Retail giant Wal-Mart sets bold goals to lower carbon emissions in its supply chain, but needs to go further to achieve ambitious targets
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Great read! Having written a thesis on how the Chinese central government could reduce air pollution in China from power generation, this topic is deeply important to me. I think hydrogen cars is an exciting innovation, but the question to me is how the Japanese government (and the world) might prioritize investment in scaling this technology relative to other means of reducing greenhouse gas emissions. Because of the large costs involved, the Japanese government might identify and focus on the biggest drivers of emissions, which appears to be industries (e.g., factories, double the emissions of the transport sector) [1]. Thus, it might focus on reducing emissions in other sectors in the short term. A cost/benefit analysis might also indicate that Japan is uniquely suited to take other innovations to scale, and could wait for others to develop the hydrogen car technology first. In conclusion, the government should invest in areas to get the biggest bang for its buck to reduce emissions, which may or may not be the hydrogen car in the short term.
[1] https://www.iges.or.jp/files/research/alliges/pdf/20160128/6_GIO_eng.pdf
Fascinating topic! My first concern was around safety – while I’m all for reducing carbon emissions and saving the planet, I am weary of the other negative social consequences that might result. There is almost always a lag between a new innovation and the safety concerns that might result, like in the case of GMOs, and artificially created foods also usually have some downside. Thus I think proving and communicating safety standards will be a major hurdle this product will have to overcome.
Along the same vein, regulatory barriers also seem large and prevent scaling up. According to this MIT Technology Review article, “[meat cultured from cells] may end up being viewed as anything from a food to a tissue-based product that has to be regulated as a drug. The latter would clearly make taking many new products to market far more difficult than startups would hope.” [1]
However, for the organization itself, success really depends on the goal it is trying to accomplish. If its goal is to sell a product that’s better than the status quo (assuming safety is not an issue) to a niche market (socially conscious customers who don’t want to give up meat) and make some money while doing it, this goal might not be that far from reach. If its ambition is to get to a scale that can meaningfully impact carbon emissions and climate change, I’m afraid that will be quite a bit harder.
[1] https://www.technologyreview.com/s/602244/how-do-you-know-your-lab-grown-burger-is-safe-to-eat/
A thought-provoking piece about an important topic! While I agree that chronic disease will become increasingly important in both developed and developing countries, I am skeptical about the use of technology and digitization as a ‘silver bullet’ to improve access to care and health outcomes. Based on the reasons you cited, I do not doubt that digitization will improve supply chain efficiency. Beyond the ‘how’ of delivering drugs lies a bigger strategic imperative for Novartis to work out a scalable business model for serving the chronic conditions segment in the developing world. So far it seems that Novartis is selling these drugs in bundles to governments who then distribute to their constituents. It may be hard to increase demand among governments, who have to manage the double burden of infectious disease and chronic disease [1] and may prioritize the former due to its immediate impacts. If Novartis were to sell directly to physicians or clinics, they would have to strengthen healthcare system capabilities (e.g., primary care) in these countries in terms of chronic disease awareness, diagnosis and treatment, a task they have not had to take on to the same degree in developed countries. While their mobile health apps might help, they cannot build the initial relationships and trust that are needed. These additional supports might create pressures on costs and prices of drugs, as well as profitability for Novartis. In conclusion, for Novartis to succeed in this new segment, it will have to wrestle with some of these strategic questions in addition to increasing digitization.
[1] Novartis Access 1-year report 2016. https://www.novartis.com/sites/www.novartis.com/files/novartis-access-report-2016.pdf
I agree with your perspective that Ford made the right decision given the current business environment in the US vs. China. I also question the ability that President Trump can effectively pass a “big border tax” which he has threatened automakers with. He would have to get lawmakers in Congress to draft and pass a legislation supporting this plan, which they have not done to date [1]. Even if Congress drafted such a bill, big business lobbies would speak out strongly against it and use their influence with representatives to thwart this plan.
In response to the title of the article, I don’t believe that protectionism will improve the livelihoods of auto workers and other lower-skilled workers at scale. President Trump’s taunts have only resulted in one-off efforts of compliance so far, and will continue to have limited effectiveness unless he’s able to transform the current economic environment that entails higher productivity/labor costs and a shift in demand away from goods to services. His time would be better spent on incentivizing companies to reinvest in the communities that they are in or have abandoned, and investing in better preparing talent in the US for workforce demands of the future. The displacement created by automation will continue, and its impact will dwarf any benefits that protectionist trade policy might have.
Great read! The business case is compelling, but I think the challenge will be diffusing this innovation and taking it from one-off experiments/trials to a scaled solution. A few things that I believe would help increase adoption is:
1) Incorporating and communicating even more benefits. Since blockchain is still an earlier-stage technology, I see opportunity for food companies to work with developers to shape it to deliver even more benefits to encourage adoption. For example, food companies have expressed interest in being able to track other attributes in addition to origin, such as temperature, quality standards, and safety certifications [1]. In the case of bacteria outbreaks, I could see this additional information being useful in unpacking not only where the problem occurred, but also why it occurred.
2) Add more use cases to defray costs of development/implementation. As you mentioned in your piece, there are other uses for blockchain. In response to your question about what experiments Walmart should prioritize next, I see a compelling synergy in using blockchain to reduce paperwork on international freight, which would decrease cost [6] and complement the tracking of food items.
3) Engage and educate middle managers. While c-level executives were more optimistic about the benefits of blockchain, middle managers were much less so [6]. Rolling out blockchain at a meaningful scale would require a robust change management effort, and likely involve a longer process of educating middle managers on the benefits of blockchain and giving them opportunities to somehow try it for themselves.