Many articles have been written in the last weeks about the horrific impact of COVID-19 on our society, businesses and governments. Understandably, the media has focused on reports of struggling health services, ailing stock markets and the previously unimaginable effects on our daily lives. As a highly concerned and engaged citizen, I fully appreciate the reasons for this focus. As an innovation leader, I hope to open a discussion on the potential opportunities that events like these can offer our communities.
There is no doubt that globalisation drives political, economic and societal wealth. Through economic prosperity everything seems possible and we’re now in a situation where globalisation seems limitless. Concerns about natural resources don’t always affect our choices and we struggle to see or prefer not to see, the negative impact of our behaviour.
Movements such as Fridays for Future made these links even more prominent in social and political debate. Then COVID-19 has finally woke us up. The vast majority of us have reduced our private and business travels. Many of us are working from home and for most of us, the process has been relatively straightforward and manageable.
Thinking local in a globalised world
To put some meat on the bone I want to offer three examples from my own experience where the pandemic made me realise that embracing more local elements in a globalized world will have lots of benefits for us without cutting down the achievements of our globalised world – the concept of glocalisation.
1. The globalisation of value chains has been pushed to the extreme over the last few decades. We have optimised these value chains purely on KPIs like profit but sometimes at the expense of long term KPIs such as sustainability and security. The reasons for this counterintuitivity can be explained by the simple example of product development. If you are a product developer you will always ensure that the most important parts of your product’s value chain have some redundancy built into it. You need to make sure that a plane can still fly with only one engine working or that your data is secured with offsite duplications in case the data storage centre experiences disruptions. Most data systems are planned with redundancies in 2N or N+1 configurations. In other words, we need to adjust our current “Just in Time” attitude with a “Just in Case” mindset. By reducing the dependency on global value chains at system critical points for society (for example, health equipment) or companies (critical parts) we will be able to boost local development, strengthen our economy and reduce the need for non-essential travel.
2. Societal globalisation was slower than the economic globalisation. By this I mean that economic globalisation moved too fast for people to react to it in a constructive way. As a result, communities tried to solve modern challenges created by economic globalisation with very outdated measures. How else can we rationally explain the need for people to travel around the globe for a one-hour meeting? The current crisis makes it clear that many of these journeys simply weren’t necessary. Let me use myself as an example. In the last year, I travelled on 20 or so national and international flights. If I had halved those journeys and invested the money in better IT equipment I would now be conducting state-of-the-art video conferences from my home using a top range video camera, sitting on a comfortable chair, listening through great headphones. Instead I am writing this on a flimsy kitchen chair and will have a substandard-quality phone conference later with lousy headphones.
3. Over the decades we’ve failed to see that the negative impact we have on our environment is a direct result of globalisation. As long as something makes economical sense (supply, demand, achieving our goals) we should do it, right? A raft of positive environmental movements across the globe have forced us to reflect on, and confront, this. We need to question whether our food supplies need to be grown, packed and sold in entirely different parts of the planet. This crisis should be a catalyst for doing so.
Sustainable incentives foster local development
Let’s look at the relative CO2 emissions of the products we consume. If the global value chains producing tons of CO2 are obliged to pay for their emissions it could render their supply chain uneconomical and a significant challenge to maintain. If the CO2 price is high enough companies have sufficient incentives to change the value chains and local economies should enjoy a more prominent role in global markets.
Don’t get me wrong. I love that this planet is open and I miss meeting people in person. But I am a believer that every crisis should make us reflect on how we got here. By exploring the role that innovation can play in a glocalised world and seeking out ways to empower communities, we can work together to bring about meaningful change. My team and I at E.ON Innovation are committed to identifying those turning points and driving the innovations that truly matter.
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