“We’re closing up shop. Wetbots made us broke.” The production chief of iRobot consumer products grins ruefully. “Luckily we’ve still got our military contracts!”
Since open source, peer production of printed solar panels has made electric power almost zero cost, robots have taken over agriculture, mining and most manufacturing. With no jobs but plenty of creative spirit, the ‘maker’ movement has spawned millions of backyard factories, churning out low volume, low cost 3D printed products for anyone and everyone.
Hipster geeks have, quite disparagingly, called these one-man factories “wetbots” – humans doing the work of a robot.
Multifabbers for the home or garage, capable of printing in plastics, metals and electronics, all at the same time, completely revolutionized the manufacturing process, even replicating themselves. Bioprinters have done the same for food and organic goods like leather. The Internet of Things made us massively more productive, in every business.
But the ultimate leveller was energy, because all these machines need power. Cheap solar substrates and the sharing of surplus energy – called the “energy internet” – sealed the deal for networks of individuals to produce whatever they need, at almost zero cost, other than their spare time.
Now even robot companies like iRobot are at risk in this new paradigm. Profits from innovation evaporate in the face of competition from the wetbot network. Brands lose their value. Is this the end of capitalism as we know it?
ANALYSIS >> SYNTHESIS: How this scenario came to be
Energy and Abundance
The accelerating technology revolution, an exponential growth in innovation and ideas, promises abundance for society, and the end of economics based on scarcity. The growth in innovative technologies in recent decades, driven by the sharing of ideas, was enabled by the revolution in global communications; the internet, mobile phones, social media, and now the internet of everything.
Jeremy Rifkin points out that this technology revolution is closely linked to innovation in energy production and consumption. Says Rifkin: “The great economic revolutions in history occur when new energy regimes emerge and new communication revolutions emerge to organize them.” We are on the brink of such a revolution, which Rifkin calls the Third Industrial Revolution.
The technologies which fuel this transition are big data and advanced computing, ubiquitous connectivity of people and machines, robotics and automation, and additive manufacturing or 3D printing. Together they provide us with the tools, not only to utilize resources more efficiently, but to create new models for production and consumption of everything, including energy.
Open source and collaborative innovation enables peer production, where we can operate in a network of distributed micro producers, rather than monolithic manufacturing and supply chains. Additive manufacturing makes this possible at the very small scale, and shifts production closer to consumers, eliminating costly distribution networks. Digital goods, like designs and data, can be distributed electronically, at negligible cost.
Internet platforms enable us to collaborate in the consumption of products too. The sharing economy lets us relinquish ownership of assets and share in the consumption of the services we need instead. Connectivity and data allow us to do this efficiently and effectively.
Robotics and advanced computing enable the automation of everything, from driverless cars to autonomous drones to mechanized mines and farmer-less farms. But all these machines need energy too. 3D printing will help reduce the cost of solar power, just as nano materials increase its efficiency. Connecting micro producers and collaborative consumers of electricity in an ‘energy internet’ will drive the cost of surplus power towards zero.
Zero Marginal Cost
The marginal cost of a product is the cost of producing one more unit, assuming the fixed costs have already been absorbed by existing levels of demand or production. For digital goods, like music, the cost of another copy or download is negligible or zero. For 3D printed goods, the cost of an additional copy is the ‘paper’ and ‘ink’ needed to produce it, and the energy to power the printer.
As abundance reduces the input costs, and zero barriers to entry allow competitors to mop up any excess demand, we get the situation where marginal costs become effectively zero. In that situation, there is little incentive for corporations to compete with self-sustaining cooperatives. This implies that the capitalist model needs a rethink. With the automation of everything, no jobs, and abundance making everything nearly free, how will economies survive?
A possible outcome is the rise of subsistence printers, backyard factories eking out an existence with additive manufacturing for their local communities; and perhaps the re-emergence of craftsmanship as a valued skill.
The New Paradigm
Rifkin says the Collaborative Commons will grow and eclipse capitalism. Steve Denning says much of what we thought we knew about work and management, in this emerging world, is “plain, dead, flat wrong!”
The transition may be painful, and the turmoil inevitable, but ultimately a new paradigm must emerge. How it will be shaped, what it will look like and be called, and when it becomes established, only the future will reveal.