As a result of the two industrial revolutions, the Net economy signals the third major revolution. These three revolutions function like a game of dominoes (inspired by The Third Industrial Revolution, Jeremy Rifkin, 2006) :
First Industrial Revolution (beginning around 1700)
- Energy : steam engines (trains and boats).
- Information : mechanization of printing presses.
- Space-time : the region.
- Literacy : literacy through the first public schools.
- Production: first manufactures (steam and coal).
- Change in behavior : migration from the countryside to the city.
Second industrial revolution (beginning around 1900)
- Energy : combustion engine (petroleum), then automobile and tractor.
- Information : mass media (especially television), where citizens are anonymous and passive. Then, Internet 1 and 2, where citizens create content (social networks are then personalized).
- Space-time : the continent.
- Literacy : the interactivity of digital systems.
- Production: electrified plants (with robots I)
- Change in behavior : migration from the city to the suburbs (because of the automobile).
Third postindustrial revolution (2020?)
- Energy : green, renewable and distributed via a grid smart (thus developing a low-carbon economy).
- Information : social networks will become collective.
- Space-time: an enlarged space and a more concentrated time.
- Literacy : helps with ideation and decision-making.
- Production : telework and teleloisers will converge, the daily becoming semi-automated.
- Behavior change : migration from real space to cyberspace, thus taming proximity due to georeferencing, which makes possible a local economy.
The third revolution is not based on the tools used, but on the workers who are leaving factories en masse (automation and exportation of jobs) :
The Economist, le 21 avril, 2012.
It is an economy where activities are dematerialized via digital capabilities in the form of services and automation. It has become the main growth engine of the 21st century (job creation, greater productivity and innovation). We are already feeling the significant effects of the internetization of the economy :
- Companies that use the Internet more intensively grow twice as much as others (McKinsey Global Institute, 2012).
- Automation projects lead to new investments that make the organization of work smarter (Macroecomics Annual, 2003)
- The explosion of digital technology has a significant impact on per capita GDP; While the rate of high-speed penetration leads to an increase in employment (OECD, 2012).
- The digital economy, which is confined to the Internet sector alone, will reach a value of $ 4200 billion in the G20 countries (Boston Consulting Group, 2012).
By globalizing networks, this global platform completely changes the nature of the production and distribution of content by developing new types of access between the producer-creator and the consumer-citizen :
Changes that are already under way :
- greater technological convergence (Bundling) ;
- greater economic convergence (Triple play market) ;
- advertising and marketing now add 40% to the costs of content and services ;
- the emergence of new types of markets linked to mobile and the shift from broadcast to georeferencing.
The mutations to come (2020?) :
- the Internet of objects (an individual could possibly connect to an average of six devices) ;
- new types of computers, sensors and robots ;
- more customized interfaces and search engines because of the customization current favoring the use of recommendation algorithms ;
- much more content investment: more successful web-series (the black gold in the 21st century being copyrights) ;
- 4K ultra HD television with an inevitable battle of formats from promoters (TV 2.0) :
Customer focused Competitor focused
Logic : Massification Segmentation
Centralised (top down) Distribu. (bottom-up)
Clientele: Large audiences Niches
Leadership: Promoters Consumers
(Law of supply) (Law of demand)
Production: Tech. Analog: Tech. Software
Each media is multi-platform
Customer focused Competitor focused
Logic: Massification Segmentation
Centralized (top down) Distributed. (Bottom-up)
1995 First online sales (especially books).
2005 Membership Bonus and Loyalty Program
(Free shipping for example).
2006 Rental of memory space on a cloud.
2007 Kindle : from the paper book to the electronic book.
2007 Smartphone and tablet.
2010 Application of bar codes.
2012 Robotisation of the warehouses.
2012 Sale of local advertising.
20 ?? Delivery by drone.
The main elements
- georeferencing to reach consumers wherever they are ;
- interactivity that allows direct access to consumers’ wallet ;
- price comparison (showrooming), which makes it possible to choose from a range of options ;
- dematerialization, which allows for very rapid operations.
The equation of the business model could become (see the example of the arrival of the smart devices towards 2007);
More choice + more relevance = more customization.
Unlike industrial firms that physically occupied a market and whose profits were generated by high prices, post-industrial firms will specialize in more limited sectors. Contents and services can be sold in several territories at once because they are virtual. Profits will be generated by very small margins of profit, but multiplied in very large quantities because they are located in clouds.
To the aggregated general public of the past will be added millions of niches ready to disburse for added value, hence the possibility of developing approaches based on proximity.
USA vs China
The two leaders, the Sino-American duo, become a knot of contradiction that resembles an old couple (I can no longer live with, but I can not live without). Their close economic and financial integration leads to a growing rivalry :
Uncle Wang shades Uncle Sam.