Today, the European Union is facing a Third Industrial Revolution based on the convergence of three significant technologies: a digitalized Communication Internet, a digitalized Renewable Energy Internet, and a digitalized Automated Mobility Internet that is transforming the way European regions manage, power, and move economic activity.

In the 19th century, steam-powered printing and the telegraph, coal, and locomotives gave rise to the First Industrial Revolution. In the 20th century, electricity, the telephone, radio and television, cheap oil, and internal combustion vehicles led to the Second Industrial Revolution. Today, the European Union is experiencing a Third Industrial Revolution based on the convergence of three significant technologies: a digitalized Communication Internet, a digitalized Renewable Energy Internet, and a digitalized Automated Mobility Internet that is transforming the way European regions manage, power, and move economic activity.

These three Internets ride atop an Internet of Things infrastructure that will reconfigure the way the continent manages, powers, and moves economic activity in the 21st century. In the Internet of Things era, sensors will be embedded into every device and appliance, allowing them to communicate with each other and with Internet users, providing up-to-the-moment data on the managing, powering, and moving of economic activity. Currently, 14 billion sensors are attached to warehouses, road systems, factory production lines, the electricity transmission grid, offices, homes, stores, and vehicles. These sensors continually feed big data to the Communication Internet, Energy Internet, and Mobility Internet. By 2030, it is estimated there will be more than 100 trillion sensors collecting and transmitting data.

Today, private enterprises and government agencies can use Big Data and analytics to develop algorithms that increase productivity, address climate change and dramatically lower the cost of producing, distributing, consuming, and recycling goods and services. This makes European businesses more competitive, but in the future it will fundamentally change the way we manage economic activity in the global economy. The marginal cost of some goods and services in a Smart Europe will even approach zero, allowing millions of people connected to the Internet of Things to produce and exchange things with one another for nearly free in the growing Sharing Economy. Already, a digital generation is producing and sharing music, videos, news blogs, social media, free e‐books and massive open online college courses at near zero marginal cost. The near zero marginal cost phenomenon brought the music industry to its knees, shook the television industry, forced newspapers and magazines out of business, and crippled the book publishing market. At the same time, it also gave rise to new enterprises like Google, Alibaba, Facebook, Tencent, Twitter, and YouTube, and thousands of other Internet companies that made big profits by creating new applications and establishing the networks that allow the Sharing Economy to flourish.

Economists acknowledge the powerful impact the near zero marginal cost has had on the information goods industries but, until recently, they have argued that the productivity advances of the digital economy would not benefit the conventional brick‐and‐mortar energy industry or other sectors that offer goods and services. This firewall has now been breached. The evolving Internet of Things will allow even conventional businesses to make and distribute their own renewable energy, share driverless electric vehicles, and make their own products using 3D‐printers at a low marginal cost in the market exchange economy, or at near zero marginal cost in the Sharing Economy, just as people do now with digital information.

Those are the upsides of the new smart digital infrastructure of the Third Industrial Revolution.