Posts in Supply Chain Trends

The world’s most valuable resource is DATA

 

Source: The world’s most valuable resource is no longer oil, but data

A NEW commodity spawns a lucrative, fast-growing industry, prompting antitrust regulators to step in to restrain those who control its flow. A century ago, the resource in question was oil. Now similar concerns are being raised by the giants that deal in data, the oil of the digital era. These titans—Alphabet (Google’s parent company), Amazon, Apple, Facebook and Microsoft—look unstoppable. They are the five most valuable listed firms in the world. Their profits are surging: they collectively racked up over $25bn in net profit in the first quarter of 2017. Amazon captures half of all dollars spent online in America. Google and Facebook accounted for almost all the revenue growth in digital advertising in America last year.

Such dominance has prompted calls for the tech giants to be broken up, as Standard Oil was in the early 20th century. This newspaper has argued against such drastic action in the past. Size alone is not a crime. The giants’ success has benefited consumers. Few want to live without Google’s search engine, Amazon’s one-day delivery or Facebook’s newsfeed. Nor do these firms raise the alarm when standard antitrust tests are applied. Far from gouging consumers, many of their services are free (users pay, in effect, by handing over yet more data). Take account of offline rivals, and their market shares look less worrying. And the emergence of upstarts like Snapchat suggests that new entrants can still make waves.

But there is cause for concern. Internet companies’ control of data gives them enormous power. Old ways of thinking about competition, devised in the era of oil, look outdated in what has come to be called the “data economy”. A new approach is needed.

Quantity has a quality all its own

What has changed? Smartphones and the internet have made data abundant, ubiquitous and far more valuable. Whether you are going for a run, watching TV or even just sitting in traffic, virtually every activity creates a digital trace—more raw material for the data distilleries. As devices from watches to cars connect to the internet, the volume is increasing: some estimate that a self-driving car will generate 100 gigabytes per second. Meanwhile, artificial-intelligence (AI) techniques such as machine learning extract more value from data. Algorithms can predict when a customer is ready to buy, a jet-engine needs servicing or a person is at risk of a disease. Industrial giants such as GE and Siemens now sell themselves as data firms.

This abundance of data changes the nature of competition. Technology giants have always benefited from network effects: the more users Facebook signs up, the more attractive signing up becomes for others. With data there are extra network effects. By collecting more data, a firm has more scope to improve its products, which attracts more users, generating even more data, and so on. The more data Tesla gathers from its self-driving cars, the better it can make them at driving themselves—part of the reason the firm, which sold only 25,000 cars in the first quarter, is now worth more than GM, which sold 2.3m. Vast pools of data can thus act as protective moats.

Access to data also protects companies from rivals in another way. The case for being sanguine about competition in the tech industry rests on the potential for incumbents to be blindsided by a startup in a garage or an unexpected technological shift. But both are less likely in the data age. The giants’ surveillance systems span the entire economy: Google can see what people search for, Facebook what they share, Amazon what they buy. They own app stores and operating systems, and rent out computing power to startups. They have a “God’s eye view” of activities in their own markets and beyond. They can see when a new product or service gains traction, allowing them to copy it or simply buy the upstart before it becomes too great a threat. Many think Facebook’s $22bn purchase in 2014 of WhatsApp, a messaging app with fewer than 60 employees, falls into this category of “shoot-out acquisitions” that eliminate potential rivals. By providing barriers to entry and early-warning systems, data can stifle competition.

Who ya gonna call, trustbusters?

The nature of data makes the antitrust remedies of the past less useful. Breaking up a firm like Google into five Googlets would not stop network effects from reasserting themselves: in time, one of them would become dominant again. A radical rethink is required—and as the outlines of a new approach start to become apparent, two ideas stand out.

The first is that antitrust authorities need to move from the industrial era into the 21st century. When considering a merger, for example, they have traditionally used size to determine when to intervene. They now need to take into account the extent of firms’ data assets when assessing the impact of deals. The purchase price could also be a signal that an incumbent is buying a nascent threat. On these measures, Facebook’s willingness to pay so much for WhatsApp, which had no revenue to speak of, would have raised red flags. Trustbusters must also become more data-savvy in their analysis of market dynamics, for example by using simulations to hunt for algorithms colluding over prices or to determine how best to promote competition.

The second principle is to loosen the grip that providers of online services have over data and give more control to those who supply them. More transparency would help: companies could be forced to reveal to consumers what information they hold and how much money they make from it. Governments could encourage the emergence of new services by opening up more of their own data vaults or managing crucial parts of the data economy as public infrastructure, as India does with its digital-identity system, Aadhaar. They could also mandate the sharing of certain kinds of data, with users’ consent—an approach Europe is taking in financial services by requiring banks to make customers’ data accessible to third parties.

Rebooting antitrust for the information age will not be easy. It will entail new risks: more data sharing, for instance, could threaten privacy. But if governments don’t want a data economy dominated by a few giants, they will need to act soon.

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Blockchain Will Do to the Financial System What the Internet Did to Media

 

Source: The Blockchain Will Do to the Financial System What the Internet Did to Media

Even years into the deployment of the internet, many believed that it was still a fad. Of course, the internet has since become a major influence on our lives, from how we buy goods and services, to the ways we socialize with friends, to the Arab Spring, to the 2016 U.S. presidential election. Yet, in the 1990s, the mainstream press scoffed when Nicholas Negroponte predicted that most of us would soon be reading our news online rather than from a newspaper.

Fast forward two decades: Will we soon be seeing a similar impact from cryptocurrencies and blockchains? There are certainly many parallels. Like the internet, cryptocurrencies such as Bitcoin are driven by advances in core technologies along with a new, open architecture — the Bitcoin blockchain. Like the internet, this technology is designed to be decentralized, with “layers,” where each layer is defined by an interoperable open protocol on top of which companies, as well as individuals, can build products and services.

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Like the internet, in the early stages of development there are many competing technologies, so it’s important to specify which blockchain you’re talking about. And, like the internet, blockchain technology is strongest when everyone is using the same network, so in the future we might all be talking about “the” blockchain.

The internet and its layers took decades to develop, with each technical layer unlocking an explosion of creative and entrepreneurial activity. Early on, Ethernet standardized the way in which computers transmitted bits over wires, and companies such as 3Com were able to build empires on their network switching products. The TCP/IP protocol was used to address and control how packets of data were routed between computers. Cisco built products like network routers, capitalizing on that protocol, and by March 2000 Cisco was the most valuable company in the world. In 1989 Tim Berners-Lee developed HTTP, another open, permissionless protocol, and the web enabled businesses such as eBay, Google, and Amazon.

The Killer App for Blockchains

But here’s one major difference: The early internet was noncommercial, developed initially through defense funding and used primarily to connect research institutions and universities. It wasn’t designed to make money, but rather to develop the most robust and effective way to build a network. This initial lack of commercial players and interests was critical — it allowed the formation of a network architecture that shared resources in a way that would not have occurred in a market-driven system.

The “killer app” for the early internet was email; it’s what drove adoption and strengthened the network. Bitcoin is the killer app for the blockchain. Bitcoin drives adoption of its underlying blockchain, and its strong technical community and robust code review process make it the most secure and reliable of the various blockchains. Like email, it’s likely that some form of Bitcoin will persist. But the blockchain will also support a variety of other applications, including smart contracts, asset registries, and many new types of transactions that will go beyond financial and legal uses.

We might best understand Bitcoin as a microcosm of how a new, decentralized, and automated financial system could work. While its current capabilities are still limited (for example, there’s a low transaction volume when compared to conventional payment systems), it offers a compelling vision of a possible future because the code describes both a regulatory and an economic system. For example, transactions must satisfy certain rules before they can be accepted into the Bitcoin blockchain. Instead of writing rules and appointing a regulator to monitor for breaches, which is how the current financial system works, Bitcoin’s code sets the rules and the network checks for compliance. If a transaction breaks the rules (for example, if the digital signatures don’t tally), it is rejected by the network. Even Bitcoin’s “monetary policy” is written into its code: New money is issued every 10 minutes, and the supply is limited so there will only ever be 21 million Bitcoins, a hard money rule similar to the gold standard (i.e., a system in which the money supply is fixed to a commodity and not determined by government).

This is not to say the choices Bitcoin currently offers are perfect. In fact, many economists disagree with Bitcoin’s hard money rule, and lawyers argue that regulation through code alone is inflexible and doesn’t permit any role for useful discretion. What cannot be disputed, however, is that Bitcoin is real, and it works. People ascribe real economic value to Bitcoins. “Miners,” who maintain the Bitcoin blockchain, and “wallet providers,” who write the software people use to transact in Bitcoin, follow the rules without exception. Its blockchain has remained resilient to attack, and it supports a robust, if basic, payment system. This opportunity to extend the use of the blockchain to remake the financial system unnerves and enthralls in equal measure.

Too Much Too Soon?

Unfortunately, the exuberance of fintech investors is way ahead of the development of the technology. We’re often seeing so-called blockchains that are not really innovative, but instead are merely databases, which have existed for decades, calling themselves blockchains to jump on the buzzword bandwagon.

There were many “pre-internet” players, for example telecom operators and cable companies trying to provide interactive multimedia over their networks, but none could generate enough traction to create names that you would remember. We may be seeing a similar trend for blockchain technology. Currently, the landscape is a combination of incumbent financial institutions making incremental improvements and new startups building on top of rapidly changing infrastructure, hoping that the quicksand will harden before they run out of runway.

In the case of cryptocurrencies, we’re seeing far more aggressive investments of venture capital than we did for the internet during similar early stages of development. This excessive interest by investors and businesses makes cryptocurrencies fundamentally different from the internet because they haven’t had several decades of relative obscurity where noncommercial researchers could fiddle, experiment, iterate on, and rethink the architecture. This is one reason why the work that we’re doing at the Digital Currency Initiative at the MIT Media Lab is so important: It is one of the few places a substantial effort is being made to work on the technology and infrastructure clear of financial interests and motivations. This is critical.

The existing financial system is very complex at the moment, and that complexity creates risk. A new decentralized financial system made possible with cryptocurrencies could be much simpler by removing layers of intermediation. It could help insure against risk, and by moving money in different ways could open up the possibility for different types of financial products. Cryptocurrencies could open up the financial system to people who are currently excluded, lower barriers to entry, and enable greater competition. Regulators could remake the financial system by rethinking the best way to achieve policy goals, without diluting standards. We could also have an opportunity to reduce systemic risk: Like users, regulators suffer from opacity. Research shows that making the system more transparent reduces intermediation chains and costs to users of the financial system.

The Takeaway

The primary use and even the values of the people using new technologies and infrastructure tend to change drastically as these technologies mature. This will certainly be true for blockchain technology.

Bitcoin was first created as a response to the 2008 financial crisis. The originating community had a strong libertarian and antiestablishment spin that, in many ways, was similar to the free-software culture, with its strong anticommercial values. However, it is likely that, just as Linux is now embedded in almost every kind of commercial application or service, many of the ultimate use cases of the blockchain could become standard fare for established players like large companies, governments, and central banks.

Similarly, many view blockchain technology and fintech as merely a new technology for delivery — maybe something akin to CD-ROMs. In fact, it is more likely to do to the financial system and regulation what the internet has done to media companies and advertising firms. Such a fundamental restructuring of a core part of the economy is a big challenge to incumbent firms that make their living from it. Preparing for these changes means investing in research and experimentation. Those who do so will be well placed to thrive in the new, emerging financial system.

Future Trends in Sustainability Reporting

GRI and international think tank and strategic advisory firm SustainAbility have published the latest insights from the GRI Corporate Leadership Group on Reporting 2025 which explored four key trends fundamental to the UN Sustainable Development Goals: climate change, human rights, wealth inequality, and data and technology. The insights, captured in the report Future Trends in Sustainability Reporting provide practical guidance to reporting organizations working to respond to the risks and opportunities that we face on our path to a sustainable future.

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“The CLG Reporting 2025 was a dynamic group of thirteen forward looking companies motivated to uncover and understand emerging trends and improve disclosures,” said Eric Hespenheide, former GRI Interim Chief Executive. “The group engaged during meetings throughout the year, including with leading experts and stakeholder representatives, and shared their own experiences of reporting. The discussion about future reporting trends is vital to ensure that sustainability reporting has the most positive impact possible on sustainable development.”
The publication presents key information on each sustainability trend. Highlights from the report include:
Climate change: There was clear consensus in the group that it is not a matter of if business should or can act on climate change but how, and how fast they deliver change. Companies are solution providers: they are expected to be part of the solutions, from new energy models to efficiencies in the production and distribution of goods. Furthermore, clear and ambitious science-based targets are needed, and greater company and country engagement is expected following the Paris Agreement, with businesses expected to link to Intended Nationally Determined Contributions (INDCs).
Human rights: Expectations of corporate reporting on the many facets of human rights are growing: human rights due diligence is now the expected minimum. Investors, rating agencies and regulators are increasingly seeking this information. Key human rights issues set to receive greater focus include labor rights and issues linked to natural resources. The group highlighted that modern slavery is a new form of severe labor abuse and is leading to a broader movement from a focus on audit and compliance to due diligence and collaboration. Conflict over natural resource wealth is also becoming a more recognized issue with land rights increasingly disputed.
Wealth inequality: Various challenges for business related to wealth inequality were discussed, including radically increasing the share of value captured by workers and small-scale producers – for instance, achieving living wages for laborers and living incomes for small-scale producers. Eliminating economic gender inequality and gender discrimination is also becoming a key issue, as is tackling the race-to-the-bottom on public governance to attract investment. Calls to end the era of tax havens are increasingly expected, and breaking market concentration and addressing the unequal distribution of power will become imperative.
Data and Technology: When it comes to corporate reporting, data and technology are often seen as an opportunity and a challenge in equal measure. Challenges include securing sufficient internal buy-in; promoting the culture and creating awareness for good use of the internal systems that deliver high-quality, comparable data; lack of availability of sensitive and confidential data; and a need for more analytical tools to better understand data. Opportunities include online reporting; embedding sustainability data into targets and performance management systems; monitoring and providing feedback loops to data providers; and better understanding the dynamics and other demands on the data to improve the information channels and lower the burden for colleagues.
“SustainAbility is delighted to have partnered with GRI to deliver the Corporate Leadership Group (CLG) on Reporting 2025,” said Rob Cameron, Chief Executive, SustainAbility. “Corporate transparency and sustainability reporting are fundamental to the transition to a sustainable economy – allowing stakeholders to hold companies to account for poor performance, and to direct capital towards companies that are providing the innovation, solutions and scale of action needed to meet the 2030 Sustainable Development Goals (SDGs). We hope that the lessons we have learned will help more companies to make measurable and transparent progress in these critical areas.”

Internet of Things Revolutionizes the Wine & Spirits Industry

 

Source: Beverage Alcohol Gets a LOT Smarter | James Fellowes 

The adult beverage industry is transforming as the ‘Internet of Things’ revolutionizes everything from packaging to how we order drinks.

Smart technology is profoundly influencing the way people buy and consume things across every category, and the alcohol segment in no different. We can be sure that in the very near future it will be impossible to imagine how we functioned in a world of ‘dumb’ disconnected products. It has been reported by the World Economic Forum that the overall number of connected devices is expected to double within the next four years, from 22.9 billion in 2016 to 50.1 billion by 2020.

In this nascent era of connectivity, new devices help us buy our favorite products more efficiently and new packaging informs us about everything from terroir to tampering. Brands can utilize the data collected from smart systems to improve their products and tailor them to consumer tastes. With an eye on innovation and efficiency, smart technology developers are quickly revolutionizing the way we live – and drink.

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Smart On-Premise Devices

Two new products allow imbibers to replenish their drinks on-premise without waiting at the bar. Bacardi-owned Martini recently launched a new Smart Cube that communicates with bar staff when it’s time to pour another drink. The device is added to a customer’s drink like an ice cube and then monitors the drink level in real time. It also keeps track of how many drinks have been consumed to prevent over-serving.

Malibu recently introduced their ‘Coco-nect’ cups which allow consumers to place an order for a new drink by simply twisting the base of the cup. The cup sends the order to the bar while also pinpointing the customer’s location so that the drink can be delivered to them. Once the order has been received by a bartender, the bottom of the cup changes color to let the client know that their drink is on its way.

Iowa-based startup FliteBrite has created smart beer flight paddles that help drinkers keep track of which beer they’re trying. The device also connects to an interactive app that gives detailed information about each brew. While it doesn’t currently offer the option to order more beer, one imagines that this is the next step for devices such as the FliteBrite.

Tel Aviv-based startup Glassify have developed a line of ‘smart glasses’ embedded with an NFC chip that work with a smartphone app to offer consumers incentives like free chasers, happy hour specials or food combos. The app also hooks into a bank account, allowing customers to buy drinks for their friends or go out without their wallet. While it’s fun for consumers, the glasses could also be a boon for businesses interested in tracking specifics about their sales, from what time of day certain beers sell best to which brews are more likely to be drunk in sessions.

 

Several companies have introduced innovations to draught systems that provide businesses with helpful analytics. TAPP is a cloud-based battery-powered smart tap handle that can track beer sales in real-time and report the timestamped data back to beermakers. The system also has options for consumer interaction, either through their smartphones or through screens in the bars.

Indiana-based start-up SteadyServ offers a similar cloud-based system that helps outlets keep track of inventory, letting them know when something needs to be reordered or if a keg will need to be changed soon. The start-up’s technology uses electronic tags to identify each beer and puts a scale under each keg. The scale monitors beer levels, giving bars essential information about what is trending or what to run on special (for example, if a keg is getting old). Nevertheless, the exciting aspect for consumers is that SteadyServ integrates with social media, letting beer fans know what’s freshly on tap and what’s about to run out at their favorite pub.

European technology company WeissBeerger has created a similar smart bar system. With the goal of “turning drinks into data,” WeissBeerger offers an integrated Beverage Analytics Hub that connects with coordinating smart bar devices via cloud technology. From monitoring keg freshness and temperature controls to consumption data, the company helps businesses serve their customers more efficiently.

Smart Home Devices

Molson Coors has taken a page from Amazon’s book and launched a connected button that allows consumers to easily order more Carling beer in the UK. Similarly to the Amazon Dash button, the Carling Beer Button syncs with an accompanying smartphone app. When pressed, it adds Carling beer to an online shopping basket at one of four retailers, Tesco, Asda, Morrisons and Sainsbury’s.

Bud Light created a smart mini fridge for the California market which holds up to 78 beers. The branded connected appliance connects with an app via wifi to let consumers know when supplies are running low. The app is also programmable with user’s favorite sports teams, allowing them to receive updates when game day is approaching. The app integrates with the beer-delivery service Saucey, allowing users to order beer for delivery in Los Angeles, San Francisco and San Diego.

In Canada, The Bud-E Fridge is part of their Goal Lab range of smart offerings which also include the Goal Lamp Glasses.

http://budweiser.ca/goallab/en/

Smart Packaging

Pernod Ricard recently launched 45,000 NFC-enabled smart bottles for its Malibu coconut rum brand in the UK. Consumers can access digital content and experiences by tapping their NFC-enabled android phone on the bottle’s sunset image. Content includes instant-win competitions, user-generated content competitions, drink recipes, a bar locator service and a music playlist. The connected bottles are available exclusively through Tesco.

Several brands have utilized smart bottles that can be authenticated and tracked in order to combat the uptick of counterfeit wine and spirits. Ferngrove Wine Group, Johnnie Walker Blue Label and Barbadillo sherry have both turned to Thinfilm enhanced bottles that monitor whether a bottle has been opened and wirelessly communicates with a coordinating app. The Thinfilm carries tagged information with unique identifiers that allow brands to authenticate and track their products, even after the factory seal is broken. Thinfilm can also be used to communicate product information to consumers through their smartphones.

Medea Vodka created a fun party trick with their bluetooth enabled bottles with customizable LED message bands. The bottles can be programmed with a bespoke message that will scroll across the band. Messages are controlled through an app developed by the Medea team. The app knows which bottles are nearby and available to be registered. Once a bottle is registered to one phone it cannot be controlled by anyone else. The customizable bottles allow users to create their own messages for any social occasion.

What’s Next

As our belongings become more connected, we will develop the expectation that these devices will take care of our everyday chores. For instance, a refrigerator could be programmed to automatically reorder beer once supplies drop to a pre-programmed level.

Smart sensors and devices help us collect data and buy and sell more efficiently. What will we do with all of this data? The biggest boon coming from the ‘internet of things’ is the amount of intelligence we are gathering that will drive innovation and inspire new products and services.

Source: RADIUS

 

Get Beyond Tier 1 Suppliers to Engage with Labor Risks | Innovation Podcast

 

Source: Get beyond tier 1 suppliers to engage with labour risks | Innovation Forum

Smith, analyst with Ecovadis, talks with Innovation Forum’s Ian Welsh about how companies are now beginning to look for modern slavery and labor risks beyond their tier 1 suppliers. They discuss what supply chain mapping actually means in practice, and the systems that companies are developing to uncover where their risks are and how to target resources effectively.

Click Here to Listen

The Bitcoin Economy

As you see on this head-spinning graph below, the total amount of money in the world is $84 trillion. But that includes money in the bank. In physical coins and notes, the total global money supply is only $31 trillion. See the problem? Hence the rise of Bitcoin and other cryptocurrencies. Bitcoin is the cryptocurrency that refuses to die. Its demise has been predicted numerous times, and one expert calculated that its value is eighteen times more volatile than the U.S. dollar. Yet the virtual money keeps going from strength to strength.

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Last year, Bitcoin became more stable than gold, and earlier this year, the price of a Bitcoin surpassed that of an ounce of gold for the first time. Currently, all the bitcoin in the world is worth $41 billion. If that amount is hard to grasp, just think of it as one Larry Page – because $41 billion also happens to be the net worth of the guy who co-founded Google with Sergey Brin.

You’ll find both fortunes at the right side, and the lower end, of this graph, which gives you an idea of all the money in the world. You and I don’t figure on it unless you’re Larry Page. Or Bill Gates. The richest man in the world is worth $86 billion, or the net worth of Larry Page and Bitcoin combined – with enough change to buy the L.A. Lakers, the Toronto Maple Leafs, the Chicago Cubs and the Solomon Islands (not a sports team, but an entire country).

Bitcoin is the Uber of cryptocurrencies: the biggest, baddest and best-known, but not the only one. Add it up to Litecoin, Monero and all the others, and the total volume of virtual money floating around the internet, out of the reach of governments and banks, is a whopping $100 billion. That is about as much as the current GDP of Morocco – the 60th-largest economy in the world.

The monetary value of tech giants like Amazon ($402 billion) and (Apple $730 billion) is equivalent to the GDP of much bigger economies (Nigeria and the Netherlands, respectively). In fact, you would only need a little more than two Apples to equate the amount of actual money in dollar notes and coins in circulation around the world today – $1.5 trillion.

Money, of course, is fiduciary, which means it only has as much value as the trust we place in it. The same goes for gold: it derives its value solely from its rarity, combined with its desirability. The current world supply of mined gold is around 171,300 metric tonnes, which could be molded into a cube with sides of about 68 feet (20.7m). Its total value? Currently around $8.2 trillion. Or about 200 times the total value of Bitcoin (or Larry Page).

Just to give you an idea: unless you own at least $205 million (i.e. 1/200th of $41 billion), the monetary distance between the net value of Larry Page and the world’s entire supply of gold is smaller than the distance between Mr. Page’s fortune and your own. If your head is not spinning already, consider the amount of narrow money that is held in banks and wallets, under mattresses and in piggy-banks around the world: $31 trillion. ‘Narrow’ money is defined as physical money: the coins and notes that used to be the standard form of currency before the rise of more derivative forms of payment, such as checks and electronic forms of money.

‘Broad’ money also includes the deposits in easily accessible bank accounts that can be converted into cash relatively quickly. The sum of money under this definition is $83.6 trillion. You will have spotted a flaw in the system: if the amount of money that can be easily converted into cash is almost three times the volume of the actual worldwide supply of cash, we would have a problem if we would all want to empty our accounts at the same time. Or we could all buy shares. The total market value of publicly traded shares at stock exchanges around the world is $66.8 trillion. Not only is that a fabulously large amount of money, it is also subject to the laws of supply and demand, and highly fiduciary. A run towards or away from stocks would thoroughly deregulate the global economy, and nothing more dramatic than a minus sign in front of that amount would lead to the collapse of global civilization.

Does that sound overly dramatic? If the see-sawing rise of Bitcoin tells us anything, it is that people are losing their trust in money, and other traditional measures of wealth. Let’s talk again when the total value of all cryptocurrencies surpasses that of the world’s supply of gold…

Source: The Bitcoin Economy, in Perspective