There has been growing interest in scenario forecasting in India of late. A number of organisations have prepared quantitative models of the future; somewhat less often, some have made attempts to tell “stories” about the way the world might change. Among the latter is the Federation of Indian Chambers of Commerce and Industry (Ficci) via its India-specific commentaries on Jeremy Rifkin’s proposition of the “Third Industrial Revolution”.
The future is unpredictable and has always been so. What is new is our heightened collective perception of unpredictability in the global environment; and in contrast, a dependence on greater predictability. As power and responsibilities are shared with ever-larger numbers of non-state actors in a heterogeneous, globalising ecosystem, the business environment becomes increasingly fluid and less easy to predict.
However, future scenarios are not only about risks, but also about opportunities. Nor are they necessarily predictions; they could be eye-openers, or benchmarks from which one may estimate the distance to one’s current or extrapolated future position. They could be situational contexts within which one may imagine one’s responses, survival, transmogrification!
Jeremy Rifkin’s views about the future are well known. In his thesis on the Third Industrial Revolution, he argues: the ability to access and mobilise energy resources is a key factor in determining the productivity and growth of a society. With access to large coal resources and steam engine technology, humans were able to multiply their economic activities. Coal, with an energy density that is roughly double that of biomass, and available in a far more compressed, locally concentrated and easily transportable form, transformed the face of society. However, the availability of cheap and abundant energy has to be accompanied by large-scale intellectual and human resource capability for innovation. Steam-powered printing machinery enabled the development of mass education and the skills needed to design and operate machinery. Thus, the combination of energy resources and communication technology produced a step change in production.
Coal power led to the development of electricity, and the telecommunications revolution attendant upon it. Oil, again roughly, doubles the energy available (per kg) over coal and provides additional volumetric advantages. The liquid format enables transportation via pipelines and in small containers and the development of the internal combustion engine enables the advent of personal, road-based transport, spurring further economic expansion.
Rifkin’s proposition is that the marriage of renewable energy – which is widely distributed, variegated and accessible at highly decentralised points – with the Internet will multiply the game-changing possibilities of both. This is what he refers to as the Third Industrial Revolution (TIR). Like earlier energy revolutions, Rifkin polemicises, TIR will change the world — but in a benign and humane manner.
The plausibility and ecological and ethical desirability of this proposition are incontestable. Rifkin predicates the TIR on the massive uptake of renewable energy, the development of an internet-enabled energy grid, plus some serious technological advancements.
The essence of the joint effort with Ficci is to develop an India story within the conceptual framework of TIR, that is, to spot leading indicators of TIR. Some of the trends studied are: uptake of renewable energy, decentralised business models, decentralised political engagement, substitution of mass labour with knowledge- entrepreneurship, transformation of education, emergence of the non-profit sector as a leading employer, “continental” approaches to business and politics. Substantial researched work and case studies provide a good starting point for an evaluation of megatrends in the Indian business environment.
All scenarios are imperfect depictions of a hypothetical future. A confirmation of a trend, however, requires that evidence of all kinds be considered, not just conforming ones. Further, it can be questioned whether a particular observed trend points towards a unique future scenario. For example, is “frugal engineering” consistent with many scenarios of energy scarcity, or exclusively with a green economy? Correlated features of different scenarios can be mistakenly attributed to causality.
TIR is a powerful articulation of a potential sociological transformation and thereby has immense illuminative and strategic value. It incorporates elements of a social vision articulated by Indian leaders in the past. However, there are limitations to its positioning as a blueprint for development. The demands of TIR in terms of renewable energy deployment are daunting — even for as politically committed and technologically advanced group as the European Union. Ignoring the highly probable coexistence of fossils with renewables does not make for realism. What is, however, interesting for Indian audiences in the TIR concept is the question: could the potent combination of a renewable energy revolution plus internet penetration and a reversible decentralised digital power grid deliver the Holy Grail of socio-economic and political “inclusion” in India? That’s the one that makes you pause and think!
MEGA TRENDS OF THE EMERGING THIRD INDUSTRIAL REVOLUTION IN INDIA
Federation of Indian Chambers of Commerce and Industry