opportunities ahead - chalmers€¦ · opportunities ahead: megatrends and their potential impacts...
TRANSCRIPT
OPPORTUNITIES AHEAD: MEGATRENDS
AND THEIR POTENTIAL IMPACTS
PROF. DR. J. ROD FRANKLIN, P.E.
DEAN OF PROGRAMS
ACADEMIC DIRECTOR, EXECUTIVE EDUCATION
KUEHNE LOGISTICS UNIVERSITY
GROSSER GRASBROOK 17
D-20457 HAMBURG
GERMANY
+49 40 328 707 231
AGENDA
The changing world – an introduction of things to come
The world in 2050
Economic power
The environment
Energy
Demographics
Technology
Summary and questions
AGENDA
The changing world – an introduction of things to come
The world in 2050
Economic power
The environment
Energy
Demographics
Technology
Summary and questions
THE RELAXATION OF TRADE BARRIERS AND THE DECLINE OF
ABSOLUTISM HAVE DRIVEN AN UNPRECEDENTED EXPANSION OF
TRADE …
4
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
20000
Billions of U
S $
s
Year
World Trade in Merchandise - Exports
… AND ECONOMIC GROWTH
5
0
10000
20000
30000
40000
50000
60000
70000
80000
1960
1961
1962
196
3
1964
1965
1966
196
7
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
198
2
1983
1984
1985
198
6
1987
1988
1989
199
0
1991
1992
1993
199
4
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Billions of U
S $
s
Year
World GDP - Constant 2005 USD
AGENDA
The changing world – an introduction of things to come
The world in 2050
Economic power
The environment
Energy
Demographics
Technology
Summary and questions
Shifting Economic Power The increase in the economic power of the BRIC
countries will change trade patterns from East to
West to South to South and North to South
Environmental changes will manifest themselves in
water scarcity, hunger, coastal flooding and extreme
weather conditionsGlobal Warming
Energy Volatility of fuel prices, along with scarcity will
manifest itself in high prices for carbon based power
while alternatives will have a limited impact
Demographics Changing populations characteristics will drive trade in
different directions as requirements and needs change
Trends Potential Outcomes
DRIVING THE CHANGING STRUCTURE OF WORLD POWER ARE
FIVE MEGA-TRENDS
Technology Smart infrastructures, autonomous vehicle
operations, shared resources, robotics and new
business models may enable logistics operations to
at last become “sustainable”
AGENDA
The changing world – an introduction of things to come
The world in 2050
Economic power
The environment
Energy
Demographics
Technology
Summary and questions
BY 2050 CHINA WILL HAVE BECOME THE WORLD’S LEADING
ECONOMY WITH INDIA SURPASSING EUROPE
10
WHILE THE BRIC COUNTRIES OF CHINA AND INDIA WILL
SURPASS THE WEST IN GDP, MUCH OF THIS EFFECT WILL BE THE
RESULT OF GROWING POPULATIONS…
11
Real GDP Growth Breakdown
Source: PWC Estimates
…AND NOT DUE TO THE CONVERGENCE OF PER CAPITA
INCOME
12
GDP per Capita in PPP
Source: PWC Estimates
CHANGES IN THE ECONOMIC STRENGTH AND TRADING
PATTERNS OF COUNTRIES WILL HAVE A SIGNIFICANT IMPACT
ON GLOBAL POLITICS AS WELL
14
Country Regional Political Influence - 2050
Legend – Similar colors and their intensity indicate strength of political influence/power
Source: US National Intelligence Agency
AGENDA
The changing world – an introduction of things to come
The world in 2050
Economic power
The environment
Energy
Demographics
Technology
Summary and questions
Sustainable
Develop-ment*
Weather
Extremes
Food**
Ecosys-
tems
1º C 2º C 3º C 4º C 5º C0º C
Most of world’s coral reefs bleached
A quarter of species lost from current range
Most of tundra, half boreal forest disappear
A third of species lost from current range
Most mountain glaciers disappear
Widespread species extinction
Risk of hunger at lower latitudes Risk of hunger at higher latitudes
Risk of coastal flooding Risk to human health
A billion humans water stressed Out-migration in many regions
Many regions untenable without adaptation
Further increase in fire, drought, and storms
Rapid increase in heat waves
Increase in droughts, heat waves, severe storms
Large Scale
Singular
Events
Deglaciation in Greenland and disintegration of
Western Antarctic IcesheetWeakening/shutdown of ‘’Great Ocean Conveyor’’
Increase in production potential at higher latitudes
* Water stress, human health, flooding
** Changes in production potential
Source: IPCC
Italics: Medium confidence
Non italics: High confidence
SCIENTISTS NOW PREDICT THAT BY 2050 AVERAGE GLOBAL
TEMPERATURES WILL HAVE RISEN BY UP TO 3O
C
SUCH AN INCREASE IN GLOBAL TEMPERATURES WILL HAVE A
LARGE IMPACT ON MANY AREAS OF THE WORLD
17
EXTREME WEATHER EVENTS ARE ALSO PREDICTED TO INCREASE
RAISING THE RISK OF TRANSPORTING GOODS OVER LONG
DISTANCES
18
WHILE THERE ARE STILL MANY THINGS THAT COULD BE DONE
TO MITIGATE THE EFFECTS OF GLOBAL WARMING, GAME
THEORY WOULD INDICATE THAT INDUSTRY WON’T CHANGE…
0 1 10 11 12
-110
-120
-130
-140
-150
-160
-20
-30
-40
-50
-60
-70
-80
-90
2221202 191817 2516151413 24 26 273 4 5 6 7 8 9
0
10
20
30
40
-10 23
-100
Cost of abatement
EUR/tCO2e
Insulation improvements
Fuel efficient
commercial
vehicles
Lighting systems
Air Conditioning
Water heatingFuel efficient vehicles
Sugarcane
biofuel
Nuclear
Livestock/
soils
Forestation
Industrial
non-CO2
CCS EOR;
New coal
Industrial
feedstock substitution
Wind;
low
pen.
Forestation
Cellulose
ethanol CCS;
new coal
Soil
Avoided
deforestation
America
Industrial motor
systems
Coal-to-
gas shiftCCS;
coal
retrofitWaste
Industrial
CCS
Abatement
GtCO2e/year
Avoid
deforesta
-tion Asia
Stand-by losses
Co-firing
biomass
Smart transit
Small hydro
Industrial non-CO2
Airplane efficiency
Solar
Global cost curve of GHG abatement
550
ppm500
ppm
Abatement needed:
(GtCO2e)
25 - 35 ~ 40Marginal cost:
(EUR/tCO2e)
~ 30~ 20
EUR 20 - 30/CO2e could keep the
world moderately warm
. . .WHICH MEANS THAT GOVERNMENTS MAY BE FORCED TO
STEP IN TO CONTROL EMISSIONS
Volume of
abatement
Gt CO2e/
year
Cost of abatement
EUR/t CO2e
• In principle poli-
cy making can
specify either
• An emission
volume target
• An emission
price target
• Policy cannot
specify both
• One is set
by policy
• The other one
is set by the
market
Price-based targets
By setting a price (e.g., through a
tax) policy makers stimulate
demand for CO2 abatement
Volume-based targets
By setting an emission
reduction target, policy
makers are directly
creating demand for
CO2 abatement
Source: McKinsey
AGENDA
The changing world – an introduction of things to come
The world in 2050
Economic power
The environment
Energy
Demographics
Technology
Summary and questions
OIL PRICES HAVE CONTINUED TO VARY WILDLY MOVING IN
COUNTER INTUITIVE AND HIGHLY UNPREDICTABLE WAYS SINCE
THE EARLY PART OF THIS CENTURY
22
Source: EIA Data
PRICE VOLATILITY IS DRIVEN BY POLITICAL INSTABILITY IN
PRODUCING COUNTRIES AS WELL AS FINANCIAL MARKET
INSTABILITY
23
RENEWABLES MIGHT HAVE THE POTENTIAL TO OFFSET OUR
DEPENDENCE ON CARBON BASED ENERGY, BUT…
24
…DEMAND WILL BE SO LARGE IN 2050 THAT TRADITIONAL
SOURCES WILL STILL NEED TO BE RELIED ON FOR THE
MAJORITY OF USES
25
AGENDA
The changing world – an introduction of things to come
The world in 2050
Economic power
The environment
Energy
Demographics
Technology
Summary and questions
WHILE TRADE HAS INCREASED THE WELFARE OF INDIVIDUALS,
GROWTH IN POPULATIONS, AND DEMOGRAPHIC CHANGES ARE
DRIVING THE REAL POWER STRUCTURE OF THE WORLD
WITH “FIRST WORLD” COUNTRIES AGING AND DECLINING IN
POPULATION, THE POLITICAL AND MARKET POWER OF THE
WORLD WILL DRAMATICALLY CHANGE
AGING POPULATIONS WILL FACE LABOR COST INCREASES AS
YOUNG WORKERS DISAPPEAR CAUSING SOME WESTERN
COUNTRIES TO BECOME LESS COMPETITIVE…
29
…AND THESE COUNTRIES WILL FACE A DECREASING QUALITY OF
LIFE AS FEWER WAGE EARNERS ARE FORCED TO SUPPORT
ELDERLY RETIREES
30
AGENDA
The changing world – an introduction of things to come
The world in 2050
Economic power
The environment
Energy
Demographics
Technology
Summary and questions
THE IMPACT OF THESE GLOBAL TRENDS CAN BE SEEN IN THE
LANDSCAPE OF NEW INNOVATIONS BEING INJECTED INTO THE
TRANSPORT AND LOGISTICS DOMAIN
32
Automation
• Aging populations, unattractive work, cost
pressures, velocity requirements, volumes all are
driving a push to logistics automation
Autonomy• Smart infrastructures, scarce labor, regulations,
costs, asset utilization, etc. are driving the
development of autonomous logistics tools
Information• IoT devices, instrumented infrastructures, M2M
communications, V2V communications are all
creating more information logistics operators
Integration• Scale and scope economies, standards,
regulation, environmental requirements are all
driving logistics operators to integrate activities
Collaboration• Regulations, integration, information, autonomy
and automation are costly and will require
industry players to collaborate in their operations
and business models
T&L Trends Market Drivers
AGENDA
Technology
Automation
Autonomy
Information
Integration
Collaboration
THE NEED TO INCREASE VELOCITY, LOWER UNIT COSTS, AND
ADDRESS WORKFORCE SCARCITY ISSUES IS DRIVING NEW
FORMS OF AUTOMATION
• Automated Guided Vehicles
• Robotics
• Automated material handling
systems
• Automated storage and
retrieval systems
• Automated packaging
systems
• Conveyors
• Sortation systems
• Loading/unloading systems
• Etc.
34
AGENDA
Technology
Automation
Autonomy
Information
Integration
Collaboration
AUTONOMOUS OPERATIONS OF LOGISTICS ASSETS IS
BECOMING A REALITY
36
• Autonomous vehicle
development is moving forward
quickly due to Google’s efforts
• Truck platooning software is
improving increasing the
opportunity for improvements in
truck operating efficiencies
• Autonomy is not being limited
to land based operations
• Ships and airplanes operate today
using autopilot technologies that
all but eliminate the need for pilots
• Humans are operating as tenders
for the technology
• Smart infrastructures are
supporting the rapid evolution
of autonomous vehicle
operations
REMOVING THE HUMAN ELEMENT FROM VEHICLE OPERATION
ALSO PROMISES TO LOWER CONGESTION AND INCREASE
SAFETY
For the past hundred years, innovation within the
automotive sector has created safer, cleaner, and
more affordable vehicles, but progress has been
incremental. The industry now appears close to
substantial change, engendered by autonomous, or
"self-driving," vehicle technologies. This technology
offers the possibility of significant benefits to social
welfare — saving lives; reducing crashes,
congestion, fuel consumption, and pollution;
increasing mobility for the disabled; and ultimately
improving land use. This report is intended as a
guide for state and federal policymakers on the
many issues that this technology raises. After
surveying the advantages and disadvantages of the
technology, RAND researchers determined that the
benefits of the technology likely outweigh the
disadvantages. However, many of the benefits will
accrue to parties other than the technology's
purchasers. These positive externalities may justify
some form of subsidy. The report also explores
policy issues, communications, regulation and
standards, and liability issues raised by the
technology; and concludes with some tentative
guidance for policymakers, guided largely by the
principle that the technology should be allowed and
perhaps encouraged when it is superior to an
average human driver.
37
• Automated Vehicle Technology Offers Several Benefits
• Without driver error, fewer vehicle crashes will result.
• The mobility of the young, the elderly, and the disabled will be
increased.
• Traffic flow could be more efficient and congestion decreased.
• Vehicle occupants could spend travel time engaged in other
activities, so the costs of travel time and congestion are reduced.
• Fuel efficiency can be increased and alternative energy sources
facilitated.
• Because such vehicles won't need proximate urban parking, space
used for parking could be repurposed.
• There Are Possible Drawbacks
• Because the technology would decrease the cost of driving,
congestion might increase, rather than decrease.
• Occupations and economies based on public transit, crash repair,
and automobile insurance might suffer as the technology makes
certain aspects of these occupations obsolete.
• Policy Implications Include Liability and Regulation Issues
• Manufacturer liability is likely to increase while personal liability is
likely to decrease. If a vehicle and a human share driving
responsibility, the insurance issues could become more
complicated. A variety of solutions exist if this poses a problem.
• Inconsistent state regulation poses a risk — if 50 states have 50
different regulations, it would be difficult for manufacturers to
match them all; likewise, vehicle owners might not be able to
travel outside their state of residence.
• Because many of the benefits of autonomous vehicle technology
accrue to those other than the purchaser, subsidies or taxes may
be necessary in order to maximize social welfare by equalizing the
public and private costs and benefits.
Source: Autonomous Vehicle Technology, RAND Corporation
AGENDA
Technology
Automation
Autonomy
Information
Integration
Collaboration
THE AMOUNT OF DATA THAT IS BEING STORED IN VARIOUS
MEDIA HAS BEEN GROWING EXPONENTIALLY SINCE THE TURN
OF THE CENTURY
39
BIG DATA RESULTS FROM THE INCREASED USE OF THE
INTERNET TO BUY, INTERACT WITH, REPORT ON, MONITOR,
VISUALIZE AND STORE THINGS
• The majority of data generated
today is the result of electronic
image creation, video
streaming, surveillance images,
blogs, email, online catalogues,
etc.
• Autonomous data sources (i.e.,
the Internet of Things), such as
autoID tagged items,
automobiles, mobile telephones,
webcams and sensor networks
are also adding to the electronic
data that is generated
• All of these sources of data
create vast amounts of
unstructured and difficult to
process data that form what
industry calls “Big Data”
40
FOR LOGISTICS COMPANIES, VALUE FROM DATA ARISES IN
FOUR PRIMARY AREAS
41
Strategic Direction
Operational Improvement
Improved Customer Service
New Business Opportunities
Big Data Value Dimensions for Logistics Service Providers
Better information on markets, political
situations, goods flows, etc. allow LSPs to
anticipate where they should be investing
and developing new goods and services
Real time information on goods flows,
traffic, customer demands, weather, and
resources can assist LSPs in optimizing
routes, asset utilization and resource use
Multiple touch points with customers, shippers,
suppliers and regulators allow LSPs to gather
data on sentiments and needs creating
opportunities to better serve stakeholders
Aggregation of data on goods flows by locale,
region, and lane and integrating these data with
macroeconomic data, environmental data, etc.
allows LSPs to create new business
opportunities
Data Collection and StorageData Analysis and
Refining
Operational
Improvement and
New Business
AGENDA
Technology
Automation
Autonomy
Information
Integration
Collaboration
THE DISAGGREGATED NATURE OF THE T&L INDUSTRY TODAY
LEADS TO INEFFICIENT OPERATIONS AND UNNECESSARY
EXPENSE
43
• End-to-end visibility does not
exist
• Quality of shipping process is
not controllable
• Assurance of deliveries is
problematic
• Costs are not transparent
• Border crossings are
problematic
• Vendor quality, reliability,
capability, etc. is difficult to
ascertain
• Risk management is not uniform
• Information sharing is difficult
• Collaboration does not exist
EFFICIENCY THROUGH SCALE AND SCOPE, HOWEVER, ONLY
WORKS IN CLOSED NETWORKS, WHICH DON’T REPRESENT
GLOBAL LOGISTICS OPERATIONS
44
NEW TECHNOLOGIES, SUCH AS CLOUD COMPUTING AND IOT,
ARE MAKING IT EASIER FOR LOGISTICS OPERATORS TO
LOGICALLY INTEGRATE WITH ONE ANOTHER
45
UNFORTUNATELY, MANAGEMENT IN THE INDUSTRY HAS SOME
DISTANCE TO GO BEFORE THEY EMBRACE THE IDEAS OF TRUE
INTEGRATION AND COLLABORATION
46
AGENDA
Technology
Automation
Autonomy
Information
Integration
Collaboration
INDUSTRY’S CURRENT FOCUS HAS BEEN ON HOW IT CAN
IMPROVE CURRENT OPERATIONS, NOT ON WHETHER IT NEEDS
AN ENTIRELY DIFFERENT APPROACH
48
HOWEVER, WHAT IS ACTUALLY NEEDED IS AN ENTIRELY
DIFFERENT APPROACH IF TRUE IMPROVEMENT IS TO BE
REALIZED
• Why are we all optimizing our small piece of the pie and not the pie itself?
• Why are we operating like technology is there to make what we do more
efficient and not something that could change the industry?
• Why do we believe that in the future transport vehicles will be operated as
they are today?
• Why do we ignore advances in smart infrastructures that result in
dramatically different uses of the infrastructure?
• Why do we believe that our current logistics and transport models are
appropriate for megacities?
• Why are we concerned about owning assets that become obsolete more
rapidly than ever?
• Why are we seeking answers concerning the future by looking in
the rear view mirror?
49
AGENDA
The changing world – an introduction of things to come
The world in 2050
Economic power
The environment
Energy
Demographics
Technology
Summary and questions
THE WORLD IS GETTING MORE AND MORE COMPLEX CREATING A
PERFECT STORM FOR GLOBAL ORGANIZATIONS
THE CHANGES OCCURRING IN OUR WORLD ENSURE THAT
NO MATTER WHAT WE ARE DOING TODAY, OPERATIONS
TOMORROW WILL DEFINITELY NEED TO BE DIFFERENT
Global change is an important topic
for all of us
Global operations and changing
market pressures are challenging
current “taken for granted” models
New thoughts and ideas are
needed to allow industry to move
beyond where it is today
If we do not take action ourselves
governments and non-traditional
competitors will make decisions for
us
If we don’t act soon, irreversible
damage may occur
Creative new approaches, e.g., the
Physical Internet will be required to
achieve the goals needed
It is truly time to “go where no man
has gone before”
THANK YOU FOR YOUR TIME
As long as I live, I'll hear waterfalls and birds and winds sing. I'll interpret the rocks, learn the
language of flood, storm, and the avalanche. I'll acquaint myself with the glaciers and wild
gardens, and get as near the heart of the world as I can.
John Muir
Thank you for your attention!
Prof. Dr. J. Rod Franklin
Kühne Logistics University
+49 40 328 707 231