The New Industrial Revolution

A revolution is generally defined as “a forcible overthrow of a government or social order, in favor of a new system”.

A revolution, as opposed to an evolution, could not be stopped. People could be against it or participate in it, but it will happen. In order to be able to act (against or for it), it is necessary to understand the forces in action and their causality.

We are leaving a new post-industrial revolution, mainly due to technology advancement, the Internet and the capability of people to be connected to others and also due to the globalization of the economy.

This blog post will describe the current revolution, using three different angles, based on the work of three different people, living in two different side of the Atlantic.

We will start with Michel Serres a French philosopher who provides a vision of this revolution by replacing it in the history of humanity. Then, we will summarize the vision of Jeremy Rifkin, adopting an economic and social vision and two researchers from the MIT Center for Digital Business, Erik Brynjolfsson and Andrew McAfee. Finally, we will draw some key conclusions, to be used as the foundation for the next chapters.

The new post-industrial revolution

The digital revolution, the third industrial revolution, everybody as a name for it. Until recently, it was not identified as a hot topic by most of the people living on earth, mainly because it grew hidden behind the excitement of the growth of the Internet, the connected world, and globalization.

Facebook launched in 2004, Twitter in 2006, the iPhone in June 2007 and WhatsApp in 2009 (which was sold to Facebook in 2014 for 19 billions!). The exponential adoption of phones (smart or dumb) did enhance humans with a new “seventh” sense. Humans now have access in their hands, and nearly instantaneously, to “all the knowledge” of “all the world” (as Michelle Serres says in its book “petite poucette” (1)).

The third revolution is fueled by digital technology. Computing power is now accessible to everybody in the Cloud or at home at a never ending decreasing cost, and digital goods can be exchanged and promoted nearly immediately everywhere in the world at a marginal cost.

This revolution is also, and mainly, a revolution in usages. Humans are now always connected. The Homo Connecticus hunts for data (2), when the Homo Sapiens were hunting for food.

Giving some lectures in French universities, I was amazed to see how quickly students were answering my questions … Of course, I was then quick to realize that most of them used an Internet search engine to find the answer. Some of them were even looking for chunks of code in the required programming language on the Internet to do the coding exercises. So, now before thinking, people are searching.

This is equally true with kids who are now automatically able to use an IPAD, and are learning by looking at YouTube videos, especially when they can’t yet read. And they can create, easily, and immediately getting the results by using an app. There’s an app for any of your needs, you just need to find it.

We can define this new revolution by looking at kids, students, and peoples usage of technology in their day to day life. But, it is also necessary to spend time understanding the why. Why is it a revolution? What is the potential impact on this revolution on our life?

The third Revolution by Michel Serres

Michel Serres (3) is a French philosopher, author, and member of the French Academy. In order to explain the third industrial revolution, he decided to start with a brief history of humanity.

Humanity has gone through several revolutions, all changing the way human beings communicate. All revolutions were based on key intangible facts: everything on earth emits, receives, treats and stores information. The way it is done will vary through the ages, but the core it all is always the signal and the way to exchange it. A computer is a machine that emits, receives, treats and stores information. So, a computer is by definition a universal machine which mimics “everything on earth”. The computer is then the key trigger for the revolution we are experiencing because it impacts three dimensions: time, space and cognition.

Revolution in time

When humans began to walk with their four hands, they used their mouth to sense the world. Then humans did raise and start walking with only two legs. They could then use their hands to “sense” the world and make objects. So, the mouth lost its primitive objective, externalized to the hands, and then, the mouth was used to communicate and talk.

And then came language. At that time, the brain was used to receive, transmit, store, and process signals (basically information understood through the cognitive process of the brain). Humans had everything they know in their mind and transmission was done orally.

Then came writing. The invention of writing changed considerably human society and led to the creation of written laws, money, and commerce (with the use of bill of exchange).

In the 15th century, Gutemberg invented printing. This invention massively impacted the human society, especially on the religious and political side. The capability to print and distribute knowledge in books to all was a major milestone for the advancement of science, enabling scientists to compare and combine work done by others and create new theories. Of course, they still had to go to a library and search for the right book and its location on the shelves. They also needed to look at the location system to find the right section about what they were looking for. But, they had access to the information, without having to learn it by heart. It was also the start of a new era in education.

Beginning with the computer, digital media appeared and increased again their capacity to receive, transmit, store, and process signals. Finally, with the Internet, information was massively shared and immediately accessible (with no need to move physically to a library or use real physical books). The Internet also facilitated new ways of creating and transmitting signals like video, songs, language translations, etc. A good example is Wikipedia, which was created by the crowd and is nearly as accurate as the established encyclopedias that were built only by specialists. Wikipedia was also enhanced to provide a better user experience on tablets (shown in Figure 1, or specialized for a company or a topic).

Figure 1: Das Referenz Ipad App (4)

Revolution in space

Michel Serres claims that the Internet is not shortening distance. In fact, the Internet has destroyed the notion of distance. The Internet has made humans change the space they live in (and the way they live)! Humans are no longer living in a Euclidian space (a metric space, where they can define where they are with x and y coordinates), or the “physical” location (the address of where they live) but in a topological space. In a topological space, every element is defined relatively to others and the distance between two elements is based on the number of links between them. Think Rolodex vs. Linkedin.

The computer, the smartphone and the touchpad to the disappearance of metric space, based on distance. Now anyone can contact anybody else anywhere in the world instantaneously, giving humans the gift of ubiquity.

Changing the space humans live in, meant also that ‘old’ laws and human organizations were not applicable anymore. Humans are living in a new space with no law… yet. That’s why, current discussions around net neutrality, tax payment, copyright infringements, new currencies, etc., are of paramount importance.

Revolution in cognition

Let’s get back to the computer. When talking about the computers capability to store information, we usually talk about “memory”. But this has nothing to do with human memory. And the role of the brain has again changed. Nobody will ever be able to imagine more pictures, more video, more human faces with their brain that they can find stored on the Internet. The computer is now able to reason and process much more information than the human brain can, at a higher speed.

Philosophy previously defined knowledge as the exercise of three faculties: memory, imagination and reason. The computer has now those same faculties. Now every morning, when you sit down at your desk and switch on your computer, it’s your head that you see on the table. The computer is now a way of externalizing the brains cognition capabilities, modifying the “ego cogito” (“I think”) for the first time in history.

Conclusion

Like in any human revolution, humans are losing capabilities, but are evolving and gaining others. Evolutions made them externalize some of their capabilities outside their body, process named exo-Darwinism by Michel Serres.

So what is left to human being if most of its capacities are now externalized? Humans will have no other choice than becoming intelligent, using their brain to innovate, feel, and invent, working with computer and not against.

The Third Revolution by Jeremy Rifkin

Jeremy Rifkin has a different way of describing the digital revolution; the third industrial revolution (5). He, like Michel Serres, believes that we are in the first stage of a paradigm shift that is reshaping not only the economy, but also the society at large, and even how we think and perceive our world.

In his theory, the great economic and social revolutions in history can only occur when two events happen simultaneously:

1. The emergence of a new energy regime that opens the path to a more complex civilization. The new energy flow enabling to bring more people together, to integrate bigger commercial and social units, etc.

2. To emerge successfully, this new paradigm requires a communication revolution powerful enough to manage the new energy regime.

The three industrial revolutions he described are summarized below.

The first Industrial Revolution: driven by coal and steam power in the 19th century.

The first industrial revolution was driven by coal and steam power (the new energies) and print technology (the communication vehicle). Print technology became very cheap when steam power was introduced. Both decreased the cost and increased the speed, efficiency and availability of print material. At the same time public schools in Europe and the USA were established.

The second Industrial Revolution: driven by Electricity, in the 20th century.

The first industrial revolution was driven by electricity and mass communication through broadcasting. The energy being created and centralized within plants before being distributed to others. “Elite energies” (coal, oil, gas, tar sands) were used to produce energy. These elite energies were only found in a few places and required significant military and geopolitical investments, as well as massive finance capital. The communication vehicle being mass communication through broadcasting of a unique signal (radio, television, telephone).

The third Industrial Revolution: driven by Internet and “renewable energy”, in the 21th century.

The third industrial revolution is the one we are in, driven by renewable energy and by vast networks composed of millions of small players (“the grid”) joining together to pool and share their content, risks and resources.

Energy is now infinite (in a sense) being created through distributed renewable energy sources found in every corner of the world: the sun, the wind, the geothermal heat under the ground, biomass (garbage, agricultural and forest waste), ocean tides and waves, etc. The communication vehicle of this revolution being the Internet, at least for the last 20 years, it is based on a distributed and collaborative communication medium.

Conclusion: A lateral revolution

One of the key ideas of Jeremy Rifkin is that disruption comes from lateral power (as opposed to all other revolutions that were based on a top-down communication model). So for example, electricity 2.0 will become a reality: everybody will become a “smart producer”, creating and sharing renewable energy to others through grids (internet like meshed networks). And then, electricity will become free globally! Several countries (China, the USA, Kazakhstan, the UK, Italy, etc.) and regions (like the European Union) did consult him and did apply its theory to draw their future energy and economic plans (6).

Jeremy Rifkin’s third industrial revolution does not really put the emphasis on machines or computer, but more on energy and communication through networks.

The Second Machine Age

The second machine age (7), written by Erik Brynjolfsson (Director of the MIT Center for Digital Business) and Andrew McAfee (Principal Research Scientist at MIT Center for Digital Business, is centered on the impacts of machines. For them, we have entered the second machine age.

The first machine age

The “First Machine Age” was born of the Industrial Revolution, using machines to replace or augment our physical capabilities. Machines were used to replace muscle power and increase productivity.

At that time, machines were very good at calculating and following rules but very bad at “recognizing patterns” and demonstrating other human qualities of intelligence at speed or scale (8).

The second machine age

The Second Machine Age is about using machines to replace or augment our mental capabilities (as Michel Serres explained). Machines are then used to realize cognitive tasks that humans can do. It started roughly when IBM’s Deep Blue computer beats Gary Kasparov in a chess match in 1997.

This revolution is now possible due to three powerful forces (8): Exponentially improving technology, digitization of everything and combinatorial nature of innovation.

The first force is related to exponentially improving technology. This comprises computational power, communications technologies, data storage and even software. Some technologies are even improving faster than Moore’s law (Moore’s law is the observation that, over the history of computing hardware, the number of transistors on integrated circuits doubles approximately every two years).

Figure 2: Moore’s law visualized through the evolution of Lara Croft (by Elena Silenok)

The second force is the digitization of everything and the network effects of a connected world. Digital technologies have unusual economics: they can be copied at virtually zero cost, transmitted almost instantaneously and resultant copies are perfect, identical copies of the original.

The third force is the infinite possible recombination of innovations that can be remixed in creative new ways (and create more value). A larger base of inventions means an even larger set of raw materials for the next wave of innovations, creating a digital virtuous circle. This is very unlike traditional inputs that yield diminishing returns.

Conclusion

The Second Machine Age will have an even greater impact than the first industrial revolution. This is especially true in an increasing number of industries that have software at their core. Machine intelligence (artificial intelligence, big data, people generated knowledge, connected networks, etc.), and robotics will have a huge impact on organizations. As they claimed in (8): “CxOs don’t fully appreciate and understand the power of these new technologies. Many don’t even realize that they are in the midst of this tidal wave of change.”

The second machine age will also impact our society, especially the middle class, possibly destroying millions of jobs. New jobs will also be created, but not at the same pace. As they said, “increased inequality is not an inevitable outcome of technology, but a combination of technology and the state of our current institutions.”

The third industrial revolution: a digital, lateral, and fractal revolution

The digital revolution, is due to a combination of advances in computer capabilities and robotics (“externalizing” human capabilities to a machine) and to the way people are connected and can interact through vast and dynamic “lateral networks”.

The third revolution, a digital one, is here to stay. We are now living in a world that is being re-imaginated, by humans, with the help of software and hardware intelligent machines. The key for the future is about education. Countries and companies will have to invest in people and tools to enable a pacific coexistence between man and machines, between the one programming and the one being programmed.

We will also have to help our children keep one foot in the physical world and one foot in the digital world, even if the digital side of the force is so appealing (if you have kids playing Minecraft (9) you will understand me). We will also have to create new laws and rights, for humans and for robots. Humanity should not accept again any form of slavery for humans or robots!

The following picture, based on well-known movie posters, summarizes the three revolutions, one picture being better than a thousand words.

Figure 3: the three revolutions using movie posters as a metaphor

The tidal wave of changes due to that revolution took all industries by surprise (like music, travel, retail, etc.) and disrupted established companies and business models. The lateral effects of this revolution are multiplied by the way the revolution propagates and repeats itself with and across industry sectors. This revolution is highly fractal since it is based on similar patterns emerging at many levels (zooming in and zooming out in each domain will show the same patterns). This is also why this revolution is so hard to detect. It starts small, and then propagates exponentially using the network effect.

This third industrial revolution, lateral and fractal, is generally called the digital revolution, and is leveraging quick innovation cycles that have reshaped completely the several industries. But this is another story.

References

1. Serres, Michel. Petite Poucette. s.l. : Editions le Pommier, 30 mars 2012.

2. Hello homo-connecticus. How are you? Green, Jonathan. s.l. : Smart Mobility Management Journal, November 8, 2003.

3. Serres, M. http://en.wikipedia.org/wiki/Michel_Serres. Wikipedia. [Online]

4. Referenz, das.

5. Rifkin, J. The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World. USA : Palgrave Macmillan Trade, September 27, 2011.

6. — . Wikipedia — J. Rifkin collaboration with countries. http://en.wikipedia.org/wiki/Jeremy_Rifkin#European_Union. [Online]

7. McAfee, E. Brynjolfsson and A. The Second Machine Age. .Work, progress, and prosperity in a time of brilliant technologies. s.l. : W. W. Norton & Company, 2014.

8. CapGemini Consulting. An interview with Erik Brynjolfsson and Andrew McAfee. 2014.

9. Minecraft. https://minecraft.net/. [Online]

10. Wikipedia. Jeremy Rifkin Consultancies.