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Major changes in global logistics shaping the world: Mika Aaltonen

The human species crossed the threshold becoming a new kind of animal, sometime during 2008. An urban creature, geographically divorced from the natural world that still continues to feed and fuel us. For the first time ever, we have more people living in cities than out on the land. Also, for the first time, most of us have no substantive ability to feed or water ourselves. We have become reliant on technology, trade, and commerce to carry out our most primitive functions.

The world’s rural population peaked somewhere around 3,5 billion in 2019. Most of the rural depopulation is taking place in the developing world. The reason for this migration is that people can make money in town. There is no demand for farm labour anywhere in the world.

This means that opportunities to remedy environmental degradation may increase, both from new urban technologies, and relieving the burdens of human occupation in the country. This effect could be very profound, ushering in an entirely new type of economic marketplace, and we can expect new products will emerge from the demand to make cities more livable.

This development points to a world increasingly regionalized.

Global trend of regionalization

In a world of megacities, growing alongside the remarkable economies in the Far East, it is unlikely that these regions buy goods and services from developed nations.

To believe that the present patterns in world trade will continue, is denying the obvious development of the global economic situation.

The enormous increase in the world population will be centered on 33 megacities. This leads to the creation of “mega-hubs”, which compete for access to hinterland markets. The “spokes” of the hubs — with direct access to the consumer markets — will create the competitive edge.

The trend puts on the first seat any technology or infrastructure that allows access to the consumer. In the meantime, all long-distance logistics costs are held relatively equal by a mega-hub system. For all of the ink spilled on the rise of global logistics, especially shipping, the less obvious but more important trend in transport may be regional.

Global trade, ultimately, is about local consumption.

Winners of current trends

In such a world, competitive strategies favour entrepôt enterprises, which become intermediary magnets to attract the distant “long-trade”. Such as Singapore, where arbitrary geographical location is leveraged by legal and tax arrangements.

Real estate reaches a new level of importance, as new hubs and spokes will be created, along the requirements for new technologies. Old ports may prove more expensive to upgrade than establishing new ports and hubs. Future hubs are likely to be where today’s ports are not. And where tomorrow’s population is a sign of new consumers.

If the trend continues to be in consumer goods, then we should expect that both downstream and upstream, ports of origin and destination will change as the developing economies mature, their populations increase, and markets grow.

Mika Aaltonen, Ph.D. (Econ.), Associate Professor (Foresight & Complexity), Co-founder PORT 2.0, Chairman Sustainable Nation Group

Gain the competitive advantage with the insights of changes in the logistics and flow of goods. Read the whole White Paper here: Brave New World: Transformations in Transport, and Consequences They Entail

The writer Mika Aaltonen is a Ph.D. (Econ.), Associate Professor (Foresight and Complexity), Founder of the Royal Society of Arts Helsinki Chapter, Editorial Board Member of European Foresight Journal, Editorial Board Member of E:CO (Emergence: Complexity and Organisations journal).

He has written 16 books with some of the best experts and for some of the most prestigious organisations in the world, and over 100 articles about foresight, decision-making and societal change.

Mika has worked as visiting researcher at the London School of Economics (UK), the Conservatoire National des Arts et Métiers (France) and the Gregorian University (Italy).

Mika Aaltonen gives a keynote on the topic in the SCIC LIVE Seminar on 6th of June, at Tampere Smart City Expo & Conference.


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