1. More from less

Organisations and people want to live longer and better but budget constraints mean that we have to do it with the same, or fewer resources. This is only achievable if we are smart and innovate our way to the future

- resource scarcity with increasing demand of limited natural resources (food, water, energy, mineral resources, etc) owing to population growth and demand for economic growth

For example, some trends in the oil industry (Christopher Sell, 2018) 

Since 2007 to 2018, the oil industry has to face the following challenges 

  i) global recession (resulted in falling demand and the need to cut production) 

 ii) volatile prices, eg $US 30 to 140 per barrel (with Chinese consumption significantly increasing in 2010) 

iii) US shale revolution (innovative tracking technology resulting in production from previously inaccessible shale oil deposits; by mid-2014, US production had jumped more than 50%) 

iv) a market-share war (the world's largest oil producer Saudia Arabia wanted to increase its market share so it increased production which drove down prices. This made oil from US shale production unprofitable. Then in 2016, the Saudis secured the co-operation of 10 other oil producing nations, including Russia, which saw oil prices improve and the start of Saudi-Russian-led identity) 

v) output cuts (US government renewed sanctions on Iran's exports and penalised Venezuela; other oil producers introduced production cuts)

- change the way markets operate and the way societies live, work and govern themselves, eg go for low resource use options like recyclable materials, etc. This leads to price rises and allocation away from the world's poor people, and an increasingly significant underlying cause of armed conflict and geopolitical instability

- billions of people's basic needs are un-met owing to poor natural resource sustainability management and inequitable wealth distribution

"...the stakes are high. The world's population is expected to reach almost 10 billion by 2050, at the same time as climate change interrupts traditional farming practices. Eating preferences are changing, too, with the number of people calling themselves vegetarians and vegans soaring and shoppers increasingly taking sustainability into account when buying groceries..."
Beverley Head 2019

"...animal agriculture uses 30 to 50% of the planets of non-ice covered land surface, more than 30% of all freshwater each year and creates more greenhouse gases than transportation...... the cow.....is very inefficient. You need 33 g of plant protein for every 1 g of protein produced..."
Nick Halla as quoted by Beverley Head 2019

It is expected that traditional meats like beef will become luxury items and our protein will come from alternative sources like bright-green algae, lab grown meat, insects etc

Future trends

"...- Meat alternatives grow market share, cementing the rise of plant-based proteins and laboratory-grown meat
    - ethical consumers trigger shifts in expectations while global population and overall protein demand continues to expand
    - the personalised food movement develops as the human body is increasingly instrumented
    - food intake becomes guided by genomics and epigenetics coupled with daily analysis of data about individual's weight, stress levels, blood pressure, glucose levels, etc.
    - new food production systems; more urban and vertical farming, sustainable and closed loop production
    - new food preservation systems allow restaurant-quality meals to be prepared and preserved
    - conventional farming, buoyed by digital technologies, tracks provenance through the food chain and linking supply chain from producer to consumer
    - Australia develops a reputation as a "delicatessen" known for high quality specialised food as farming focus shifts from yields to profit..."

Martin Cole & Phil Morle as quoted by Beverley Head 2019

- need to find ways to extract more value out of limited resources with increasing reliance on innovation and technology as the solutions to using resources efficiently, minimising waste, reducing pollution and fairer wealth distribution

- intelligent governance structures are equitable, effective and efficient in sharing of resources across competing needs

- increasing automation of agriculture and migration to the cities results in more urbanites needing resources and less subsistence farming, with the resultant need to produce more from less; with improvement in agricultural technology allowing greater outputs from fewer inputs (Can technology keep pace with increasing demand?).

NB There are contradictions in this, eg around 1 b. people are always hungry (under-nutrition with too few calories) and another 1 b. suffer ill health because they eat too much food and/or the wrong types of food (over-nutrition with too many calories)!!!!. The world has enough food. This means there is not scarcity or inadequate food production but a food distribution and wastage problem, ie FAO estimates that around 22% of edible food is wasted; this wastage would feed all the hungry people. People are more likely to starve from impacts of armed conflict, forced migration, bad governance, corruption and poverty than natural disasters, food production, etc. This raises the issue of food security and is linked with poverty eradication.

Some statistics:

- in the last two decades around 700 m.  people have escaped from extreme poverty
- there has been a 41% drop in mortality rate of children under 5
- a reduction in number of hungry people in developing countries from around 23% of the total population in 1990s to around 15% in 2012
- over 2 b. people gained access to improve potable drinking water between 1990 and 2010
- the transition from subsistence agriculture to manufacturing to service industry focus is putting more pressure on use of resources, eg China.
- some large opportunities for economic growth revolve around handling the challenge of lifestyle-related elements of mental health and physical health (see below for more detail); by improving our diets, sleeping patterns and lifestyle we can save money in the healthcare system and increase productivity. For example, in the USA, slowing the annual growth rate of healthcare costs by 1.5% would increase GDP by 2% in 2020 and by 8% in 2030
- around 2004 there were 8 Chinese companies in the Fortune 500; in 2015, there were 100.

Behind this trend is explosive population growth and income growth, ie
  i) explosive population growth is a result of advances in agriculture, medicine, manufacturing, etc. For around 180,000 years, human population grew only by a few million people; at the end of the 20th century there were around 1.5 b. people; at the start of the 21st century, there are 6.1 b; 2015 there are around 7+ b. Estimates of the human population by 2100 will be around 10 b. Thus from now until the end of the century, resources are needed for an extra 3 b. people!!!!! The population growth will be uneven with most growth occurring in the world's poorer countries where living conditions are the hardest. Also, people are choosing to live in urban areas, ie data forecasts  expect by 2020 the world is 56% urban and by 2050 it becomes around 70%. It is projected that China will construct almost 2 cities the size of London every year over the next 20 years to accommodate its rural to urban migration. When people migrate into the urban areas, they cease to be subsistence farmers and become dependent on others for resources (Stefan Hajkowicz, 2015).

  ii) income growth - the proportion of people living in developing countries in extreme poverty, ie less than US$ 1.25 per day, fell from around 50% of the total population in 1992 to less than 25% in 2010. Yet people in developing countries can spend up to 80% of their income on food. The expansion of the world economy (measured by Gross Domestic Product, ie GDP which is an average measure that hides the unequal distribution of wealth, but is an important indicator of income) is happening faster than human population growth, ie in 1960 annual income was US$ 455 per person; by 2012 it was around US$10,000 (adjusted for inflation). However distribution of wealth has become more uneven. With is a widening gap in net wealth between "haves" and "have nots"One of the benefits of income growth is consumers' buying power increases. This will increase the demand for resources. On the supply side there is a different story. Unfortunately, despite advances in exploration and extractive technology, natural resources have finite availability and limited regenerative capacity like soil, oil reserves, water, energy, etc.  We need to utilise our resources more effectively, efficiently and equitably.

For example, with agriculture, FAO has estimated a 70% increase in food production by 2050 is needed to meet demand yet the world is annually losing 12 m. ha of productive agricultural land (capable of producing 20 m tonnes of grain) to land degradation resulting from human activities like overcultivation and deforestation. Also diets are changing: in developing countries, meat consumption is increasing at around 5% annually. Supply constraints result in volatile food prices; increasing prices result in the many millions of people not having enough food to eat and the resultant socio-political instability/unrest and humanitarian crises. One of the most important factors in food prices is the oil price. It is an essential requirement of farming - used for tractors, farm machinery, transport of food to markets, an essential ingredient of fertilisers, to power machinery in food processing, etc. Yet there is no real, financially-viable substitutes, ie modern agriculture basically converts oil into food. It has been estimated that industrialised farming practices consume 10 calories of fossil fuel to produce 1 calorie of food energy. This explains why oil price changes are closely linked to changes in food prices, eg a 10% rise in oil prices translates to a 3.3% increase in fertiliser cost and a 1.8% increase in food prices (Stefan Hajkowicz, 2015). There are also issues that need to be addressed around using fossil fuels in agriculture, such as carbon emissions, impact on climate change, etc

(NB These figures do not include the massive infrastructure costs around establishing and maintaining the grid with its poles, wires and generation plants that are only needed for a small portion of the day during peak load)

Increasing income and wealth does not necessary make a better person and/or achieve true happiness. It has been found that wealthier/high income individuals are statistically more likely to
a) break the law while driving
b) exhibit unethical decision-making tendencies
c) take valued goods from others
d) lie in negotiations
e) cheat to increase their chances of winning a prize
f) endorse unethical behaviour at work

In other words unethical behaviour is more likely in the presence of wealth abundance.

Linked with the private wealth abundance is the influence of affluence. For example in the USA

"...what started to emerge......was the dramatic influence of commercial pressures on young people's values and behaviours, as well as an unexpected homogenisation of youth culture resulting in the shared consumption of increasingly ubiquitous media messages......market's creative disruption that revealed the way our values had changed......how we, as Americans, had gone from traditional ethos, underpinned by Judeo-Christian values, of modesty, thrift, humility and discretion; of 'you can't take it with you'; of helping others less fortunate, to a culture of bling, celebrity and narcissism..."
Lauren Greenfield, 2017

It has been claimed the 1970s was when America began a transformation from an empire of production to one of consumption and material-based status. During the Reagan period, the value system changed from about 'who you are' to 'what you are worth'!!!!

"...Morals are completely non-productive in that value system..."
Lauren Greenfield, 2017

From the 1980s onwards, this trend continued and became worldwide with globalism and Internet connectivity. The importance of family and community was a lower priority than money.

The Relentless Pursuit of More

"...consider all of the resources used to create a material world: the steel to build our homes......the natural gas to file our furnaces, the aluminium in our smart phones and tablets. In the world's richest countries, consumption has ballooned by more than a third in the past few decades to the point that in 2010, each person in the 34 richest nations consumed over 100 kg of stuff every day..."
Debra Cohen, 2017

Thorstein Veblen in the 18th century used the phrase conspicuous consumption, ie
"...to describe the behaviour of those who spent extravagantly to bolster social prestige and the economist John Kenneth Galbraith, who blamed consumerism of the paradox of 'private opulence and public squalor'..."
Deborah Cohen, 2017

Then in the mid-20th-century, the disposable and throwaway society (including 'bigger is better') started in the USA.

Consumerism is now regarded as indispensable, ie we need to spend our ways out of recessions!!!!!

Corporate concentration

"...The consolidation is especially pronounced in the technological sector, where a group of large, efficient companies now lord over the fastest growing and most dynamic parts of the US economy. Apple and Google provides the software for 99% of all smart phones. Facebook and Google take $0.59 of every dollar spent on online advertising in the US. Amazon exerts utter dominance over online shopping and is getting bigger, faster, in areas like streaming of music and videos..."

Matt Phillips 2018

This trend is not confined to technology.

"... Almost half of all assets in the US financial system are controlled by five banks. In the late 1990s, the top five banks controlled little more the one fifth of the market. During the past decade, six of the largest US airlines merged into three. Four companies now control 98% of American wireless market, and the number could fall to 3 if T-Mobile and Sprint are allowed to merge..."

Matt Phillips 2018

Occurring simultaneously with this corporate consolidation is a rising income inequality and the declining share of the nation's wealth going to workers. This is most pronounced in the industries undergoing the greatest consolidation.

Hedonic pricing

It is when the price does not reflect the increase in value. For example,

- computing power (it could double over a couple of years, but the price does not reflect this)

- chemically treated fresh fruit (it can offer prolonged shelf-life of the product without reflecting the increase in energy and labour costs)
"...Hedonics can make it look like prices are falling, but we often only include items that are falling and we ignore those ones that go up..."
Pippa Malmgren as quoted by Mark Mulligan, 2017


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