Internet of Things, a menace to profit?

IoTJeremy Rifkin, in a recent New York Times article explains the theory that is the basis of his book: The zero marginal cost society “. The argument begins with the observation that goods and services produced at a distributed marginal cost close to zero are fast increasing. Many are well known: Napster (1999) for music, Wikipedia for knowledge, and then video, audio, text (Free by Chris Anderson is the most famous example); all those for free or semi-free, in a circuit that bypasses the traditional market. And the phenomenon extends to other sectors: manufacturing, education, energy, and in every sector, even if the fixed costs last, the marginal cost of each additional unit is drastically reduced . Traditional economics explains the phenomenon of the market as a gimmick to attract customers towards luxury goods and specialized services that make the GDP grow, but the number of the latter is limited. Rifkin notes that the phenomenon is likely to increase dramatically thanks to the Internet of things, that is, to all physical devices, equipped with a chip that can connect to the network: the effect will be disruptive. It refers to his thesis on ” smart grid ” energy, smart grid that will allow  each household to produce energy and to decide whether to consume, sell or store the surplus according to demand. These transactions will take place at marginal cost close to zero. At this point the question is: is all of this sustainable, it will kill the market and therefore the economy? Rifkin is optimistic and notes that even today, in the U.S., the no-profit economy has increased from 2000 to 2010 by 41 %, while only 16.4 the classic one, and in 2012 the GDP produced by the non-profit was 5.5%. It may be noted that starting from a smaller size, the growth rate of the no-profit is likely to be higher than the traditional economy. But it’s true, as Rifkin says , that the pattern of use of access instead of ownership (as he wrote in his book) is spreading: think of the effect of car sharing in smart cities, and its impact on car ownership. The sharing economy has produced income for U.S. $ 3.5 Mdi in 2013. The same employment crisis (the forecasts for the no-recovery of jobs as a result of the automation of many jobs is boosting) pushes people toward occupations traditionally belonging to the no-profit in fringe markets: elderly care, health care, environmentsl restoration and so forth . As for the inability to self-sustaining no-profit Rifkin notes that recent studies held in 34 countries, the sector is self-financing to 50% with revenue from services, 36 % from government support and 14 from donations, enough to say that capitalism is not exceeded, but tends to be resized


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