Very interesting read, thanks Ben. This made me think of some of the other protectionist measures under debate in the U.S., specifically the tariffs on imports that the U.S. steel and aluminum industries have been lobbying for over the past few years to combat alleged “dumping” by Chinese producers. While it would seem to me that imposing these tariffs would protect steel and aluminum jobs in the U.S., the Trump administration is dragging their feet, despite promising to implement the tariffs earlier this year (https://www.nytimes.com/2017/10/26/business/trump-schumer-steel-aluminum-tariffs.html). In fact, it’s looking like foreign manufacturers are shipping more steel and aluminum into the U.S. to try to get ahead of any tariffs that may be imposed (steel imports jumped 20% since April), making the problem worse in the near-term as U.S. producers continue to lay off workers and close plants. It seems contradictory to me that the administration is so aggressively focused on the NAFTA topic to somehow increase U.S. jobs while ignoring other mechanisms and losing existing U.S. jobs in the process.
Fascinating topic – thanks for sharing, Badar. As I read your essay, I started wondering about some of the potential risks of autonomous trucking and whether these might outweigh some of the benefits you described. While I agree that the accident rate should decrease substantially, any accident involving a large truck can cause a lot of damage and/or loss of human life. In these cases, I imagine Daimler would be liable as the manufacturer (assuming they own the automation platform as well). If Daimler trucks get into a few accidents in the first few years of operation, even if the accident rate is extremely low, could a few incidents harm their reputation to the extent that they have to shut down this business? Additionally, self-driving involves remote engine programming, which introduces cybersecurity risk. Daimler would need to continuously monitor and improve cybersecurity controls, else someone with bad intentions gets access to a platform controlling a fleet of heavy freight vehicles (http://www.ttnews.com/articles/automated-driving-puts-added-emphasis-cybersecurity-connected-trucks). I agree that there is huge potential in an autonomous trucking fleet, though wonder if Daimler or anyone else can really overcome the risks introduced by removing the human “control” element.
I never realized how water-intensive almond farming is! It’s great that Blue Diamond is taking an active approach toward educating its farmers on the water scarcity issue and encouraging practices that conserve water, and I agree with your suggestion to encourage them to use the Continuum. Longer-term, however, I wonder how long these farms can survive if temperatures continue to rise and droughts worsen, even with new practices and technologies. However, I wonder if Blue Diamond should start researching other potential farming locations and investing in new farms. For example, the University of Idaho is testing whether almond trees can be farmed in the southwestern part of the state (http://www.capitalpress.com/Orchards/20160509/researchers-test-almonds-in-idaho). I realize this would be quite a challenge given Blue Diamond’s situation as a cooperative of farmers, which likely gives each farmer a certain degree of autonomy and voice in these types of decisions. Combined with the fact that it takes years to grow new almond trees, that would make it especially difficult to relocate the farms to another part of the country, though given climate change trends it may be something to consider.
This is a very interesting topic. I agree with you that insurance companies like AXA should work more closely with governments, though I struggle with how that will actually work in practice. Hurricanes and other natural disasters, the incidence of which appears to be correlated with climate change, are having a tremendous impact on developing nations around the world. Yet, both governments and individuals in these countries are likely to have a much lower ability to pay for things like flood insurance than their counterparts in developed countries. An added challenge is that awareness of climate change in developing countries is rather low –a recent study showed that 65% of adults in developing countries have never heard of climate change (http://climatecommunication.yale.edu/publications/analysis-of-a-119-country-survey-predicts-global-climatechange-awareness). However, of those who are aware, most people in developing countries perceive climate change to be a much greater threat than do those in developed countries. Perhaps partnering with governments in developing countries to explain the specific risks to their communities – especially using the predictive data capabilities you described – will increase the impact they can have.
Very interesting read — I’ll be curious to see whether and how Tesco adapts to these challenges, given the threat you described from discount retailers such as Aldi and Lidl. It makes sense that you would see customers shift toward retailers that are perceived to be more “value-oriented.” To mitigate the impact of price increases on customer value perception, it looks like some stores are reducing product sizes while keeping prices constant, hoping customers won’t notice (https://www.bloomberg.com/news/articles/2017-04-11/eat-more-marmite-and-skip-flossing-to-beat-brexit-inflation). It’s unclear whether this idea originated with the retailers, wholesalers or manufacturers, but I wonder if the potential upside in the near term is worth the reputational risk if customers wise up to this strategy given the heightened sensitivity around Brexit’s effects.
I also wonder what will happen to the smaller grocery stores and chains that have substantially less purchasing power with their wholesale suppliers. Perhaps there will be consolidation among them, or they could get picked up by some of the larger chains.