Posts Tagged ‘globalization’

Localism and Global Gridlock

October 16th, 2009 by Chris Gbekorbu

"Gridlock" by cle0patra

While proponents of localism (i.e., buying as much of our food from local farmers) suggest that this approach is more environmentally sustainable and supports community growth, one of the advantages of globalization and global trade is that it allows us to get things that we can’t produce locally 1 But as George Stalk suggests in “The Threat of Global Gridlock,” we are facing an infrastructure crisis that could make producing (and ultimately consuming) global goods and services more costly.

Stalk notes that while transportation capacity has grown in certain areas, capacity hasn’t kept pace with the growth in demand. This, he suggests, combined with the possibility of rising fuel costs could not only add significantly to transportation costs, but also increase production delays and lead to inefficient production cycles as the arrival of inputs may become less predictable. All of this suggests that costs will only increase and that profits will decline.

One of the recommendations that Stalk makes is that companies should look at sourcing their products closer to home and moving to reduce the length of the value chain (i.e., they should begin to practice greater “localism”). He notes that while this may increase production costs, this will likely be offset by the lowered logistics costs.

While noting that we are facing a transportation capacity crisis is prescient and I welcome shortening the value chain from both economic and environmental standpoints, in the not too distant future, companies could face an even greater challenge in the form of 3D printers. Although the technology is still in its infancy, the number of materials that can be printed and the quality of the reproductions is increasing at a steady pace. When you can print your own furniture or other appliances, for example, all you really need is the material inputs and the design (which you can get from the Web)—there’s little need to have a product manufactured in across the country (or in different countries) and then shipped to you.

Although it’s very unlikely that we’ll see 3D printing displace traditional manufacturers in the next 10-20 years, with the transportation capacity crisis and 3D printing, we can see the emergence of a trend towards greater localism and having more of our goods produced at a local level rather than a global one—and this could make for a more sustainable future.

  1. For instance, you can’t grow pineapple in central Canada, and most countries depend on oil imports from a few key countries.