Welcome to the Zero Marginal Cost Society
Transforming Banks for a Digital Future: The Winners, The Losers, and the Strategies to Beat the Odds
In a zero marginal cost society, the collaborative commons will bypass the conventional marketplace, and society will shift from an exchange-oriented economy to a shared one.
By Samuel Greengard
It may not be immediately apparent to CIOs but the global economy is undergoing a profound change. The rapid advance of digital technology—and the introduction of the Internet of Things (IoT)—is about to blow up everything you thought you knew about business and IT.
Jeremy Rifkin's most recent book, The Zero Marginal Cost Society, offers a glimpse into a brave new world where the IoT and an emerging collaborative commons allow consumers to bypass the conventional marketplace. Already, it's possible for billions of people to not only produce but also share their own music, videos, photographs, news, knowledge and other virtual goods for nearly free.
More importantly, emerging technology and connected systems are ransacking existing business models. Suddenly, it's possible to share cars (Zipcar), dwellings (Airbnb), clothes (ThredUP) and countless other items—again, at near zero marginal cost. Over the next decade, as 3D printing evolves further, expect all sorts of things to fall into the zero marginal cost bucket.
Disruptive may not be a strong enough word to describe this situation. The collaborative commons bypasses the conventional marketplace. It shifts society from an exchange-oriented economy to a shared economy. At some point, we'll be saying: Many of these items were once expensive and companies made handsome profits selling them! No more!
You better be extremely creative and innovative in whatever industry you're in … or face eventual extinction. What's more, expect companies to take on a diminished role, serving as an aggregator or partner for services and solutions, Rifkin argues.
The Reshaping of Labor Forces
These same dynamics are reshaping labor. Already, factories are brimming with robots and computers tackle the work that once took dozens or even hundreds of people. In addition, machine intelligence is advancing rapidly and it's only a matter of time until computers can adapt and tweak algorithms on their own—essentially becoming autonomous machines that possess a level of artificial intelligence that humans simply cannot match.
Adios to millions of jobs. Whether we can make them up, who knows?
There's no escaping the tractor beam. For CIOs, it's critical to view the enterprise and IT in an entirely different way—and figure out how to swim with the current rather than fight it. As Rifkin puts it, "The powerful social forces unleashed by the coming zero marginal cost society are both disruptive and liberating. They are unlikely to be curtailed or reversed."
Photo credit: Image courtesy of Zipcar.
About the Author
Samuel Greengard is a contributing writer for CIO Insight. To read his previous CIO Insight blog post, "It's Google Time," click here.
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