Organic, renewable…and disruptive: Welcome to the third industrial revolution

By Caroline SCOTT-THOMAS contact

- Last updated on GMT

Harnessing big data will help companies, governments and individuals to identify and eliminate inefficiencies in their value chain, says Rifkin
Harnessing big data will help companies, governments and individuals to identify and eliminate inefficiencies in their value chain, says Rifkin
We are entering a new economic paradigm based on clean energy and organic agriculture, says American economist and social theorist Jeremy Rifkin.

Speaking with FoodNavigator ahead of his presentation at the Vitagora event in Dijon last week, Rifkin explained his theory that the world was at the beginning of a third industrial revolution. He argued that every industrial revolution had seen the merging of three defining technologies: communication technologies, new sources of energy, and new modes of transportation.

The third industrial revolution will come to fruition in the 21st​ century, Rifkin said, marked by digital communications, renewable energy, and automated, driverless transport – which he claims will be possible within a decade.

While the first industrial revolution was powered by steam, with the steam-powered printing press and the steam engine, the second was powered by cheap oil, and coincided with the advent of widespread telecommunications and the combustion engine.

“The second industrial revolution is now slowing,”​ said Rifkin, following the peak in oil prices in July 2008, which has affected fertiliser prices, transport, logistics and energy – all of which form a significant portion of costs for the food industry.

“It’s a paradigm shift. It’s very disruptive to many traditional business models. It’s exciting, substantive, very challenging – but it’s where we are heading.”

Heading to 100% green energy

And this revolution is already in the pipeline. Rifkin is in talks with EU heads of state, including Germany’s Angela Merkel, as well as the Chinese premier Li Keqiang, about how to make the transition to this new economic model.

“Germany is 27% green electricity. They are heading to 100% by 2040. The fixed costs are fast plummeting….It has huge implications for every industry.”

Specifically, consumers and farmers have created electricity cooperatives in Germany, covering their fields and rooftops in solar panels and erecting wind turbines, selling clean energy back to the grid. For big energy companies, it’s not possible to integrate millions of small players, so Rifkin says their business model will have to change if they are to survive.

Even Al Gore won’t talk about agriculture

For companies – food manufacturers among them – the ability to harness big data and use algorithms to eliminate inefficiencies in the supply chain could dramatically reduce their fixed costs and increase profit margins.

And there is the broader question of feeding a growing population in a sustainable way.

Speaking to Vitagora delegates last week, Rifkin said: “Agriculture is responsible for more global warming than transport and nobody wants to talk about it – even Al Gore. So the irony is a lot of the global warming emissions are coming from our food and agricultural industries and it’s going to be the first victim of climate change and if we can’t feed the people how the hell are we going to repopulate populations in the next 10, 20 years, not 50?”

Rifkin said by looking at every stage of the value chain, from the energy used by machinery, to transport, refrigeration and recycling, energy efficiency could improve from the current average of about 13% to about 40%. Currently about 87% of energy in the chain is wasted.

“It means anyone in the food industry can cut their value chain out using analytics and create efficiencies,”​ he said.

Related topics: Market Trends, Sustainability

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