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The future economic and food crisis, an opportunity for short circuits?

Source: actualité.com

The Ukrainian crisis, following the pandemic, puts our country at risk, among other things, for the supply of food products. In addition, a combination of climatic events in a number of countries could lead to an unprecedented rise in food prices (MSN).

The question you are asking is what this has to do with digital technology and digital sovereignty. I’m coming to that, but for that, you’ll have to go to the end of the article.

 

What impacts on food products?

 

Ukraine, a net exporter of nearly 9% of the world’s wheat, has seen its capacity to export its stocks and produce its next harvest drastically reduced by the conflict that has shaken it. And Russia, which represents 19.5% of world wheat exports, will choose its commercial partners according to its own interests. (Le Courrier International). 

Unfortunately, the supply deficit will not be compensated by other exporting countries such as the United States or Canada, which are affected by climatic hazards.

As an inevitable consequence, we can anticipate a strong tension on the markets due to a growing gap between the decreasing supply that we have just mentioned and a demand that is increasing.

But the challenges do not stop there, the explosion of energy costs and certain raw materials such as aluminum and plastic (linked to the increase in the price of oil) will severely impact the entire value chain of the food industry.

The picture for the weeks and months to come is therefore rather bleak. What answers to bring?

 

Some ideas for consideration?

 

The concern of many French households is therefore likely to focus on purchasing power, with the necessary refocusing of priorities on the satisfaction of basic needs such as food and heating. Mechanically, if these two important budget items explode, the share allocated to other consumer goods will mechanically decrease, with the risks that this represents for the whole economy.

To play on the food budget, there is perhaps a win-win track, that of short circuits. Indeed, buying directly from the producer allows us to free ourselves from the increases linked to intermediaries, only the additional cost linked to raw materials remains to be absorbed.

Can this practice also be applied to other sectors? Can we thus reduce the costs linked to the explosion in energy costs? For example, will it still be profitable to have our industries completely relocated to Asia? Should we not seize this crisis as a real opportunity?

The paradigm of delocalization must be reviewed. We need to think about relocating a number of consumer goods productions, by rethinking the model thanks to new technologies! The current model where factories are spread all over the world, with production elements travelling around the world several times, before ending up as a final product destined for consumers, has had its glory days but we can see that it is undermined by the slightest serious crisis (health, political). Energy costs are increasing exponentially and can only be reflected in the cost of the final product… A maritime container that cost 3000€ delivered to a European port 12 months ago now costs 17000€. (Figures before the Ukrainian crisis). These different elements call into question many of the precepts on which our consumer societies are built…

 

And the digital in all that?

 

In the reinforcement of short circuits

Digital technology has a role to play, which in my opinion is essential in the upheavals to come. The choice of digital players to help set up these short circuits can also be a winning one.

What kind of choice are we talking about?

First of all, let’s choose platforms that respect your private data. This avoids your data being sold to digital giants, especially American ones, who are not very eco-friendly in their industrial approach.

Let’s choose marketplaces that respect local entrepreneurs and independents, and not Asian players who dump… There are players whose local anchoring aims at favoring local players, and above all whose spirit is not to keep captive the Internet users but to push them precisely to exercise their curiosity towards the different players around them.

You will object that this is a utopia. Well, I know at least one such network that exists, it is #smartrezo! It is being built little by little, it is far from being perfect, but the richness and the value of its content as well as the ethics behind the project make me think that it is urgent that you take an interest in it.

In the relocation of our industries

The other aspect, within the framework of a long-term action, concerns the relocation of various industries by considering it in the light of new technologies. What do I mean by this?

First question: in the face of the hyper-customization of products that we are witnessing, should we remain with mass production models?

In the face of ecological challenges, and therefore the need to save resources, is the classic industrial model still appropriate? From my point of view, the answer is obviously no?

But then, what future can we invent? Once again, digital technology will have its place. In my opinion, two pillars will be essential to this transformation: Artificial Intelligence and 3D printing. The first will enable us to design optimized industrial processes for the manufacture of resistant parts that consume few natural resources, while the second will enable the physical production of these components. With the progress that can be expected in these two pillars of digital technology, it is possible to optimize the production of any type of consumer good. What does this have to do with short circuits? Contrary to the first reflex, there is an obvious connection, the creation of local production units thanks to 3D technologies can allow a relocation of part of our production, allowing us to produce the right quantity.

The effects of this transformation will have massive social and economic impacts that are difficult to envisage. The added value could be found in the capacity to propose the digital models necessary to manufacture the good, and not in the production tool.

On this part, we agree, the change will not be in the short term, but it could happen much faster than anticipated. Indeed, a period where energy was cheap and abundant (but polluting), is coming to an end, and this can only have restructuring impacts on our societies and economies.

 

Conclusion

 

These last two years have confronted us with disastrous events, shaking many of our certainties. As is often the case, in every misfortune something good can be taken… Indeed, we can choose to seize these difficult times as an opportunity to make radical, but necessary, transformations. It is possible to use digital technology to promote short circuits, which have the advantage of promoting local production and will therefore have a positive impact on the economy through significant job creation.

These transformations, provided they are carried out correctly, can lead us to a new era of prosperity, more socially and environmentally responsible. And this transformation can only be achieved through a controlled and sovereign digital economy!

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