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The imploded (third?) industrial revolution

Sun, Jul 17, 2022 ❝Did or did we not already transition through the third industrial revolution?❞
Contents

TL;DR In The third industrial revolution it is said that the third industrial revolution is still to come. I argue that it has already passed, a roughly 20 year period, and we just lived through it. Furthermore, I find that the triple energy-communications-infrastructure alone is not suitable to recognize all such disruptions, and I explain which events have contributed significantly to this, and the nature of the events in general. The main idea being: “secure communications enabled the internet to develop into an integral part of society and (uniquely) enhances it”.

Foreword

I had originally intended to write the articles in a different order. The idea was to first release a summary of Jeremy Rifkin’s ideas, among which his triple energy-communications-infrastructure, followed by a post on my own proposal. However, as I put all the pieces together and starting to realize this idea of an “imploded” industrial revolution, it seemed easier to write that first. On top of that, it also seemed important to recognize what I believe is an event, a transformation of similar proportions, that has mostly gone unnoticed for its real value and the depth thereof. Maybe exactly because we are living it right now.

In the past few years we have more or less proven a successful transition and I believe this should be recognized as such. Jeremy Rifkin used the triple: energy-communication-infrastructure to identify and classify new technologies. He explains how these three classes together are, in its essence, all necessary to revolutionize the industry. There will be a follow-up post in this series. The series introduction explains the motivation behind these posts.

Introduction

The first and second industrial revolution are well-established: everyone either knows or can easily find out what events are significant. In the VICE-talk, Jeremy Rifkin explains a possible series/chain of events that is unfolding right now. These are events regarding the Internet-of-Things (a.k.a. IoT), artificial intelligence, self-driving cars and trucks, and so on. He refers to these developments as being (part of) the third industrial revolution. I believe there may have been a similarly significant series of events in the recent past, that may have concluded only a few years ago.

At the end of the nineties, coming up to the year 2000, there was this event called the “Dot-com Bubble” (and subsequent bursting). I believe all factors were present, although not all included new technologies. However, not everything would balance out in time and the excitement and euphoria gave way to pessimism which prematurely crippled the event as it unfolded.

Exactly because of this “rocky start” it makes for an interesting case. Certain events of the same time period were already dismissed as not-significant. For example, Jeremy points out that “the internet” is not such a big deal. Instead, consider the telephone, he says. However, in his talks he – probably unintentionally – circles around what I think are the actual significant events that have occurred. I want to discuss exactly that era with the introduction and maturing of the internet, which he skipped in his talks. I will attempt to explain this both in the format of the triple defined by Jeremy Rifkin in his talks, as well as using my own ideas on the subject.

The Dot-com era

The “Dot-com bubble” was a development that started in the mid-to-late nineties with the introduction of the internet. The internet first became accessible to the wider public, with internet service providers (ISPs) offering affordable access by telephone. In the years before, it was mostly universities, other institutions and large companies that got access, if at all. The internet was used mostly for sharing information through static pages, email messages and news messages/usenet groups. However, with access being made available to the larger public, more people started to participate. This is also the time people first started exploring possibilities in the broadest sense. Note though, that participation was mostly out in the open.

Around that time, development had also started around the subject of how to secure a connection between a user browsing the internet and a particular website, for example for commercial purposes or regarding private information. Around this time, the SSL protocol (newer versions of the protocol are nowadays known as TLS) was introduced as a way to communicate securely. This development made it possible for on-line stores, banks and what have you, to communicate securely with visitors they had never seen before, either on-line or in physical appearence.

Asymmetric cryptography makes it possible to communicate securely even if you have not met before and agreed on a (shared) secret code. The internet made it possible to receiver visitors in your on-line store from all over the world, and without prior appointment. And now the SSL-protocol and its introduction of digital certificates made it possible to communicate securely, as-if this visitor was visiting in private. This was the missing technological link that made business on the internet viable. (Before, you would, for example, connect directly to your bank – “phone in” – to issue bank transactions in batches.) And in addition, the ever-growing public audience ensured an ever-increasing target audience.

The Dot-com bubble

In a few years time, the internet transformed from a large network used for communication, interaction and knowledge-sharing, into a “new world” where everyone can start a business, and where there are “unlimited possibilities”, so things went crazy. Anything that looked like a business plan would get funding. The prevalent idea was not to immediately aim to be profitable, but rather to invest big and grow fast, such that you could become a dominant player in what is essentially a global arena. This new world was here to stay, so it would be more beneficial in the long run to gain presence and mind-share. Profit would come later, when your business has grown to millions of customers, rather than thousands. In addition, there would be a first for every kind of business, so the sky was the limit for business possibilities and opportunities.

It is difficult to explain the sentiment of the time. A series of YouTube documentaries both from that time and later times, give a reasonable impression. Interestingly, Patrick Boyle, who recorded the video in January 2021 as a reflection on the time of the Dot-com bubble, also points out – as I do later in this article – that many efforts in collaboration and researching SARS-COV-2 are possible due to developments that started in the Dot-com era.

note these videos are a arbitrary sample of videos/documentaries that seemed to give a reasonable impression of the time and circumstances, and not for the accuracy of the smallest facts. For this post, I am not interested in minute details and/or intraday accurate facts.

Underlying the Dot-com bubble

People were calling it a revolution at the time, and they were right. However, we seem to have repressed what was happening after the bubble burst. Interestingly, the bubble burst but the ideas have remained and have continued to materialize. The transition accompanied with the integration of these new ideas have continued as well. Very little has been stopped in its tracks. The main difference is that developments have gone more silently, in the background, and more gradually such that people have had the time to adapt.

A few changes that happened during the build-up to the Dot-com bubble:

The ideas mentioned above are really just the first things that came to mind. I am sure to have missed many things. In a way, the bubble was period in time where everyone started imagining how the digital world could add to the physical world. Then the bubble burst. That is the moment when it became obvious to everyone that the internet is part of our society and things that happened on the internet impact “the physical world” as well.

After the Dot-com bubble burst

After the bubble burst, the dreams of easy-money-making cooled off. Many companies and start-ups went bankrupt. However, the underlying ideas never were forgotten. After the bubble burst, the “empty world of possibilities” where you can be the first no longer existed. However, it turns out that being first is not everything. Being good also counts. And while, on the internet many services arose each trying to distinguish themselves from the others in some way, the rest of the world had time to catch up.

After the Dot-com bubble:

So, how are things different now? I would say, mainly, that the rest of the world had time to adjust. Promises for, formerly impossibly fast and efficient, service became viable. Technology has improved to the point where it is advanced enough to provide the promised features, such as security guarantees, and the mature enough to function reliably. In the last 20 to 25 years, we have changed from a society where internet is a nice gimmick, to a society where digital communication and information play an irreplacable role in society. Irreplacable, in the sense that, to solve the same problems without the use of digital communication and information handling would require sacrificing many benefits and qualities, or be impossible altogether. Industries and institutes have had time to find out how the internet fits in with their purpose. People have had time to figure out what the internet means for them, and how they can use it.

Not the third industrial revolution?

In multiple talks, he clearly states that the third industrial revolution has yet to happen. He also states that the internet itself is not a new development, in the sense that fits his classification. I think he is right regarding the importance of the internet. However, we also seemed to have missed some things. Let’s consider the following:

  1. The triple energy-communications-infrastructure works as a “matching pattern” when things are in full play, to give an indication of what developments could become disruptive. However, the triple seems to want to match new technologies, and this concerns me as it would severely restrict the number of potential candidates. And it looks to combine three technologies from different classes, meaning that we need to have a good understanding of the technologies individually and match them up in a sensible way. My personal impression here, is that the triple works, and works well for identifying the parts in play for a event (disruption), but identifies candidates in a relatively late stage of development.

  2. I agree with his qualifying the internet itself as not being significant enough. However, as we just discussed, I believe that “security on the internet” is certainly this significant. We seem to have missed this.

  3. I have concerns that the Dot-com era was ignored/dismissed: after the implosion it lost its charm with everyone. The craze subsided and developments stagnated so seemed to have died out. It seemingly does not provide three different technologies immediately, and viable technologies are not new:

    • We may have missed energy as “nothing changed, nothing exciting has happened”.
    • We may have missed communications for “nothing new. The internet is just a progression of multiple phone lines connecting”, with anything happening on the internet as “just using the internet” in various ways.
    • Similarly, infrastructure is hard to identify because it itself was severely lagging in its development as viewed from the perspective of “Dot-com Bubble”-expectations.

    The full period of development is a time-span of approximately 20 - 25 years. This is enough to allow us to get used to new ideas and innovations. Therefore, we need to classify – not based on new/novel – but based on concrete characteristics of progression. This allows us to circumvent our subjective feeling that tells us: “We’ve had this for a long time. it’s obvious. This isn’t new or revolutionary at all!”

As such, to find and qualify potential canditates for the triple energy-communications-infrastructure we need different tactics. One that evaluates individual candidates, and one that is able to handle circumstances that we ourselves would not recognized as new/novel.

The third industrial revolution is not as invasive as the first and second industrial revolution. Like the first and second industrial revolution, these new developments integrate with already existing systems. The third revolution will integrate even with first and second industrial revolution systems, so not everything is replaced all at once, if at all. This means that it may feel less invasive than earlier revolutions, at least in the short run. Changes with least impact/benefit or highest cost, will transition more slowly. Similarly, systems that function – if less than ideal – with first/second revolution systems need not immediately change.

The energy-communication-infrastructure triple

I have mentioned the triple a number of times now. As I understand the way the triple energy-communiation-infrastructure is applied (that is defined by Jeremy Rifkin) is to match each technology-class with a new technological advancement. The idea is that all three classes seem to be present in disruptive developments, such as the industrial revolutions. So, any disruption should have these three components. Because these components play a critical role, to understand what components are contributing is to better understand the disruption and the events leading up to it.

Now, we also mentioned that the triple failed to identify the Dot-com bubble, as (potentially) a revolution. However, if we assume it is a disruption, we should be able to identify the components that are part of this development.

Energy during this time electricity and electricity-based appliances, telephone, television, photocamera etc were all introduced in the every-day household. These technologies are present in society. We had just transitioned into a society that not only has access to electricity, but may also reasonably assume both the various characteristics of performance and reliability. For prime locations, one can pretty much assume 24/7 availability.

Communication this has allowed the early internet to establish into a present, “here-to-stay” communication network already. Around this time more people got access to the internet and everyone is still exploring what it is you can do with it. There are many different uses, but e-commerce is the important application here. Around this time asymmetric cryptography made its entrance, making secure communications possible. This allowed secure communication with the webshop, meaning you can safely buy on the internet.

Infrastructure Transport/logistics around the high-point of the era, there were many ideas for selling almost anything online. Specialized shops for everything from food and toys for pets, to flowers, to anything else (physical) you can think of. However, it becomes clear at this point, that the transport and logistics for transporting the physical goods is not up to the task. The physical parts in a hybrid system cannot adapt fast enough to make this work. Too many start-ups with fantasic ideas fail to deliver (literally and figuratively) on the promise.

The 2000s Dot-com Bubble has all the indicators of a similar “industrial revolution” except that its physical dependencies could not adapt fast enough. This did not stop the revolution itself, just delayed it. Developments ground to a halt, then gradually restarted and development went slow enough that no longer call it a revolution, but it is.

So how are things different now? If we leave out the details such as advancements in security, more fancy web shops, etc. I think that some of the key factors are the following:

In transport/logistics:

In communication:

In energy:

My theory is that the two decades from the moment the bubble burst, were used both for steady progression of developments, mostly integrating the internet, internet services, etc. with their appropriate qualitative improvements, predominantly security, meaningfully into the rest of society. Industries, services and institutes least grounded in computing and networking have needed relatively more adjustment to integrate with these new technologies. This also implies that for digital-natives it has been fairly manageable, steady progression, as these had the head-start. Essentially, there was less tension build-up in the “rubber band of society” while still moving forward towards that goal on the horizon that was there roughly even before the 2000s.

Jeremy Rifkin talks about “the firewall” that once separated the digital world from the rest of the world, that at some point broke down. The bursting of the bubble seems, by far, the most prominent example where things from the digital world start affecting the real world, both the good and bad. Before bursting, there was plenty of influence but concentrated around the events, i.e. around certain industries. After the bubble burst, the necessary correction undoubtedly affected many more. So, this event seems to qualify nicely. The bursting is also, in a way, the beginning of other industries catching up to the (potential) new possibilities offered by the internet.

The “final examination”

The years 2019-2021 have been dominated by the COVID-19 pandemic (SARS-COV-2 virus). The virus most conveniently spreads in close proximity with an infected person. Therefore, for society to cope with this pandemic, it is key to reduce the spreading of infection to the point that hospitals can cope with the stream of incoming patients. The most obvious and most effective solution, is to reduce physical contact and physical closeness.

In many ways, this has been a test of a revolution centered around information systems (in large part) supporting and/or taking over from physical processes. Given two decades of gradual changes to our logistics and transportation – originally envisioned in the Dot-com Bubble in the 2000s – allowed for many on-line services to information-supported services to substitute for physical interaction: from ordering necessities like food, to providing vital information on the virus and how to prevent infection, to periodic news and reports on the status of infection, to scientists cooperating over the internet to analyze the virus and come up with vaccines and counter-measures.

The way our society was able to handle a pandemic that forced us to massively reduce physical proximity is a testament to our ability to adopt and incorporate the internet, and information handling in general, in our society. The internet, but in particular security, has played a significant role in this. Without the ability to establish a trustworthy, reliable connection with other parties we would never have been able to create the infrastructure. Security plays a key component in establishing reliability and trustworthiness.

Collaboration

We cannot teleport organic matter yet, like they do in Star Trek. But in some ways we are advancing in that direction already. In the global effort to find a solution to the COVID-19 pandemic, many parties from many nations and professions collaborated. The virus was digitized in multiple forms, as multiple models, and using DNA sequencing. The virus has traveled the world digitally, as well as in physical form. Without the ability to communicate securely, entailing the full breadth of security: integrity, availability and confidentiality, technology would not have advanced enough and/or gathered enough trust and support to make all this possible.

Of course, we are not talking about technology in the last 3 years. We need to consider technological development over the last 20 years. The gradual build-up, maturing of network and communication protocols, reliable software, both gradual and ridiculously rapid developments of off-line and on-line tooling, the standardization of formats for interchange and interoperability of servers, industry/institutes, and the ability to collaborate on-line with unknown parties.

Different matching strategy

At this point, I have not fully explained how I came to select the “Dot-com era” as a candidate for the inception of such a disruption. This is better explained in a separate post. In short, I have been re-evaluating the triple energy-communications-infrastructure, initially because I could not fully reproduce the explanation of how certain events would fit the triple, and partly because I found it “tricky” to use repeatedly or with predictive intentions.

Jeremy Rifkin mentions that he applied it “[..] at least 7 times [..]” over the period spanning the first and second industrial revolution, and mentions several interesting examples. It left me thinking that this number of applications seemed arbitrary over so long a history of humanity, so maybe there are other characteristics. Characteristics that are able to represent this successful triple, but also allow for broader application and/or earlier predictability.

A future article will go into detail regarding this different matching strategy. For now, the mechanism through which I reached the idea for “the Dot-com era and thereafter” as third industrial revolution, is not important. The method itself is not deterministic for the viability of the finding. What matters is if it satisfies the triple – assuming you value that indicator – and if the result makes sense.

This revolution as development benchmark

In The Third Industrial Revolution it is mentioned that a country’s relative development status can be determined by comparing the developments (time-period, timespan, events) of industrial revolutions to those of other countries. He mentions comparing the ways in which America, Europe and China experienced previous industrial revolutions: using timeliness to indicate how far they do or do not lag behind other western countries. This development can equally be used to benchmark (societal) development in various countries. And, given that we have lived through this and developments have only recently calmed down, reflecting on this now may give valuable insights, especially given that the same has been done already for the first and second industrial revolution.

Key learning points

Some key learning points to take away from this “imploded” industrial revolution.

To me, these are interesting observations. I wonder if they always hold true, but at least they make for good food-for-thought. Note that I have not written this post to discredit Jeremy Rifkin’s ideas, but rather because they are so interesting. The triple is a powerful, yet very simple concept. It is out of frustration that it seemed to not-quite-work in all cases that I explored this further.

This post is part of the Human Advancements series.
Other posts in this series: