000.
While manufacturing output has remained fairly stable over the decade, employment has
declined by more than 32% because it takes fewer workers to produce the same output. If
the current trend continues - and its only likely to accelerate with even more smart
technologies - it is estimated that global manufacturing employment will decrease from
163 mn workers to just a few mn workers by 2040, eliminating most factory jobs around the
world.

05


Intelligent technology is taking over a multitude of jobs once performed by human beings
across sectors from retails, hospitals, hotels, railways, government etc. Rifkin projects that
by 2050, a mature, intelligent Third Industrial Revolution infrastructure will be in place,
essentially eliminating mass labor as a dominant workforce in the market economy. The
second half of the 21st Century will be characterized by boutique, high-tech, professional
workforces programming and monitoring intelligent technology systems. All of which begs
the question of how to keep hundreds of millions of people employed as we move further
into the century.
In India too intelligent technologies are making major, disruptive changes to industries and
sectors, and to our lives.
l
ICT-enabled

services moved thousands of jobs out of the West into India. As
technology further progresses, some of those occupations, such as customer support,
and even software coding, are being increasingly automated. This could mean a million
jobs will disappear in their present form.

l is explosive growth in data entry jobs, created by projects such as Aadhar (UID),
There

drawing more people into this sector. At the same time, the progress in automated
forms capture technologies and web-based self-capture (such as income-tax e-filing)
could create a tipping point after which approximately half of those recently-created
jobs vanish.
This White Paper by Prasanto Kumar Roy attempts to identify such occupations that will be
disrupted, and draw up recommendations for training and re-skilling present and future
workers so that they can leverage those newer areas, and are not skill-mismatched when
those opportunities arise. The danger is that if this is not done, then the displaced labor
force itself could be a socio-economic impediment to further growth, with the population's
buying power reduced, affecting the consumption of goods and services.
Similarly, there are other areas such as agriculture and healthcare where jobs will not be
displaced, but where intelligent technologies coupled with high demand and growth in the
sector will create millions of new jobs, demanding newer technical competence. The paper
seeks to identify what those are, to prepare future workforces to leverage them.

MEGA TREND 4
Collaborative Education
Preparing the workforce and citizenry for the new society will require rethinking the
traditional educational model, with its emphasis on rigid instruction, memorization of
facts, reductionist thinking and autonomous learning. In the new globally connected Third
Industrial Revolution era, the primary mission of education is to prepare students to think
and act as part of a shared biosphere. A new generation of educators is beginning to
06

deconstruct the classroom learning processes that accompanied the First and Second
Industrial Revolutions and is reconstituting the educational experience along lines
designed to encourage an extended ecological self, imbued with biosphere consciousness.
Interdisciplinary learning, multicultural studies, empathic scientific experimentation, and a
systems approach to integrating knowledge, are among the cutting-edge teaching
practices that are forcing a fundamental change in the educational process and preparing
students to live in a complex, multidimensional, global society. The new distributed and
collaborative approach to learning mirrors the way a younger generation learns and shares
information, ideas, and experiences on the Internet in "open source" learning spaces and
social media sites. Distributed and collaborative learning also prepares the workforce of
the 21st Century for a Third Industrial Revolution economy that operates on the same set of
principles.
In India, the education system is bit of a flux in the recent times. Policy makers and
educationists in India have been debating over the policy reforms for decades. This paper
by Nitin Khanna tries to propose a model framework for Aligned & Collaborative Education
which, at once, helps to take a comprehensive view of education as a system rather than
focusing on its components in isolation.
The model looks at the following three aspects which are central to any education system:
A. The vision of education: here we explore the need for a clearly articulated, shared and
aligned vision as fundamental to aligning disparate efforts and energies.
B. The influencing factors in education: stakeholders and the forces they exert both from
the demand and supply side.
C. Component vectors of education. These vectors collectively define the fabric of the
education system itself. Here we have looked at following component vectorsVector 1- Transformational dimensions: These are the fundamental dimensions along
which education needs to produce desired and relevant resultsVector 2- Elements of Education: Five elements have been taken in the model - content and
curriculums, pedagogy, evaluation and certification, delivery models, and finance models.
Vector 3- Levels of Education : The three levels used in the model are early childhood
education, school education and higher education.
Fundamentally, the purpose of education is to prepare the generations for tomorrow,
today. In that spirit, the model framework allows us to anticipate, even envision the future
and then clarify the pathways to reach there. If education is to move towards achieving the
ideals of expansion, equity and excellence, this framework will set the directions and
provide the momentum.

07


MEGA TREND 5
The Ascendance of Civil Society
The Third Industrial Revolution rolls together the last stage of the great Industrial saga and
the first stage of the emerging Collaborative Era. The civil society will play an increasingly
important bridge, as an incubator of critical social capital and as a progenitor of thousands
of new social enterprises and millions of new jobs, as the evolving Third Industrial
Revolution metamorphosize into the collaborative age over the next half century.
The civil society, where human beings create social capital, is made up of a wide range of
interests - religious and cultural organizations, education, research, healthcare, social
services, sports, environmental groups, recreational activity and a host of advocacy
organizations, whose purpose is to create social bonds. While the civil society is often
relegated to the back tier of social life and regarded as marginally important in comparison
to the economy and government, it is the primary arena in which civilization unfolds. As the
Third Industrial Revolution is deeply collaborative in nature, it requires a trusting and
transparent relationship between people. Creating social capital in the civil society,
therefore, will be critical to the success of the coming economic era.
Nonprofits employ nearly 56 mn full-time equivalent workers or an average of 5.6 percent
of the economically active populations in 42 counties surveyed. In the US and in many EU
member states, the nonprofit sector already accounts for more than 10% of total
employment. The Civil Society is likely to become as significant a source of employment as
the market sector by mid-century, for the simple reason that creating social capital relies on
human interactivity, whereas creating market capital increasingly relies on intelligent
technology. Growing employment in the civil society will provide an increasing percentage
of the consumer income in an ever more integrated and automated global economy.
In India today we see the role of the government shrinking while moving towards the role of
facilitator, with limited arenas for state action. The spaces being vacated by the state are
being occupied by the market and large private corporations (often operating without
boundaries as transnational corporations). The private sector is growing in size and clout
and has much more direct impact on the lives of people than before, even in poor states.
Ideas of free market and trade, which are being promoted by agencies like the WTO, are
deeply impacting, influencing and altering governance and economy in all countries,
including India.
What exactly then is the mandate of civil society? For one, in democratic states, civil society
is expected to keep watch on violations of democratic norms by the state, through citizen
activism, the making and circulation of informed public opinion, a free media, and a
multiplicity of social associations. Only a vibrant and watchful civil society can prevent the
political elite from lapsing on its commitments and responsibilities. The recent ascendance
of the civil is a "crescendo" with the possibility of recurrence in the future, in which the civil
society formations will only gather momentum. India's civil society has always been
08

intrinsic to its political and economic development. Indeed, it can be said that most
changes in polity and economy have not necessarily been initiated by political parties but
by civil society groups.
However, the task of civil society does not end here. As in developed countries, the civil
society can become a significant contributor to the economy as it develops capacities to
employ more people and compliment the private and government sector in employment
generation. With social capital and relationships rather than an institutional mechanism
guiding the businesses of future, civil society would undoubtedly be a significant share of
the country's GDP in years to come.
This White Paper by Yashwant Deshmukh attempts to take us through the evolution of civil
society in India, analyse successful case studies and help us understand the future
implications of the re-emergence of civil society.

MEGA TREND 6
Continental Markets and Continental Political Unions
While the First and Second Industrial Revolutions were accompanied by national
economies and nation-state governance, The Third Industrial Revolution, because it is
distributed and collaborative by nature, scales laterally along contiguous landmasses, and
favors continental economies and continental governing unions. Continentalization is
becoming the new path to globalization.
Sharing renewable energy laterally, in power, communications and transport networks that
stretch across continents, like we now share information virtually in networks across the
internet, is going to radically transform the political world. The new energy relationships
will require governing jurisdictions that are similarly lateral and networked and that
encompasses the outer limits of the TIR's geographical reach, which are the edges of
continents. If not inevitable, it is at least highly likely that continental unions will become
the new governing jurisdictions to regulate emerging continental markets around the
world in the 21st Century.
The European Union is the first continental economy and political union to begin
transitioning into a Third Industrial Revolution. In North America, The North American Free
Trade Agreement (NAFTA) is a precursor to a continental union. Although localities,
regions, and national governments will not disappear in the coming century - they will
actually be strengthened - continental unions provide an expansive political framework for
overseeing integrated continental markets.
Today the prospects for regional progress in Asia are bright and India is ideally positioned to
help facilitate the establishment of a single integrated Asian continental market and
accompanying political union. In particular, the creation of an Asian energy internet will
09


allow hundreds of millions of people to produce their own green electricity and share
surpluses with one another across the Asian continent. In this context, the Indian business
community has an enormous opportunity to help shape the future of the Asian market, by
spearheading the continental transition to a post-carbon Third Industrial Revolution
economy.
This apart, the groundwork for a green future has already started. India has immense
potential in terms of renewable energy and a quick glance at the five pillars of Third
Industrial Revolution reveals that India and Asia can pull the trigger which might carry us to
a sustainable post-carbon era.
We believe that the shift in global power from the Atlantic to the Pacific has started in right
earnest with emerging and developing economies projected to have a 50% share of World
GDP (on a purchasing power parity basis) by 2012 (vis-à-vis 37.5% for G7 countries). This
White paper by Rajiv Kumar illustrates, how the Third Industrial Revolution will make
possible this shift and create a new distributed social vision in the 21st century for Asia and
how India with its abundant natural resources, burgeoning middle class and a huge rural
market is well poised to take advantage of such a change.

10

Mega Trend 1
The Third Industrial
Revolution in India

The Third Industrial
Revolution in India
Jeremy Rifkin

Global Scenario

Our industrial civilization is at a crossroads. Oil and the other fossil fuel energies that make
up the industrial way of life are sunsetting, and the technologies made from and propelled
by these energies are antiquated. The entire industrial infrastructure built off of fossil fuels
is aging and in disrepair. The result is that unemployment is rising to dangerous levels all
over the world. Governments, businesses and consumers are awash in debt and living
standards are plummeting everywhere. A record one billion human beings - nearly one
seventh of the human race-face hunger and starvation.
Worse, climate change from fossil fuel-based industrial activity looms on the horizon. Our
scientists warn that we face a potentially cataclysmic change in the temperature and
chemistry of the planet, which threatens to destabilize ecosystems around the world.
Scientists worry that we may be on the brink of a mass extinction of plant and animal life by
the end of the century, imperiling our own species' ability to survive. It is becoming
increasingly clear that we need a new economic narrative that can take us into a more
equitable and sustainable future.

A New Economic Vision
By the 1980's the evidence was mounting that the fossil fuel-driven industrial revolution
was peaking and that human-induced climate change was forcing a planetary crisis of
untold proportions. For the past 30 years I have been searching for a new paradigm that
could usher in a post-carbon era. In my explorations, I came to realize that the great
economic revolutions in history occur when new communication technologies converge
with new energy systems. New energy regimes make possible the creation of more
interdependent economic activity and expanded commercial exchange as well as facilitate
more dense and inclusive social relationships. The accompanying communication
revolutions become the means to organize and manage the new temporal and spatial
dynamics that arise from new energy systems.
In the 19th century, steam-powered print technology became the communication medium
to manage the coal-fired rail infrastructure and the incipient national markets of the First
Industrial Revolution. In the 20th century, electronic communications-the telephone and

13


later, radio and television-became the communication media to manage and market the
oil-powered auto age and the mass consumer culture of the Second Industrial Revolution.
In the mid-1990s, it dawned on me that a new convergence of communication and energy
was in the offing. Internet technology and renewable energies were about to merge to
create a powerful new infrastructure for a Third Industrial Revolution (TIR) that would
change the world. In the coming era, hundreds of millions of people will produce their own
green energy in their homes, offices, and factories and share it with each other in an
"energy Internet," just like we now create and share information online. The
democratization of energy will bring with it a fundamental reordering of human
relationships, impacting the very way we conduct business, govern society, educate our
children, and engage in civic life.
For 20 years, government and industry were justifiably skeptical about the ability of soft
renewable energies to provide the power needed to manage a complex, global economy.
The invention of second generation grid IT has changed the economic equation, tipping the
balance of power from the old, centralized fossil fuel energies to the new distributed
renewable energies. We now have advanced software that allows companies and
industries to connect hundreds of thousands and even millions of small desktop
computers. When connected, the lateral power exceeds, by a magnitude, the computing
power of the world's largest centralized, super computers.
Similarly, grid IT is now being used to transform the electricity power grid in a growing
number of countries. When millions of buildings collect renewable energies on site, store
surplus energy in the form of hydrogen, and share electricity with millions of others across
an energy internet, the resulting lateral power eclipses that which could be generated by
coal, oil, gas-fired, and nuclear power plants.
In 2006, I began working with the leadership of the European Parliament in drafting a Third
Industrial Revolution economic development plan. Then, in May 2007, the European
Parliament issued a formal written declaration endorsing the Third Industrial Revolution as
the long-term economic vision and road map for the European Union. The Third Industrial
Revolution is now being implemented by the various agencies within the European
Commission as well as in the member states.

The 5 Pillar Infrastructure of
The Third Industrial Revolution
The establishment of a Third Industrial Revolution infrastructure across India will lay the
basis for a sustainable economy in the 21st century. However, let me add a cautionary
note. Like every other communication and energy infrastructure in history, the various
pillars of a Third Industrial Revolution must be laid down simultaneously or the foundation
14

will not hold. That's because each pillar can only function in relationship to the others. The
five pillars of the Third Industrial Revolution are (1) shifting to renewable energy; (2)
transforming the building stock of every continent into micro-power plants to collect
renewable energies on-site; (3) deploying hydrogen and other storage technologies in
every building and throughout the infrastructure to store intermittent energies; (4) using
Information technology to transform the electricity grid of every continent into an energysharing internet that acts just like the Internet (when millions of buildings are generating a
small amount of energy locally, on-site, they can sell surplus back to the grid and share
electricity with their continental neighbors); and (5) transitioning the transport fleet to
electric plug-in and fuel cell vehicles that can buy and sell electricity on a smart,
continental, interactive power grid.
The critical need to integrate and harmonize these five pillars at every level and stage of
development became clear to the European Union in the fall of 2010. A leaked European
Commission document warned that the European Union would need to spend €1 trillion
(US$ 1.27 trillion) between 2010 and 2020 on updating its electricity grid to accommodate
an influx of renewable energy. The internal document noted that "Europe is still lacking the
infrastructure to enable renewables to develop and compete on an equal footing with
traditional sources." The European Union is expected to draw one-third of its electricity
from green sources by 2020. This means that the power grid must be digitized and made
intelligent to handle the intermittent renewable energies being fed to the grid from tens of
thousands of local producers of energy.
Of course, it will also be essential to quickly develop and deploy hydrogen and other
storage technologies across the European Union's infrastructure when the amount of
intermittent renewable energy exceeds 15 percent of the electricity generation, or much of
that electricity will be lost. Similarly, it is important to incentivize the construction and real
estate sectors with low interest green loans and mortgages to encourage the conversion of
millions of buildings in the European Union to mini power plants that can harness
renewable energies on-site and send surpluses back to the smart grid. And unless these
other considerations are met, the European Union won't be able to provide enough green
electricity to power electric plug-in and hydrogen fuel cell vehicles being readied for the
market. If any of the five pillars fall behind the rest in their development, the others will be
stymied and the infrastructure itself will be compromised.
The creation of a renewable energy regime, loaded by buildings, partially stored in the form
of hydrogen, distributed via an energy internet, and connected to plug-in, zero-emission
transport, opens the door to a Third Industrial Revolution in India. The entire system is
interactive, integrated, and seamless. When these five pillars come together, they make up
an indivisible technological platform-an emergent system whose properties and functions
are qualitatively different from the sum of its parts. In other words, the synergies between
the pillars create a new economic paradigm that can transform India and the world.

15


Lateral Power and the Remaking of Society
The Third Industrial Revolution is the last of the great Industrial Revolutions and will lay the
foundational infrastructure for an emerging collaborative age. The forty year build-out of
the TIR infrastructure will create hundreds of thousands of new businesses and hundreds
of millions of new jobs. Its completion will signal the end of a two-hundred-year
commercial saga characterized by industrious thinking, entrepreneurial markets, and mass
labor workforces and the beginning of a new era marked by collaborative behavior, social
networks and boutique professional and technical workforces. In the coming half century,
the conventional, centralized business operations of the First and Second Industrial
Revolutions will increasingly be subsumed by the distributed business practices of the
Third Industrial Revolution; and the traditional, hierarchical organization of economic and
political power will give way to lateral power organized nodally across society.
The very notion of lateral power seems so contradictory to how we have experienced
power relations through much of history. Power, after all, has traditionally been organized
pyramidically from top to bottom. Today, however, the collaborative power unleashed by
the coming together of Internet technology and renewable energies, fundamentally
restructures human relationships, from top to bottom to side to side, with profound
implications for the future of society.
The music companies didn't understand distributed power until millions of young people
began sharing music online, and corporate revenues tumbled in less than a decade.
Encyclopedia Britannica did not appreciate the distributed and collaborative power that
made Wikipedia the leading reference source in the world. Nor did the newspapers take
seriously the distributed power of the blogosphere; now many publications are either
going out of business or transferring much of their activities online. The implications of
people sharing distributed energy in an open commons are even more far-reaching.
To appreciate how disruptive the Third Industrial Revolution is to the existing way we
organize economic life, consider the profound changes that have taken place in just the
past twenty years with the introduction of the Internet revolution. The democratization of
information and communication has altered the very nature of global commerce and social
relations as significantly as the print revolution in the early modern era. Now, imagine the
impact that the democratization of energy across all of society is likely to have when
managed by Internet technology.

Living in Biosphere Nodes
The Third Industrial Revolution alters our conception of living space. The First Industrial
Revolution favored dense vertical citi es that rose upwards into the sky. The Second
Industrial Revolution, by contrast, favored more decentralized suburban developments
that stretched outward, in a linear fashion, to the horizon.
16

The build-out of a massive urban and suburban infrastructure has come with a heavy
environmental cost. Our buildings are devouring vast amounts of fossil-fuel energy and
spewing massive volumes of carbon dioxide into the atmosphere. In the US alone,
approximately 50% of total energy is consumed by buildings, which constitutes 50% of all
US Greenhouse Gases. If we are to avert catastrophic climate change and the collapse of
the world's ecosystems, we will need to radically transform the way we live.
The Third Industrial Revolution brings with it a new vision of human habitat. In the 21st
Century, urban areas and the surrounding agricultural regions are re-envisioned as local
"biosphere nodes."
The biosphere is the ecological zone that extends roughly forty miles from the ocean floor
to the stratosphere, within which the Earth's geochemical processes interact with
biological systems to maintain just the right conditions for the perpetuation of life on Earth.
The complex feedback loops of the Earth's biosphere operate like an internal central
nervous system, assuring the well-being of the system as a whole.
Our growing awareness that the Earth's biosphere functions like an indivisible organism
requires us to rethink our assumptions about the meaning of human habitats. If every
human life, the species as a whole and all other life forms are entwined with one another
and with the geochemistry of the planet, in a rich and complex symbiotic relationship, then
we are all dependent on and responsible for the health of the whole organism. Carrying out
that responsibility means living out our individual lives in our neighborhoods and
communities in empathic ways, to promote the general well-being of the larger biosphere.
In a sustainable green world, every region is transformed into a highly-integrated social,
economic and political space embedded in a shared biosphere community. The goal is to
transform each region into a "relatively" self-sufficient and sustainable ecosystem that can
provide much of the basic energy, food and fiber to maintain the population.
In the 21st Century, thousands of regional biospheres will be interconnected in a seamless
energy, communication, and transport grid that crosses continents, allowing each
biosphere node to share surpluses and make up for deficits by engaging in commerce with
other regions in the matrix.

From Geopolitics to Biosphere Politics
The Third Industrial Revolution era will slowly transform international relations from
geopolitics to biosphere politics. A new approach to political life on the planet is just
beginning to emerge, based on operating principles and assumptions that are more
compatible with the dynamics of a Third Industrial Revolution economic model, and the
ecological constraints imposed by the Earth's biosphere.
17


In the geopolitical world of the fossil fuel-based First and Second Industrial Revolutions, the
Earth was conceived in a mechanical and utilitarian fashion. The planet was viewed as a
storehouse full of useful resources ready to be appropriated for economic ends. Nation
states were formed to compete with one another in the market and on the battlefield, to
seize, secure, and control elite fossil fuel energies and rare earth resources.
The shift in energy regimes from elite fossil fuels to distributed renewable energies will
redefine the very idea of international relations more along the lines of ecological thinking.
Because the renewable energies of the Third Industrial Revolution are ample, found
everywhere, and easily shared, but require collective stewardship of the earth's
ecosystems, there is a greater likelihood of global cooperation. In the new era, survival is
less about competition than cooperation, and less about the search for autonomy than the
quest for embeddedness. If the earth functions more like a living organism made up of layer
upon layer of interdependent ecological relationships, then our very survival depends on
mutually safeguarding the well-being of the global ecosystems of which we are all a part.
The old geopolitics was accompanied by a scientific paradigm that viewed nature as
objects; the new biosphere science, by contrast, views nature as relationships. The old
science is characterized by detachment, expropriation, dissection, and reduction; the new
science is characterized by engagement, replenishment, integration, and holism. The old
science is committed to making nature productive; the new science is committed to making
nature sustainable. The old science seeks power over nature; the new science seeks
partnership with nature. The old science puts a premium on autonomy from nature; the
new science, on re-participation with nature.
The new biosphere science takes us from a colonial vision of nature as an enemy to pillage
and enslave, to a new vision of nature as a community to nurture. The right to exploit,
harness, and own nature in the form of property is tempered by the obligation to steward
nature and treat it with dignity and respect. The utility value of nature is slowly giving way
to the intrinsic value of nature. This is the deep meaning of sustainable development, and
the very essence of biosphere politics.
Biosphere politics facilitates a tectonic shift in the political landscape; we begin to enlarge
our vision and think as global citizens in a shared biosphere. Global human rights networks,
global health networks, global disaster relief networks, global germ plasm storage, global
food banks, global information networks, global environmental networks, and global
species protection networks, are a powerful sign of the historic shift from conventional
geopolitics to fledgling biosphere politics.

The Dream of Quality of Life
The Third Industrial Revolution changes our sense of relationship to and responsibility for
our fellow human beings. We come to see our common lot. Sharing the renewable energies
18

of the earth in collaborative commons that span entire continents can't help but create a
new sense of species identity. This dawning awareness of interconnectivity and biosphere
embeddedness is already giving birth to a new dream of "quality of life," especially among
the youth of the world.
The American dream, long held as the gold standard for aspiring people everywhere, is
squarely in the Enlightenment tradition, with its emphasis on the pursuit of material selfinterest, autonomy and independence. Quality of life, however, speaks to a new vision of
the future - one based on collaborative interest, connectivity and interdependence. We
come to realize that true freedom is not found in being unbeholden to others and an island
to oneself but, rather, in deep participation with others. If freedom is the optimization of
one's life, it is measured in the richness and diversity of one's experiences and the strength
of one's social bonds. A life less lived is an impoverished existence.
The dream of quality of life can only be experienced collectively. It is impossible to enjoy a
quality of life in isolation by excluding others. Achieving a quality of life requires active
participation by everyone in the life of the community and a deep sense of responsibility by
every member to ensure that no one is left behind.
While Enlightenment economists were convinced that happiness and "the good life" was
tautological with the accumulation of personal wealth, a younger generation, at the cusp of
the Third Industrial Revolution, is just as likely to believe that, while economic comfort is
essential, it is not sufficient to ensure a full life, and that one's happiness is equally
proportional to the accumulation of social capital.
The change in thinking about the meaning of happiness is beginning to affect one of the key
indices for measuring economic prosperity. The Gross Domestic product (GDP) was created
in the 1930s to measure the value of the sum total of economic goods and services
generated over a single year. The problem with the index is that it counts negative as well as
positive economic activity. If a country invests large sums of money in armaments, builds
prisons, expands police security and has to clean up polluted environments and the like, it's
included in the GDP.
In recent years, economists have begun to create alternative indexes for measuring
economic prosperity based on quality of life indicators, rather than mere gross economic
output. These new indices measure the general improvement in the well-being of society
and include such things as: infant mortality and longevity of life, the availability of health
coverage, the level of educational attainment, average weekly earnings, the eradication of
poverty and income equality, affordability of housing, the cleanliness of the environment,
biodiversity, the decrease in crime, the amount of leisure time, etc. The governments of
France, the UK, the European Union, and the OECD are creating formal quality of life
indexes with the expectation of relying increasingly on these new measurements to judge
the overall performance of the economy.

19


If quality of life requires a shared sense of our collective responsibility for the larger
community in which we dwell, the question becomes "Where does that community end?"
In the new era, our spatial and temporal orientation gravitates beyond political boundaries
to encompass the larger community we all inhabit - the biosphere itself.

The Leapfrog Effect
The Third Industrial Revolution build-out is particularly relevant for the poorer countries in
the developing world. We need to keep in mind that 40% of the human race stills lives on
two dollars a day or less, in dire poverty, and the vast majority have no electricity. In India,
over 400 million people are without electricity-more than one third of the population.
Without access to electricity they remain "powerless," literally and figuratively. The single
most important factor in raising hundreds of millions of people out of poverty in India is
having reliable and affordable green electricity. All other economic development is
impossible in its absence. Universal access to electricity is the indispensible starting point
for improving the lives of the poorest populations of the world.
Because renewable energy-solar, wind, geothermal, hydro and biomass- is widely
distributed, a Third Industrial Revolution is ideally suited to take off in the developing
world. Although a lack of infrastructure is often viewed as an impediment to development,
what we are finding is that because many developing nations are not saddled with an aging
electrical grid, they can potentially "leapfrog" into a Third Industrial Revolution. In other
words, by building a new, distributed electricity system from scratch, rather than
continuing to patch up an old and outworn grid, India and other emerging nations can
significantly reduce the time and expense in transitioning into a new energy era.
Moreover, because of the distributed nature of the Third Industrial Revolution
infrastructure, risk can be more widely diffused, with localities and regions pooling
resources to establish local grid networks, and then connecting with other nodes across
regions. This is lateral power in practice.
But in order to facilitate this transition it will be necessary to provide a favorable playing
field, and that means financial aid, technology transfer, and training programs to assist
emerging countries. What's going on in developing nations heralds a historic
transformation as households jump from the pre-electricity era directly into the TIR age.
This process represents the democratization of energy in the world's poorest communities.
The Third Industrial Revolution offers the hope that India can arrive at a sustainable postcarbon era by mid-century. We have the science, the technology, and the game plan to
make it happen. Now it is a question of whether India will recognize the economic
possibilities that lie ahead and muster the will to get there in time.

20

Gandhian Economics and The Third Industrial Revolution
Gandhi was a keen observer of the power relations that governed the First and Second
Industrial Revolutions. He watched the British industrial juggernaut swarm over the Indian
subcontinent, devouring its rich natural resources, and impoverishing it's citizenry to fuel
the economic engine and feed the consumer appetites of a wealthy elite and a growing
middle class in Britain. Gandhi's economic views were conditioned by his experience, and
those of millions of his countrymen who languished at the very bottom of a global
industrial pyramid that wielded power from the top down. It is no wonder he railed against
a capitalist system that organized its economic activity in a centralized manner designed to
enrich the few while allowing the leftover morsels to filter down to the masses-of which the
poor in the British colonies were at the very bottom of the industrial pyramid. Gandhi was
equally disenchanted with the Communist experiment in the Soviet Union, which gave lip
service to the principle of communal solidarity while exercising an even more rigid
centralized control over the industrialization process than its capitalist foes.
Although Gandhi never consciously articulated the concept that communication / energy
matrixes determine the way economic power is organized and distributed in every
civilization, he intuited that the industrial organization of society- be it under the aegis of a
capitalist or communist regime-brought with it a set of guiding assumptions including: a
fetish to accumulate wealth in the form of capital in order to centralize control over the
production and distribution process; the championing of a utilitarian concept of human
nature; and the pursuit of ever more material consumption as an end to itself.
Gandhi countered the prevailing commercial paradigm with an economic philosophy that
emphasized decentralized economic production in self sufficient local communities; the
pursuit of craft labor over industrial machine labor; and the envisioning of economic life as
a moral and spiritual quest rather than a strictly materialist drive. For Gandhi, the antidote
for rampant economic exploitation and greed is a selfless commitment to community.
Gandhi's ideal economy starts in the local village and extends outward to the world. He
wrote "An ideal village is that of complete republic independence of its neighbor for its own
vital wants, and yet dependant for many others in which dependence is necessity." He
eschewed the notion of a pyramidically organized society in favor of what he called
"oceanic circles," made up of communities of individuals embedded within broader
communities that ripple out to envelop the whole of humanity. Gandhi argued that,
"Independence begins at the bottom… A society must be built in which every village has to
be self-sustained and capable of managing its own affairs… This does not exclude
dependence on and willing help from neighbors or from the world. It will be a free and
voluntary play of mutual forces… In this structure composed of innumerable villages, there
will be ever widening, never ascending circles. Growth will not be a pyramid with the apex
sustained by the bottom. But it will be an oceanic circle whose center will be the individual.
21


Therefore the outermost circumference will not wield power to crush the inner circle but
will give strength to all within and derive its own strength from it."
Gandhi distanced himself from classical economic theory. Adam Smith's assertion that it is
in the nature of each individual to pursue his or her own self interest in the marketplace and
that "It is his own advantage, indeed, and not that of society, which he has in view," was an
anathema to Gandhi. He believed that true "political economy at its crudest is a theory of
charity and any theory that upon last analysis has not the result of increasing the happiness
of mankind does not belong to the science at all."
For Gandhi, happiness lies not in the amassing of individual wealth, but in living a
compassionate and empathic life. He went so far as to suggest that "real happiness and
contentment… consists not in the multiplication but in the deliberate and voluntary
reduction of wants," so that one might be free to live a more committed life in fellowship
with others. He bound his theory of happiness to one's responsibility to the planet. Nearly a
half century before sustainability came into vogue, Gandhi declared that "the earth
provides enough to satisfy every man's need but not enough for any man's greed."
Gandhi's ideal economy bares a striking likeness to the attributes of an emerging Third
Industrial Revolution. His view of self sufficient village communities joining together and
rippling outward into wider oceanic circles that extend to all of humanity, mirrors the
community nodes that connect in ever more distributed and collaborative networks that
make up The Third Industrial Revolution economic paradigm. His concept of happiness as
the optimization of one's relationships in shared communities rather than the autonomous
pursuit of individual self interest in the marketplace, reflects the new dream of "quality of
life" that is the hallmark of The Third Industrial Revolution era.
Finally, Gandhi's belief that nature is a finite resource imbued with intrinsic value that
requires stewardship rather than pillage, fits the new realization that every human being's
life is ultimately judged by the impact of his or her ecological footprint on the biosphere in
which we all dwell.
While Gandhi espoused the idea of lateral economic power and understood that the
earth's environment is itself the primordial community which supports all of life on the
planet, he was forced to defend his philosophy of local economic power in an industrial era
whose communication / energy matrix favored centralized top down management of
commercial practices and the vertical scaling of economic activity. That left him in the
untenable position of championing traditional crafts in local subsistence cultures that had
kept the masses of Indian people mired in poverty and isolation over eons of history.
Today, the fledgling Third Industrial Revolution communication / energy matrix and
accompanying technologies and infrastructure provides a means to advance the Gandhian
economic vision, while lifting hundreds of millions of Indian people out of abject poverty
and into a sustainable quality of life. Gandhi's vision of the good economy, brought forward
22

and embedded in a technologically advanced Third Industrial Revolution infrastructure,
can serve as a powerful new narrative not only for India, but for emerging nations around
the world in search of a just and sustainable future.

Jeremy Rifkin is the best-selling author of The Third Industrial Revolution, How Lateral
Power is Transforming Energy, the Economy, and the World (Palgrave-Macmillan). He is
also the author of eighteen other best selling books including The Empathic Civilization, The
European Dream, The Age of Access, The Hydrogen Economy¸ The Biotech Century, and The
End of Work. His books have been translated into more than 35 languages. Rifkin is an
advisor to the European Union and heads of state around the world. He is a senior lecturer
at the Wharton School's Executive Education Program at the University of Pennsylvania and
the President of the Foundation on Economic Trends in Washington, DC.

23


The Indian Story
P. B. Sharma
The world of Science and Technology is witnessing an unprecedented knowledge
revolution, propelled by the rapid pace of innovations sweeping across all human activity
and driven by the power of mind, power of connectivity and power of networking. One of
the striking advantages made possible by the internet is that today the vast body of
knowledge is available to millions of people across the globe.
Access to knowledge is open to all; and the opportunities created by this access are vast.
Anyone can take advantage of the Knowledge Revolution. This has created opportunities
for people around the world who can utilize the knowledge base and develop or transform
it into new capabilities and enterprises. Wealth generation was earlier restricted to the
advanced nations of the world who took advantage of their superior capabilities in the
fields of science and technology which started the industrial revolution. Access to
knowledge has flattened the world; major opportunities are available to anyone who can
utilize the benefit of this knowledge revolution irrespective of whether they are in a
developed country, a developing country of even an undeveloped country.
What is required is enthusiastic people who are able to learn and adopt new technologies,
access the vast body of knowledge and employ their creative genius to transform
knowledge into new products, new services, and new businesses which they can market
around the world. The rise of entrepreneurship in China, in the countries of South-East Asia
and India is largely because of the knowledge revolution which has created immense
opportunities. Entrepreneurs in these countries can become global providers of off-shored
services, and manufactured products at a competitive price. This has resulted in a
phenomenal rise in purchasing power in rapidly developing economies including India.
The advent of IT and the penetration of internet and communication technologies into
almost all activities of human endeavour have made it possible to create new businesses
and new work activity resulting in the absorption of millions into the productive sectors of
the economy. As a result of technological breakthroughs which enabled low-energy digital
devices to power the IT revolution, the world has become a global village characterized by
enhanced mobility.
Mobility and Communication, the two major wheels of power on which modern society
moves toward progress and development, are the prime movers for the growth of industry
and enterprises. They facilitate the transaction of business at almost the speed of thought
and create the necessary industry environment for meeting the challenge of a rapidly
shrinking technology and innovation cycle.
24

I. Impact of Information / Communication
Technology (ICT):
The ability of man to innovate and create new designs, new materials, new
manufacturing systems and to collaborate at all levels from design to manufacturing,
sales and service in order to create a dynamic eco-system that supports the growth of
new and innovative products and services is the result of the communication and IT
Revolution. The advances in information and communication technologies have
created new businesses and new knowledge enterprises. In fact, it has supported the
growth of almost all sectors of the economy - education, health care, agriculture,
manufacturing, the services sector, knowledge services, governance and
management, finance, banking and insurance, social networking. Above all, it has
involved people of all ages in the creation of knowledge and its effective
dissemination.
The barriers of time, space and geographical locations have been broken. There is no
consideration in this new knowledge age of one's age and experience. A start-up can
challenge a well established enterprise; similarly a new entrant to the profession can
challenge a well established professional. All it requires is the genius of creativity and
innovation which today is the most important resource on earth.
The integration of ICT with knowledge technologies, knowledge systems, knowledge
warehouses, and internet capabilities, unleash unprecedented growth and the
advancement of productive enterprises providing work opportunities to millions of
people around the world.
Norman R. Augustine, in envisioning the next century, has rightly opined that the new
century will hold the future never thought of yet. And this is happening today with
more to come. Virtual offices, virtual teams, time sharing, factory networks, Business
Process Reengineering Practices in nearly all spheres can be cited as classic examples
of ideas that did not exist fifteen years ago.
But then, let us not lose sight of the fact that it is not just ICT alone that will create the
Third Industrial Revolution tide as history suggests that the great economic
transformations occur when new communication technology converges with new
energy systems. New forms of communication become the medium for organizing
and managing more complex civilizations made possible by the new sources of
energy. The infrastructure that emerges shrinks time and space, connecting people
and markets in more diverse economic relations. When those systems are put in
place, economic activity advances, moving along a classic bell shaped curve that
ascends, peaks, plateaus and descends in tandem with the strength of the multiplier
effect established by the communications / energy dynamic. In addition, the power

25


of innovation today is such that it pushes the product cycle upward as soon as the
current product has passed its peak of acceptability, in turn creating an even higher
peak of acceptability by successive innovations as shown in Figures 1 and 2.

Growth

Innovation

Decline

Maturity

Growth

Introduction

SALES

Innovation

Innovation Restarts the Product Life Cycle

TIME

Figure 1: Innovation Restarts the Product Life Cycle
Ref: http://blog.cestudios.ca/2007/07/23/restart-the-product-life-cycle/

Generalized Product Life Cycles Semiconductor Industry

Sales/Profits

Product
Enhancement

Life Cycle
Extensions

Profit

Introduction Growth

Maturity

Decline

Figure 2: Generalized Product Life Cycles – Semiconductor Industry
Ref:http://strategymarketingplan.blogspot.com/2010_08_01_archive.html
26

Innovation Revolution is the beginning of the innovation led industrial revolution
which is shaping a new canvas of business and enterprise horizons around the globe.
The important point to realize is that today it is possible to have cost effective product
and process innovation because of the ease with which i2IP (Idea to Innovated
Product), could be achieved by the convergence of ICT technologies, provided
systems are put in place to harness the power of innovation and commercialization of
the intellectual property.

II. Energy Revolution on the Anvil:
With the energy crisis of 1974, the need for energy efficiency, energy conservation,
and the search for alternative sources of energy began both in the developed as well
as developing countries. This did not, however, slow down the use of fossil fuels such
as coal, oil and natural gas for generation of electricity and also the use of such fuels
in industrial activity and transportation. The real pressure on the use of fossils was
created by the ever tightening standards on air quality and exhaust emissions. This
challenge of energy efficiency and low engine emission was, however, addressed by
the improved fuel quality, efficient combustion systems and catalytic convertors for
vehicles powered by internal combustion engines. The Primary Energy Consumption
by Fuel in 2010 for the world and for both the advanced and the rapidly developing
countries is given in Table 1. The power sector also witnessed the growth of clean
coal technologies such as super critical and Integrated Gas Coal Technologies,
utilization of natural gas based power plants. Increased use of hydro and nuclear
power would have been an inadequate solution to meet today's needs. Figure 3
indicates the renewable energy share of Global Final Energy Consumption 2009. For
a long time renewables were considered cost ineffective and the least efficient
sources of energy for power generation.

Wind/ solar/ biomass/
geothermal power generation 0.7%

Fossil fuels 81%

l

Biofuels 0.6%
Biomass/solar/geothermal
l
l
hot water/heating 1.5%
l

Renewables 16%

l

16%

Hydropower 3.4
l

l
Traditional biomass 10%

l

Nuclear 2.8%

Figure 3: Renewable Energy Share of Global Final Energy Consumption 2009
Source: BP, Statistical Review of World Energy, June 2011

27


Table 1: Primary Energy Consumption by Fuel, 2010
Country

Oil
Natural Gas
(Million
(MToE)
Tonnes)

Coal
(MToE)

Nuclear Energy
(MToE)

Hydro electricity Renew- ables
(MToE)
(MToE)

Total

US

850.0

621.0

524.6

192.2

58.8

39.1

2285.7

Canada

102.3

84.5

23.4

20.3

82.9

3.3

316.7

France

83.4

42.2

12.1

96.9

14.3

3.4

252.4

147.6

372.7

93.8

38.5

38.1

0.1

690.9

73.7

84.5

31.2

14.1

0.8

4.9

209.1

Russian Federation
United Kingdom
China

428.6

98.1

1713.5

16.7

163.1

12.1

2432.2

India

155.5

55.7

277.6

5.2

25.2

5.0

524.2

Japan

201.6

85.1

123.7

66.2

19.3

5.1

500.9

Malaysia

25.3

32.2

3.4

-

2.1

^

62.9

Singapore

62.2

7.6

-

-

-

-

69.8

South Korea

105.6

38.6

76.0

33.4

0.8

0.5

255.0

Total World

4028.1

2858.1

3555.8

626.2

775.6

158.6

12002.4

Note: ^ Less than 0.05.
Source: BP Statistical Review, June 2011

The use of wind energy is confined largely to coastal areas, and solar energy, despite
its abundance, can be utilized to a limited extent because of the technology barriers
of photo-voltaic cells. However, these barriers are being overcome with major
technology breakthroughs achieved through solar-wind hybrid and with the
increasing feasibility of solar-hydrogen technologies. More recently renewable
sources of energy have made their mark on global energy consumption.
A new energy revolution is on the anvil with renewables making more business sense
and with energy entrepreneurship becoming popular both in households as well as in
the rural sector. Once solar becomes a viable business proposition there will be a
phenomenal increase in harnessing solar energy. Even without it, a major energy
revolution is in the making with the increased focus on grid as well off-grid solar
photovoltaic power in the US, European Union, and also in China, India and countries
in South-East Asia.

III. Convergence of Communication Technology
and Energy Systems:
According to Rifkin, we are on the cusp of another convergence of communication
technology and energy. The new economic paradigm will spawn thousands of new
business opportunities and create millions of new jobs in the coming decades.
In this context, we need to address the current trend of migration of the rural
population to urban areas and the creation of mega cities. This trend adversely

28

affects the agricultural system simultaneously creating population pressures on
mega cities in the form of slums. A new breed of urban poor with extremely poor civic
facilities are already a major concern in India. In the latest report, 25% of the India's
poor live in urban areas, and 31% of the urban population is poor. For the distributed
capitalism, it is critical to reverse the rural to urban migration by stimulating nonagricultural employment/entrepreneurial opportunities in the rural sector.
We foresee energy entrepreneurship with the advent of the Third Industrial
Revolution which will lead to creation of small and medium enterprises penetrating
deep into the rural areas thereby increasing the power of rural India and engaging
rural people productively within the non-agricultural economy. This will also result in
increased investment in agriculture and push agricultural productivity to higher
levels to justify the return of investment. The twin gains will be food security through
increased agricultural productivity and the rural population enjoying a higher quality
of life by being part of agro-industrial activities. The strategic shift which we propose
involves policy shifts to promote small and medium enterprises in rural areas as an
essential condition for the establishment of large industries near urban areas.
We need to envision a future in which millions of individual players can collect,
produce and store locally generated renewable energy in their homes, offices,
factories, and vehicles, and share their power generation with each other across the
world through an intelligent "inter-grid". In such a case, hydrogen emerges as the
most powerful universal storage medium for intermittent renewable energies such
as solar, wind and tidal. Hydrogen will play the role of a major carrier to cause the
energy wave to sweep the globe much as digital technologies have become the most
acceptable medium of storage and transmission of data, information and
knowledge. In this new energy environment the focus should be on sustainable
forms of energy. The focus should be on local communities generating their own
energy as well as on systems which recycle and reuse the waste they create.
We foresee the rise of energy entrepreneurship which will involve millions of people
in the business of harnessing available renewable energies and the businesses
generated through it for production and distribution. Generating energy in a form
which can be utilized locally as well as plugged into the energy grid would become a
major phenomenon in countries around the world. The energy environment today
leans heavily in favour of conventional energy systems promoting centralized energy
generation, transmission and distribution. The new environment will give rise to an
energy mix both, on the basis of the source of energy, as well as a mix of sizeable
decentralized and centralized energy systems. Solar shall play a major role in this new
energy revolution.
Migration into large metropolises were significant in 1991-2001 with the Greater
Mumbai urban area drawing about 2.5 mn migrants, the Delhi urban area about 2.1
mn migrants, the Chennai urban area about 0.4 mn migrants to name the largest
three urban destinations in the country. As the trend in migration to large urban
29


agglomerations continued, the Census 2011 is likely to show a spurt in population in
these places.
Therefore, it is important that the migration of rural poor to create urban slums is
addressed. This can only be possible by providing avenues for productive nonagricultural employment in rural areas. Energy farming, energy entrepreneurship,
growth of nano & small enterprises, penetration of ICT in rural areas and accessibility
to national and global knowledge networks from anywhere, irrespective of rural or
urban, can make this transformation happen. Energy from waste, energy from
biomass, recycling of waste water and using solar energy for water treatment &
purification can be taken up in a big way both in the rural as well as urban areas. We
foresee a significant reduction in migration of the rural population to metropolitan
cities as one of the major benefits arising from the Third Industrial Revolution which
will open up large opportunities for energy entrepreneurship, small and medium
manufacturing, knowledge process outsourcing, business process outsourcing
services and other utilities providing productive employment in the rural sector in
addition to the agriculture sector.
It is important to recognize that the typical small land holdings of Indian farmers is an
impediment to productivity and purchasing power. Hence it is extremely important
to create value added opportunities for the productive engagement of the workforce
in rural areas other than in agriculture to increase their productivity and purchasing
power. The Third Industrial Revolution will help realise the dream of mass
entrepreneurship in rural areas envisioned by the father of the Indian Nation,
Mahatma Gandhi Ji. At that time Gandhi Ji talked of a self-reliant rural India on the
strength of cottage Industries which in the modern context would be nano, small and
medium enterprises arising from the strength of the rural sector in renewable energy
and its utilisation for productive work activity including modern ICT enabled and
knowledge intensive enterprises beyond modernisation and mechanisation of the
agriculture sector. A significant rise of the food processing industry and industries
based on bio-technology is also envisioned to become a reality in the rural sector
especially in that the Third Industrial Revolution promises abundant energy available
to the rural sector.
A Case Study: The Impact of rural energy growth on urban migration in the State of
Gujarat
While states across the country grapple with the problem of getting power to the
rural areas, Gujarat stands tall as an exception. The success story of the 'Jyoti Gram
Yojana' of Gujarat can be cited as an excellent example of the growth of rural electric
power fuelling rural industrial growth, thus reversing the rural migration. The State
Government's 'Jyoti Gram Yojana' (JGY) has not only ensured 100 per cent village
electrification but also 24 X 7 power supply, resurrecting rural industries resulting in
the reverse migration back to rural areas.
30

At an expenditure of over US$ 200 mn, the programme successfully covered the
18,065 inhabited villages and 9,681 hamlet-suburbs in Gujarat. Rather than adopting
the usual practice of providing power supply for agriculture and households from a
common feeder, the scheme sought to provide power from separate feeders. About
12,621 new transformer centres and 56,599 km of new lines were laid. Implemented
in a record time of 30 months, the project involved installation of specially designed
transformers (SDTs) to provide round-the-clock electricity supply for domestic use to
farmers living in farm houses. Compared to big players who struggle to control their
transmission and distribution losses (T&D), the project achieved a tangible reduction
in T&D losses by 4.88 per cent in the financial year 2005-06. The transformer failure
rate was also reduced by 1.17 per cent.
Post-Jyotigram, the socio-economical benefits for the rural population have been farreaching. For example, the time spent on education has increased by 90%, and the
time spent on entertainment is up 88%. Income generated by rural women has
increased by 18%, according to the study by Ashish Amin & Vinay Umarji, Business
S ta n d a rd , A p r i l 2 0 0 8 . ( htt p : / / w w w. b u s i n e s s sta n d a rd . co m / i n d i a
/storypage.php?autono=320640); there has been a 200% increase in the number of
phone booths and a 300% increase in provision stores in these villages. Further, there
has been increase in the number of commercial units like cyber cafes, fax and
photocopying shops. Personal testimonies of the villagers have been revealing as
well. Jagdish Laaniya and his wife Kanchanben of Ratanpar village, a hamlet in
Bhavnagar, lived in the nearby town of Botad, where Jagdish used to work in a
diamond polishing unit. After the 'Jyoti Gram Yojana' reached Ratanpar, the couple
decided to return and set up their own diamond polishing machine and a lathe
machine in the village. Apart from diamond polishers, people across the rural
spectrum have benefitted from the scheme. Many people have returned to the
villages and have set up new units, evidence of reverse migration. Rural industries
like fisheries, dairy farming, flour and rice mills, and apparel stitching have been
resurrected in Gujarat, says the study by Ashish Amin & Vinay Umarji.
Moreover, the shelf life of medicines, dairy products and cold drinks has increased
due to the availability of refrigeration. Uninterrupted power supply led to an average
gain of 3-6 additional hours of work per week. Seeing the successes of the scheme,
the State Government has also been talking about replication of the project in other
states and developing countries.

31


IV. Energy Entrepreneurship for the masses:
The Third Industrial Revolution is envisaged to create an upsurge of rural
entrepreneurship powered by the energy and communication revolution. It is an
established fact that energy entrepreneurship and IT enterprises require manpower
that can be trained more easily than the manpower training required for large
manufacturing enterprises. The IT training revolution in India is a shining example of
the achievements realized by millions of Indians by focusing on computer literacy
and IT training and these form the basis for the phenomenal growth of the ICT sector
in India.
This IT Revolution in India was undoubtedly supported by a highly significant
expansion of technical education in India that allowed the ICT industry to hire the
requisite manpower from within the country and even place the trained manpower
in their outsourced outfits in countries abroad. If such a Revolution was possible for
the ICT sector it may also be possible for the energy sector, a sector on the threshold
of taking off given that the Jawahar Solar Mission has made a significant headway for
solar power development in far flung areas in the country.

Figure 4: Huaxi Village in China constructing world's 15th tallest building
We need to create a massive training program on energy entrepreneurship so that
the trained manpower can become part of energy entrepreneurship for the masses
thus supporting the significant growth of solar and other renewable energy sources
to harness the enormous growth of agro-industrial activity to wipe out both hunger
and poverty. Using such an approach, the under developed and deprived rural areas
32

can be transformed like the Huaxi village in Jiangyin [Jiangsu Province] in China,
which is the richest village (Figure 4) and a composite of modern metropolis and
rural.
We foresee a similar transformation of India's rural areas in the Third industrial
revolution.

V. Moving Towards Zero Waste Engineering:
There is increasing recognition that the future will be an era of sustainable and “self
repairing systems”. As such we need to address several crucial issues to reap the rich
harvest of the convergence of ICT and energy dynamics. The first issue relates to the
recycling of waste material and related environmental hazards. Millions of
computers are used today to drive the ICT revolution. These computers produce
tremendous amounts of silicon waste that is not easy to recycle. E-waste is already a
major concern. A consumerist society, addicted to a “use and discard” culture, yet
demanding affordable new and improved products adds to the waste re-cycling
problem. Oil spills affect biodiversity and pollutes water, which in turn have a
detrimental effect on the environment. Thus, tomorrow's engineering should first
concentrate on remedies for eliminating waste and protecting the environment. The
Third Industrial Revolution will have a greater emphasis on zero waste engineering
and optimum use of energy and physical resources. The emphasis here will be on
environmentally benign clean technologies, green manufacturing, green energy,
green electronics and green management together giving rise to green enterprises
and green products.

VI. Low Carbon Economy – a remarkable footprint of the
Third Industrial Revolution:
One of the major benefits of the Third Industrial Revolution will be its capability to
foster an ultra low carbon economy. This would be possible largely because of the
human capability to reduce the Green House Gases, (GHG) emissions from the
existing power utilities, transportation systems and manufacturing units and from
the continued quest for energy conservation and the search for alternative sources
of energy. While renewable energy including solar-thermal, solar-photovoltaic,
solar-hydrogen, and solar power for agriculture offer significant improvement, the
prospects of human imagination attempting major breakthroughs in new and smart
materials, wireless electricity transmission and attempting mind-to-mind
connectivity, almost along the lines of today's cloud computing, will usher a new era
of agro-industrial activity in rapidly developing economies as well as in the
33


developed nations of the world. However, bold initiatives are required from the
policy makers who should come out with a declaration of both, the intent as well as
action plan to achieve no less than zero dependence on fossil fuels by, say 2030, At a
minimum, the policy makers should commit to achieving at least 50% share of the
primary energy needs of the nation from renewable sources. A sustained focus on
increasing the fleet of battery operated vehicles, hybrid vehicles and vehicles
powered by clean fuel will significantly cut down the carbon foot print and pave the
way for a low carbon economy. Bio-diesel, ethanol, hydrogen, hydro power, wind,
geothermal and solar should be the major sustainable fuels for the low carbon
economy which will be the hallmark of the Third Industrial Revolution.
This requires a well thought energy strategy, given the enormous potential of
renewables. The technology breakthroughs required can be enabled by inspiring and
engaging scientists and technologists to work in an environment of seamless
integration of science and engineering. We need to create “scientism” and enable
our scientists and engineers to work together to develop major technology
breakthroughs needed for the convergence of an energy and communication
revolution. The Third Industrial Revolution needs to focus on effective and efficient
ways to manage waste, energy conservation and zero defect engineering to ensure
maximum productivity from limited resources.
The Third Industrial Revolution holds a better future for the primary, secondary and
tertiary sectors. The transformations which can be foreseen are:
l geo-spatial positioning systems in precision farming to ensure appropriate
Use of

use of inputs for productive results.
l
Advanced

technology in the field of agriculture for reducing the waste of
resources such as water, and for increasing the efficiency of farms.

l
Contract

farming, wherein people buy produce from a farmer of their
acquaintance, who is monitored by intelligent systems to ensure the produce is
pure and organic.

l off-shoring of technology and produce gaining importance, the benefits can
With

be availed by the low cost manufacturing concerns. For example, Chile has
diversified from copper to fruit and fisheries merely because of the Third
Industrial Revolution.
l to
Due

economies of scale, low cost producers like India and China have
benefitted from the developed world's manufacturing sector off-shoring of
facilities. It is indeed true that most of the manufacturing in America is
outsourced to countries like China and Vietnam. The Americans focus on
providing services and marketing. Their economy is service sector driven.

34

l
Readily

available trained manpower has attracted foreign investors into Indian
markets .This provides numerous employment opportunities to Indians, and helps
raise their living standard.

VII.Agriculture: From Green to Evergreen Revolution:
The Third Industrial Revolution will usher in a new wave of evergreen agriculture.
Pioneering work by agricultural scientists in India, and the efforts of farmers, helped
achieve a breakthrough in the agriculture sector in the 1960s, popularly known as the
'Green Revolution'. In the Indian context, high agricultural production and
productivity achieved in subsequent years has been the main reason for attaining
food security. However, the country has not witnessed any big technological
breakthroughs in agriculture since then. A food safety-net for the billion plus citizens,
and growing, requires enhanced agricultural production and increased productivity
in the form of a Second Green Revolution that can be better termed as an “EverGreen” revolution. Further, special attention is required for achieving higher
production and productivity levels in pulses, oilseeds, fruits, and vegetables, that
remained untouched by the First Green Revolution, but are essential for nutritional
security. The relatively weak supply responses to price hikes in agricultural
commodities, especially food articles, in the recent past brings back into focus the
central question of efficient supply chain management and the need for sustained
levels of growth in agriculture and allied sectors. The choice before the nation is
clear: invest more in agriculture and allied sectors with the right strategies, policies,
and interventions. This is also a 'necessary' condition for 'inclusive growth' and for
ensuring that the benefits of growth reach a larger number of people.
The growth of agriculture and allied sectors is still a critical factor in the overall
performance of the Indian economy. As per the 2010-11 advance estimates released
by the Central Statistics Office (CSO) on 07.02.2011, the agriculture and allied sector
accounted for 14.2% of the gross domestic product (GDP), at constant 2004-05
prices. During the period 2004-05 to 2007-08, the GDP for agriculture and allied
sectors had increased from US$ 11308.5 mn to US$ 13101.6 mn at constant 2004-05
prices; thereafter it stagnated at this level for two years (2008-09 to 2009-10). In
2009-10, it accounted for 14.6% of the GDP compared to 15.7% in 2008-09.
The use of information technology in agriculture has reduced waste, increased work
efficiency, delivering increased farm yields. Some examples are mentioned below:
Use of
l

sensors, laser levelers help save water by about 30% and increase
productivity about 20%.

35


Use of
l

Green seeker in agriculture helps identify less than optimal level of a
specific fertilizer and the quantity needed; grain loss monitor helps determine the
amount of grain being lost.

Use of
l Global Positioning Systems in precision farming to ensure appropriate use
of inputs for productive results.
Use of
l

Energy Efficient Farming and Water Conservation technologies in the
agriculture sector shall ensure optimal use of resources.

Use of
l

IT for farmers for optimum marketing of their produce as also for the
consumers to locate their best producers and retailers.

The major focus for the Second Green Revolution in India would be on :
Increasing
v soil fertility and soil conversation.
Water harvesting and conservation of water resources in rural areas.
v
Economical
v

and effective use of water and natural fertilizers for increased
agriculture productivity.

Education
v and training of farmers for increasing productivity and conservation
of resources.
Increased
v

focus on use of natural fertilizers and biotech penetration for
increased yields and human health.

VIII. A New Paradigm for Education is needed:
To usher in the Third Industrial Revolution, it is important to create a new paradigm
for education. The new paradigm should focus on creating capabilities powered by
innovativeness and concern for sustainability rather than merely creating informed
and trained manpower. In this respect, education, innovation and excellence have to
be the tripod of the new education paradigm. A major shift from education-led
knowledge to knowledge-powered education, knowledge-led research and
knowledge-led innovation is required.
We foresee a paradigm shift in education from mere dissemination of knowledge to
an integral approach of knowledge sharing, knowledge management, knowledge
creation and knowledge dissemination, with a focused attention on harnessing the
power of innovation and creativity of the inspired and talented students and
qualified and enlightened faculty. In this changed situation, the panchamrit of
academia, R&D organizations, industry, government & society will become the
hallmark of the educational strategy, especially in the universities and institutions of
36

higher learning. This will call for a renewed attention to Technology Parks,
Technology Incubation and Product Innovation Centres and enabling structures for
fostering student and faculty start-ups in the science and technological universities
and institutions of higher learning. In fact, the universities of tomorrow will be
transformed into global knowledge enterprises with the mantra “Knowledge to
Prosperity” as the hallmark of the university system.
This will then be a win-win situation for the knowledge creators as well as the
industries. The society and the government will be greatly benefitted by such a
sustained focus on creation and dissemination of knowledge and the transformation
of knowledge to prosperity through strong and effective industry-academia
partnerships.
The universities in India and for that reason around the world have to revisit their
vision and their planned activities from the point of view of shaping the universities
of tomorrow into global knowledge enterprises.

Summary
The Third Industrial Revolution will usher in a new era of knowledge led education, industry
relevant research and product innovation to power the growth of new age enterprises
fuelled by the convergence of abundant energy and the power of communication
technologies.
The Power of Mind, the Power of Connectivity and the Power of Networking shall then
create a new global order in which human excellence shall surpass human imagination,
creating productive employment for humanity and thus assuring a quality of life to live with
dignity and honour to justify human existence on Planet Mother Earth.
That is the promise of the New Knowledge Age which will be realized with the convergence
of the New Energy and Information and Communication Revolution. The Third Industrial
Revolution offers a renewed hope for accelerated growth of prosperity with focus on
quality, green productivity, reliability, environmental sustainability and above all, care and
concern for society and human values.
The Third Industrial Revolution thus promises a new industrial age in which prosperity and
happiness together will be the hallmark of industrial activity compared to the unfair
prosperity and unhappiness witnessed during the Second Industrial Revolution.

Prof P. B. Sharma, Vice Chancellor, Delhi Technological University

37


Acknowledgment
The author gratefully acknowledges the inspiration provided by Jeremy Rifkin, the
originator of the concept of the Third Industrial Revolution and the opportunity provided
by Shobha Mishra Ghosh, FICCI for the development of this White Paper. Useful discussions
that Rifkin had with the thought leaders of FICCI, specially with Vivek Mohan of Abbott
India are also gratefully acknowledged. The support received from Meha Joshi and .
Yoginder Kumar of DTU in the preparation of the White Paper is also highly appreciated and
acknowledged.

References
Ÿ
http://blog.cestudios.ca/2007/07/23/restart-the-product-life-cycle/
Ÿ
http://strategymarketingplan.blogspot.com/2010_08_01_archive.html
Ÿ Statistical Review of World Energy, June 2011
BP,
Ÿ
http://www.business-standard.com/india/storypage.php?autono=320640
Ÿ
Central Statistics Office (CSO)

The views expressed in this White Paper are the views of the author and need not necessarily reflect the
views of the organization i.e. Delhi Technological University.

38

Mega Trend 2

New Business Models in the

New Business Models in the
Global Scenario
Jeremy Rifkin
Energy regimes shape the nature of civilizations-how they are organized, how the fruits of
commerce and trade are distributed, how political power is exercised, and how social
relations are conducted. In the twenty-first century, the locus of control over energy
production and distribution is going to tilt from giant fossil fuel-based centralized energy
companies to millions of small producers who will generate their own renewable energies
in their dwellings and trade surpluses on a vast energy internet just like we now create our
own information and share it online. The democratization of energy has profound
implications for how we orchestrate the entirety of human life in the coming century. We
are entering the era of distributed capitalism.
To understand how the new Third Industrial Revolution (TIR) infrastructure is likely to
dramatically change the distribution of economic, political, and social power in the twentyfirst century, it is helpful to step back and examine how the fossil fuel-based First and
Second Industrial Revolutions reordered power relations over the course of the nineteenth
and twentieth centuries.
Fossil fuels-coal, oil, and natural gas-are elite energies for the simple reason that they are
found only in select places. They require a significant military investment to secure their
access and continual geopolitical management to assure their availability. They also require
centralized, top down command and control systems and massive concentrations of capital
to move them from underground to the end users. The ability to concentrate capital- the
essence of modern capitalism-is critical to the effective performance of the system as a
whole. The centralized energy infrastructure, in turn, sets the conditions for the rest of the
economy, encouraging similar business models across every sector.
The emerging Third Industrial Revolution, by contrast, is organized around distributed
renewable energies that are found everywhere and are, for the most part, free-sun, wind,
hydro, geothermal heat, biomass, and ocean waves and tides. These dispersed energies
will be collected at millions of local sites and then bundled and shared with others over an
intelligent energy internet to achieve optimum energy levels and maintain a high41

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