Finite planet. An End to Limitless Resources. At the recent BT Global Services Istanbul CXO Summit, our Big Conversation turned to the question of how we do a lot more with what looks like an increasingly inadequate resources base.
Istanbul. November 2012. BT Global Services CEO, Luis Alvarez makes the point that the Big Issues of our Big Conversation with business and technology leaders are “not just something that is happening to us but something that we need to influence”. That view is at the heart of the Global Services emphasis on Connecting for a Better Future. But creating relevant and sustainable change is unsurprisingly a major challenge.
Luis revisited the fact that, globally, we will need to produce more food in the next 50 years than was previously consumed, in total, during ten thousand years of world history! The enormity of the challenge is difficult to comprehend. But the practical tasks it sets leaders and their organisations are not insurmountable, as Bas Burger of BT went on to explain.
In a perspective presented to our Istanbul audience, Bas shared the Global Services view of pressures on key areas of global resources. In the Unbalanced Economy, huge population growth is a constant change driver. In 1950, the world was home to 2.5 billion people. Today, our planet must feed, shelter and accommodate the aspirations of 7 billion global citizens. What are some of the key impacts?
Ironically, as the world’s human population increases by 215 thousand new lives each day, food is not the only shortage. There is an imbalance in the labour supply that leads to shortages of many of the key skills required to resolve the issues we face. The pressure on land to produce food is enormous. Since 2009, around 50 per cent of the world’s rural populations have migrated to cities. The land consumed by resulting urbanisation is lost to food production. At the same time, the new urban populations grow more prosperous. And that means we need to grow more crops to feed more livestock to satisfy the hugely increasing appetite for meat.
As more people move further away from the centres of food production, their daily bread has to travel longer distances, thus increasing demands for fuel. It is estimated that the world will see a 30 per cent increase in fuel demand over the next three decades. Around 90 per cent of this demand will come from new, high-growth economies.
The problems are vast. They seem unconnected: price rises in marine diesel here; shortages of plant pathologists there; movement from cottages to conurbations 10 thousand miles in another direction. But what they all have in common is the idea of the supply chain. As Bas went on to explain, every company with any global or international exposure must now look at, and understand, the supply chains that operate in their worlds.
The supply chain is in fact very much like any other ecosystem, with apparently unconnected phenomena making an unpredicted impact, in sometimes surprising areas. For example, if fuel prices rise, ‘cheap’ goods manufactured thousands of miles away from the point of consumption suddenly become too expensive to ship. So, “competitive locations” are quickly redefined as being closer to their end markets – a major opportunity for a country such as Turkey, with its status as “on the doorstep manufacturer” both for Europe and many other key regions.
Fundamental reappraisal of how best to match finite resources to apparently infinite global demand starts with a reappraisal of the supply chain. It has the capability to cut resources consumption while increasing traceability, efficiency and customer trust. It can create “knowledge chains” that redistribute scarce human expertise to the places where it is most needed – without leaving the office. We can do a great deal more with a lot less – which is exactly what we must learn to achieve after the End to Limitless Resources.
In our next Blog Post from Istanbul, we look at the region’s current attitudes to Supply Chain development and hear more about the positive impact of enabling Supply Chain technologies.
To view the slides and videos from the Istanbul Leadership Summit visit here.