I recently finished reading an insightful book called “The Third Industrial Revolution” by Jeremy Rifkin, an accomplished author and president of the Foundation on Economic Trends, among various other titles and accolades. The book is all about how we need to move from an oil-based economy to one based on renewable energy sources.
I suppose my interest in the book was only natural, since I work for a company that’s all about energy efficiency. But it also struck me that Rifkin was making a case for why this is a great time to be involved in alliances, another topic that’s near and dear to me in my position as Vice President of Global Strategic Alliances for Schneider Electric.
Let’s start with the premise of Rifkin’s book. Here’s an excerpt from the description on Amazon that summarizes it nicely:
The Industrial Revolution, powered by oil and other fossil fuels, is spiraling into a dangerous endgame. The price of gas and food are climbing, unemployment remains high, the housing market has tanked, consumer and government debt is soaring, and the recovery is slowing. Facing the prospect of a second collapse of the global economy, humanity is desperate for a sustainable economic game plan to take us into the future.
Here, Jeremy Rifkin explores how Internet technology and renewable energy are merging to create a powerful “Third Industrial Revolution.” He asks us to imagine hundreds of millions of people producing their own green energy in their homes, offices, and factories, and sharing it with each other in an “energy internet,” just like we now create and share information online.
We constantly hear lots of gloom and doom stories about how CO2 levels are rising too fast and the end is nigh. Rifkin puts the situation in context, noting that we may still have time to make moves and avoid disaster. What’s more he provides a framework for how we can dig ourselves out of this hole, which makes this a refreshingly positive book.
Here’s where the partnership angle comes in. To make the shift to an economy that thrives more and more on renewable energy is going to require development of new value chains around areas such as smart grid, electric vehicles and lots more.
Alliances are a good way to create and test out these value chains. There’s significant risk involved in starting any new endeavor. The choice essentially comes down to a single company taking on all the investment – and hence all the risk – or for multiple companies to partner with one another (and, when relevant, with government agencies, educational institutions, foundations and the like) to share the risk.
Let’s say the challenge is to reduce CO2 emissions. A lot of the job is tied to where energy is used. As more and more people move to cities, cities of course consume more energy. So the challenge becomes how to better understand energy use in cities and to make it more efficient, with the ultimate goal of making it more carbon-free.
Schneider Electric’s strategy is focused on making companies, homes, and cities more efficient and we’re very much on board with the idea that it takes partnerships to make headway. Making the change from oil-based energy sources requires alliances with other industrial players as well as city, state and federal government entities, local entrepreneurs, academia and so on.
In short, it’ll take lots of alliances – and effective alliance management – to get people together and to decide what role each should play to create these new solutions and scale them up. The good news is those are exactly the sorts of issues alliances are well positioned to tackle. What’s more, Schneider Electric is already involved in many smart city and green energy projects around the world. I like our chances.