Industrial balance and strategic repatriation
What if instead of manufacturing on the other side of the world we do it closer and reduce the impact of transport on pollution. What if companies create brands and designs, but have local factories or license production to local manufacturers.
We all know that in life it is not easy to find balance, although it is essential to do so. When I think about technology, situations come to mind such as finding the balance between business and infrastructure requirements is difficult. Choosing is not simple, but if we do not do it well, if we allow ourselves to be carried away by pressures and emergencies, your organization may find itself with an increase in technical debt and with the consequent mortgage of its future agility.
The same is true of the balance between where most of the goods we consume are made or with the industries that our governments consider strategic. We cannot get carried away by pressures, emergencies and short-term visions.
The pandemic that we have experienced has only accentuated an unstoppable trend and, at the same time, has made us realize the serious imbalances that exist. The unstoppable trend is what gives its name to this column, the convergence of digital transformation and the search for a more responsible and sustainable society model; many times identified with the circular economy. Among the serious imbalances is the lack of leading companies in several sectors that are critical to our survival during the worst moments of the health crisis, but also in other sectors that are critical to our economic recovery, something fundamental for the reconstruction of our society.
If we analyze everything as a whole we will see that there are companies that were going like a shot that suddenly need public aid to stay afloat because no one can survive a supply and demand crisis without a brutal financial muscle. We are in a situation where the manufacture of many things has to be repatriated. There are products in which the zero kilometer makes sense, but there are others in which we will have to "settle" for it being produced in the European Union.
I think we must rethink the formula we use to calculate the value of the things we consume, we must include variables such as the carbon footprint, the working conditions of all those involved in the process, the means of transport with which it has reached our hands ... It is not admissible that products with a negligible production cost, come from the other side of the world filling the planet with plastic, for example.
The point is that this new calculation of value requires production companies to improve their processes and competitiveness and to transform their production models. We have been talking about Industry 4.0 for some time, the effect of cobots, automation, artificial intelligence, edge computing, augmented reality, the industrial internet of things…; but we see that there are some super leading factories and many that have not yet been modernized. It is urgent to accelerate to locate production in our continent. A fact for those who are afraid that change will destroy jobs, the European Commission estimates that the application of the circular economy in the European Union will create 700,000 jobs and increase GDP by an additional 0.5% between now and 2030. Logically , many of these jobs will be different, what we have to do is train and recycle our workforce.
At this point, I want us to broaden our sights and be very ambitious, otherwise we will end up being a vacation continent. I want our children and all future generations of Europeans to have a bright future and that requires us to be leaders in strategic sectors. On Friday they asked me for my opinion on what is happening with Facebook in Australia, they asked me if Facebook, Google and the rest have accumulated too much power. The answer is quite obvious, but I turned it around and asked them how we got to a situation where we don't have great European champions. I totally agree to promote the world of entrepreneurship. It is essential to nurture the business ecosystem from below, but it is also essential to accompany companies in their growth. We must climb the best to be world benchmarks.
This image is just one example of how Europe is skipping the train of key industries for the future. We must not forget that having these industries, creating them, requires a long-term vision, with broad-minded leaders who do not only think about the duration of their mandate. If we analyze it coldly, we will see that our mouths fill up talking about the electric car, putting an expiration date on the combustion engine, but we do not lay the necessary foundations to lead that industry.
In the world right now there is a great concern for the design and manufacture of semiconductors, batteries ... and many more basic parts to have a successful future. We cannot depend on manufacturers and manufacturing from outside, we have to be more ambitious and much more agile to make up for lost time. It is clear that building a factory, like transforming it radically, is not achieved in two days. But it is also clear that in Europe we have a lot of talent and that we must take advantage of it, instead of exporting it to geographical areas with strategic vision. We have many Wallboxes, many Valencian Battery Alliance and many potential Power Electronic; We "just" have to make them grow!
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Originally published at Disruptores e Innovadores https://www.elespanol.com/invertia/disruptores-innovadores/opinion/20210223/equilibrio-industrial-repatriacion-estrategica/560823919_13.html