The Inevitable Shift Toward a Quality of Life Economic Model
By: Mark Bickford
A new quality of life economic model is developing thanks to communications, green energy and transportation connected via the platform of the Internet of Things. This glimpse of the completely new economic paradigm that will fully emerge over the next 25 years was offered by Jeremy Rifkin at the inaugural Quality of Life Conference sponsored by Sodexo in New York in May. Rifkin, an economic and social theorist, writer and political advisor, sees the new economic paradigm coupled with extensive sharing of information and goods — like cars — leading to an improved overall quality of life for people and the planet.
With the Internet at the helm, communications, energy, and transport allow constant monitoring. The Internet of Things already has 14 billion sensors monitoring all types of activity, from agriculture fields to factory floors to homes and vehicles. By 2030, Rifkin believes there will be 100 trillion sensors, allowing every device and machine to share data with other machines and with people.
With data from the Internet of Things, anyone can use analytics and applications to increase productivity, reduce marginal costs, and stay competitive in what will be the most productive global economy in the history of the world. As the Internet of Things drives down some marginal costs to near zero, those particular goods and services with low marginal costs are becoming abundant and virtually free, which is resulting in a new economic paradigm: a sharing economy.
Green energy is an important part of this new economy. The marginal costs of harvesting green energy — solar, wind, geothermal, and hydro-biomass — are heading toward zero. The impact is already seen in Germany, where 27% of electricity generated today is through green initiatives, with numbers expected to rise to 35% by 2020 and 100% by 2040. The most significant potential from the efficiencies in this new economy is the chance to address global warming and climate change. Businesses, families, and countries can monitor data in real time to dramatically increase efficiencies, allowing them to use less of the Earth’s resources.
Rifkin used car sharing as the perfect example of how the economy is changing. The up-and-coming transportation model is based on car sharing. GPS technologies and the Internet allow potential riders to connect with a driver who is within minutes of their location and will drive the passenger for a nominal fee. For every car shared today, 15 cars are eliminated from production. Former executive vice president of General Motors, Larry Burns — now a professor at the University of Michigan — did a study and found that 80% of all vehicles could be eliminated, based on the current Internet of Things platform. This amounts to eliminating 800 million vehicles in the next generation, and the greenhouse gas emissions that go with them.
The rollout of a digital economy will engage every industry, creating jobs to build the infrastructure, and will create a more efficient, productive, clean, democratic and sustainable value chain. Converting existing buildings, electricity lines, and even roads to support the new economy will engage two generations in unskilled, skilled, and professional labor. As the automated capitalist market takes over, people will continue to contribute, but the market will move to a social economy. These human-facing jobs — like childcare, assisted living, health, education, environmental remediation, culture, and sports — can only be done by humans — machines won’t suffice.
The impact of digital technology on decreased marginal costs and increased efficiencies is already visible. Every day, millions of “prosumers” produce, consume and share music, videos and blogs via the web at a near zero cost. Six million students around the globe are using digital technologies to take free courses with the best professors at top universities and receive college credit. In the next 25 years, we are going to see even more dramatic changes to our economic model that will benefit the quality of life for people around the globe.
Mark Bickford is President of Corporate Services for Sodexo North America and a strong advocate for the new performance frontier: Quality of Life. Mr. Bickford believes there is a direct link between enhanced Quality of Life and better individual, organization and community performance.
Originally published at sodexoinsights.com.