The European Union is investing in a new venture to create a high-tech 21st Century integrated single market that can unite its 500 million citizens and 28 member states, making Europe potentially the most productive commercial space in the world. The plan, which will be implemented between 2015 and 2020, is called Digital Europe.
The Internet of Things will transform Europe. Digitalisation will go further than providing universal broadband and free Wi-Fi; it will revolutionise every commercial sector, disrupt virtually every industry, bring with it unprecedented new economic opportunities, put millions of people back to work and create a more sustainable low-carbon society to mitigate climate change.
The First Industrial Revolution in the 19th century, which saw steam-powered printing, use of coal as a fossil fuel and locomotives on national rail systems, was followed by the introduction of centralised electricity, the invention of the telephone, radio, and television, the use of cheap oil as a fuel source and internal combustion vehicles on national road systems in the 20th Century, marking the Second Industrial Revolution.
The Third Industrial Revolution
Today, Europe is laying the ground work for the Third Industrial Revolution. Digitalisation is happening, and it’s moving towards the creation of a super-Internet of Things (IoT) infrastructure which will see every device and appliance connected to the internet by sensors, allowing them to communicate with each other and Internet users, providing up to the moment data on the managing, powering, and moving of economic activity in a smart Digital Europe.
Currently, 14 billion sensors are attached to resource flows, warehouses, road systems, factory production lines, the electricity transmission grid, offices, homes, stores, and vehicles, continually monitoring their status and performance and feeding big data back to the Communication Internet, Energy Internet, and Transportation and Logistics Internet.
By 2030, it is estimated there will be more than 100 trillion sensors connecting the human and natural environment in a global distributed intelligent network.
For the first time in history, the entire human race can collaborate directly with one another, democratising economic life.
Already, a digital generation is producing and sharing ebooks, music, films, videos, blogs, online newspapers, social media in an online space, and a spate of new entrepreneurial enterprises such as Google, Facebook, Airbnb, and Uber have formulated the rapidly expanding Sharing Economy which is paving the way for a near zero marginal cost information goods industry. And it’s just the beginning.
The evolving Internet of Things will allow conventional businesses enterprises, as well as millions of prosumers, to make and distribute their own renewable energy, use driverless electric and fuel cell vehicles in automated car sharing services, and manufacture an increasing array of 3D-printed physical products and other goods at very low marginal cost in the market exchange economy, or at near zero marginal cost in the Sharing Economy, just as they now do with information goods.
Virtually every industry will be transformed by the Internet of Things platform and the ushering-in of a Third Industrial Revolution. A dearth of micro-manufacturers are utilising digitisation to dramatically increase their productivity while reducing their marginal costs, enabling them to outcompete the formerly invincible global manufacturing firms, organised around vertically integrated economies of scale. It’s called 3D printing and it is the manufacturing model that accompanies an IoT economy. 3D printing is projected to grow at a blistering compound annual rate of 106% between 2012 and 2018.
There are currently a billion cars, buses, and lorries congesting densely populated urban areas across Europe, and as the third major contributor to global warming gas emissions, new transport ideologies are fast coming into play. It has been predicted that 80% of the vehicles currently on the road are likely to be eliminated with the widespread adoption of car sharing services over the course of the next generation. The remaining 200 million vehicles will be electric and fuel cell transport, powered by near zero marginal cost renewable energy. Those shared vehicles, in turn, will be driverless and running on automated smart road systems.
Using the Internet of Things, the bulk of the energy used to heat homes and run appliances, power businesses, drive vehicles, and operate every part of the global economy will be generated at near zero marginal cost and be nearly free in the coming decades. That’s already the case for several million early adopters in the EU who have transformed their homes and businesses into micro-power plants to harvest renewable energy on-site.
The Internet of Things will enable businesses and prosumers to monitor electricity usage, optimise energy efficiency, and share surplus green electricity generated on-site with others across nations and continents.
Erecting the Internet of Things infrastructure for a digital Third Industrial Revolution economy will create millions of jobs for the European workforce due to the labour requirements involved in such a largescale revolutionary project. Semi-skilled, skilled, professional, and knowledge workers will need to be employed across every region of Europe to construct and service the three Internets that make up the digital platform of a Third Industrial Revolution economy.
It will also require a significant investment of public and private funds. However, this transformation will not occur overnight but rather take place over thirty to forty years.
The transformation to an Internet of Things infrastructure and a Third Industrial Revolution paradigm is forcing a wholesale rethinking of economic theory and practice.
Many of today’s global corporations will successfully manage the transition by adopting the new distributed and collaborative business model of the Third Industrial Revolution while continuing their traditional Second Industrial Revolution business practices, but it is imperative that organisations adapt accordingly.
A smart digital Europe will dramatically increase productivity, create a wealth of new businesses and opportunities, and employ millions of people and thereby simulating purchasing power and economic strength. Technology is the future, and it’s time to embrace it.