Thursday, 11 April 2013

The end of globalisation and 'everything on the internet'

We all know about globalisation, right? It's either the greatest evil of modern times stamping on the human face for all eternity (nod to Mr Orwell) or it has resulted in supreme efficiency savings due to a global division of labour and consequent specialisation that Adam Smith saw in microcosm in a pin factory all those years ago. Either way, we live in a global world. But for how much longer?

In the first quarter of 2013 Portugal created 70% of its electricity using renewable means. I don't want to belittle Portugal, as it's a delightful place and very progressive in technology in many ways. But if Portugal can go so far, and presumably it'll be at 100% within the next couple of years, then what's stopping a lot of other countries? Actually probably not a lot apart from the necessity and the will. If you still have cheap oil and gas you'll continue using it, but the price is only going one way. At some point, however, the sight of tankers ferrying hydrocarbons around the world will become a thing of the past. Every country will aim for energy independence. OK, perhaps not all of them, but virtually every country has some renewable energy asset it can harness. And then one pillar of globalisation will be removed. Power generation will get more and more local.

I'm also increasingly convinced that the shipping of manufactured goods will become more and more a thing of the past too. Labour costs around the world, and shipping costs to get the products to market, are also only heading one way. And that's before you get to 3D printing and the subsequent potential for local fabrication. Buy a door handle shipped from China? Why bother? I'll knock one up on my 3D printer.

Of course this doesn't mean an end to world trade. Raw materials are still unevenly distributed. And they will need to get to the people who want them. And there is going to be a continuing economic argument for manufacturing complex devices such as cellphones in a single point. But even that will erode over time.

And as the cost of travel rises with oil costs, we'll more and more turn to the virtual world for business meetings etc. and average Joe will be less able to afford to fly long haul. I know this is old territory but it is happening. Could all this point to a world that had once grown smaller growing much bigger again? Perhaps mine was the generation that reached a zenith in terms of having to travel for work and being able to travel for pleasure. The subsequent generation will do both to a much lesser extent. Mind you, if you want to see the world, you can always get the train/bus/scooter/truck/etc as I did. It just takes a bit longer.

The question then is: so what? Well, as a technology strategist the relevant thing is that the old 19th century industries* such as manufacturing etc will be reinvented in a radical way that requires connectivity and local intelligence. Companies that previously did business by making things will do so by selling designs. Imagine Ikea as a virtual playground where users download plans for items, pay a royalty and produce the content themselves. That is a connected world. And that's not just an internet of things, it's everything on the internet. Transport, manufacturing, news, you name it. It's all on the net.

*Ironically many industries that I'd count as being pre-19th century (banking, mining etc.) will continue to thrive.

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