Why Traditional Farming Is Here to Stay

by Kit Worzel, futurist

Last year, I wrote a blog about the future of food, and how we would need to use a number of alternative methods to farming in order to feed everyone. I didn’t manage to fit the rest of the information in that blog, about how we would still need to farm and grow food to feed a population of more than 9 billion. You’ll note I didn’t say “use traditional farming methods” there, because we will actually be using modern and futuristic methods instead.

Farmers in glass houses

Industrial greenhouse usage is fifty years old now, and only set to expand. As prices rise on produce due to water shortages and climate change, more people are turning to greenhouses to grow their plants. They’re not exposed to the wind, and can be climate controlled, to a degree. Water is kept in as part of a closed system, rather than allowed to run off or evaporate away, and they also have the advantage of being able to grow plants in otherwise harsh environments, such as deserts, assuming you can secure a water supply. As a matter of fact, if you combine solar farms and greenhouses en mass, you have quite the set-up, turning otherwise unusable land into profitable enterprises. So long as a water supply can be arranged, even hard, rocky soil can be home to delicate plants – in the raised beds of greenhouses.

Pretty in pink

The level beyond greenhouses are pinkhouses, retrofitted warehouses and buildings that don’t even need windows, and light the plants with red and blue LEDs, the wavelengths that plants absorb best. While there is a sharp cost up front to buy the property and lights, the increase in efficiency is enormous. Plants grow almost twice as well under these coloured lights rather than the broad spectrum light from the sun, and with complete climate control, it is possible to set up pinkhouses anywhere there is power, from Siberia to the Sahara. Rather than be at the mercy of the growing season, and produce at most two crops a year, pinkhouses can manage six harvests, since with complete climate controls; you don’t need to stop for the winter. As an added bonus, these setups will most likely exist in cities, greatly reducing the travel distance for the food, and the pollution associated with shipping.

From waste to waist

As my colleague Richard noted in a previous blog, water is going to be scarce in the future. Unfortunately, plants need three things – light, nutrients, and water. Light has been discussed, and nutrients come from the air and soil, but water is an issue. I see an opportunity here to kill two birds with one stone. Cleaned wastewater is being spoken of as the future of potable water, but it’s a hard sell to get it to consumers, no matter how much it’s been cleaned. It doesn’t matter that it is chemically cleaner than tap water; there is a psychological barrier that is hard to overcome.

But plants don’t care about the taste, so why not use it for them? Reclaim water from municipal waste and send it to pinkhouses and greenhouses for plant use. It doesn’t matter to me if my tomatoes were fed Perrier or poop-water, so it’s an easy work-around for two issues at once.

Vegetables of the sea

While it’s certainly not a new idea, algae farming, or algaculture, is taking off, and increasing in popularity due to a number of factors. For starters, algae is versatile. Various uses for algae include bioplastics, fuel, pharmaceuticals, pollution control, and yes, food. A number of traditional dishes from around the world include algae, including nori and laverbread, and algae with high levels of protein can be used as a nutritional supplement. But it’s the ability of algae to replace ethanol biofuel that I find the most exciting. Of the more than ninety million acres of corn planted in the US every year, 40% of that is for ethanol and biofuel. That’s almost forty million acres just for biofuels. If we converted that to algae for biofuel, we could grow that in two million acres, and we could do it in non-arable land, leaving an area larger than Greece free for cultivation of crops for human consumption.

Getting smart about the great outdoors

As much as pinkhouses and non-traditional methods of cultivating plants appeal, we will still need dirt farms. Grain staples, such as corn, rice and wheat, are grown on a small profit margin, and can only be profitable (and therefore have people willing to grow them) by growing in mass quantities. It’s just not feasible to do that inside, which leaves outdoor farming as the only real option for such things.

These are not the farms that some of you may have grown up with, or seen in TV. Just like telephones, farms have gotten smart. This includes tractors and plows with GPS and straight-drive programs, integrated computers to keep track of harvest and watering schedules, soil and temperature monitors that send SMS alerts, and a whole host of gadgets to make farming easier, faster and cheaper. Watering becomes automated, based on results from soil probes, even the distance between plants is carefully calculated to obtain maximum yield.

This is particularly needful in the less developed areas of the world. Large parts of the world are still using farming techniques hundreds, if not thousands, of years old. They are ignorant of the massive improvements in cultivation techniques, even non-technological techniques that could turn a mediocre crop into a moneymaking one. The changes to irrigation alone in the last hundred years could increase worldwide food production by a significant amount. Educating and assisting the less technological farms will have benefits for everyone, in the long run.

Orchards need more than roots

Orchards and vineyards suffer from the same issues as staple plants – need for space means interior growing is insufficient for most purposes. But they aren’t looking at a technological revolution – they’re looking at a mathematical one.

For at least fifty years, orchards and vineyards have been collecting data on what works best, and sharing it. Teams of scientists have developed models, which were then tested, and finally implemented, and the results are clear. By using these techniques, along with controlled breeding of the plants to emphasize desired characteristics, orchards have increased average tree density (in the US) from 40 trees/acre fifty years ago to over 3,000 trees/acre, in extreme cases.

This concept is interesting to me, because it doesn’t involve high-tech implementation. Once the solution has been found, it can be used anywhere. Yes, the same smart systems that I described above can be used for orchard and vineyard management, but trees are largely stable, once grown, and need less care than more delicate plants do.

Yes, we will have GMOs

Of all the topics I write about, GMOs are probably the most contentious. They are either heralded as a savior, as in the case of golden rice and Hawaiian papayas, or demonized as unethical and dangerous, as with certain companies, and the switch back to organic papayas in Hawaii. Many people hate GMOs, consider them unnatural, and don’t want them anywhere near their plates. But with climate change wreaking havoc on farmlands, and blights and viruses hammering crops, GMOs may be necessary to keep everyone fed.

Do not take this as a whole-hearted endorsement for all GMOs. I believe that while some are good, and even necessary, each one should be judged by its own merits, and care should be taken. Invasive species are a cautionary tale that all should heed, but letting people starve, or go blind because of dislike for a method is going too far in the other direction.

I believe we should promote safe and properly regulated GMO use, but use them all the same.

The United Nations estimates we will have a world population of 9.6 billion by 2050. That is nearly a third again of our current population. We currently have more than 10% of the world population suffering from malnutrition. This means that we need to feed over 3 billion more people in the next 35 years. That will be the single largest increase in food production in human history. But we can do it, we have the technology.

© Copyright, IF Research, February 2016.


RELATED LINKS

Indoor farming

http://www.popsci.com/farms-grow-up-thanks-to-technology

Precision agriculture

http://www.forbes.com/sites/federicoguerrini/2015/02/18/the-future-of-agriculture-smart-farming/#115ee3c4337c

Modernizing world staple farming practices

http://www.newsweek.com/2015/10/30/feed-humankind-we-need-farms-future-today-385933.html

Algae vs other plants

http://www.alltech.com/future-of-farming/algae-the-growth-platform

http://www.theguardian.com/global-development/2012/jan/22/future-of-food-john-vidal

vs Corn

http://www.scientificamerican.com/article/time-to-rethink-corn/

http://www.ers.usda.gov/topics/crops/corn/background.aspx

Mathematics of Orchards

http://www.nyshs.org/pdf/-NYFQ%202013.CMC/send%20CMC.NYFQ%20Fall%202013/Pages%2011-16%20from%20NYFQ%20Book%20Fall%202013-5.pdf

GMOs

http://modernfarmer.com/2013/12/battleground-hawaii-tiny-island-state-leading-battle-gmos/

https://www.geneticliteracyproject.org/2016/01/31/why-the-gmo-debate-matters/

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What’s Wrong with Apple?

by senior futurist Richard Worzel, C.F.A.

To read their Wikipedia entry, you would have to say Apple, Inc. is an amazing success:

“Apple is the world’s largest information technology company by revenue, the world’s largest technology company by total assets, and the world’s second-largest mobile phone manufacturer. On November 25, 2014, in addition to being the largest publicly traded corporation in the world by market capitalization, Apple became the first U.S. company to be valued at over US$700 billion…it operates the online Apple Store and iTunes Store, the latter of which is the world’s largest music retailer.”[1]

What’s more, Apple is incredibly profitable, and is sitting on something like $150 billion in cash. They’re doing all right for themselves.

Yet, in my opinion Apple is dying, it just hasn’t realized that yet. And what’s wrong with Apple can be stated in four words: Steve Jobs is dead.

What Made Jobs Unique

What set Apple apart from everyone else was the genius of Steve Jobs, specifically his ability to see the future in a unique way, one that escaped just about everyone else. As a futurist whose job it is to do just that, I appreciated his ability, and was envious of it.

Jobs was a one-man disruptive force, a bulldozer in the use and creation of disruptive technologies. Although Jobs was famous for stealing and adapting great ideas rather than inventing them, he did have a knack for knowing what the consumer would want before consumers themselves had any idea.

Because of this ability, he helped define what a personal computer was in the first place with the Apple II, then set about creating one that was “insanely great” with the Macintosh. He redefined it again when he returned from NeXT to retake the reigns at Apple Computer.

In Jobs’ view, a computer was an extension of our creative selves, not a mundane tool for work and drudgery. He made it fun, trendy, fashionable, and indispensible. Indeed, the way we look at and use all personal computers, especially smartphones, has been shaped by Jobs’ view of what a computer should be.

Jobs wrecked the music industry with the iPod and iTunes. The industry will never be the same after his ministrations – and neither will the way we experience music.

He upended the cellphone industry and dethroned the BlackBerry by defining what a smartphone was, and could and should be. In the process, he created the essential status symbol of our age, the one that continues to reshape our social interactions, the way we live, even the way we (dangerously) drive.

No Longer Insanely Great

My point is this: What has Apple done for us lately, except change the colors and packaging of Jobs’ creations? What have they done that is disruptive since 2011?

Steve Jobs was the creative genius behind Apple. The people he left behind are brilliant designers, engineers, and creative people. But they are not geniuses. They do not seem to be able to, as he put it, “put a dent in reality” the way that he could.

And my experience with Apple mirrors this loss in ways that I hate. Since 2011, Apple’s products, while continuing to be slick, beautifully designed, and pretty, have lost their intuitiveness. The software is harder to use. The interfaces are more complicated, and require more knowledge of technical stuff that I could care less about. The different platforms don’t work seamlessly together.

I bought my first Macintosh in 1985, and have never used any other computer (except to try to help friends wrestle with their horrible Windows-based machines). But the thrill is gone with Apple, and what was great is now merely pretty good – and getting worse. My children, who grew up in an Apple ecosystem, are now turning to other machines. Apple isn’t special anymore, because the spark that made it unique is gone.

Several years ago, when Jobs returned to Apple and brought it back from the dead, Fortune magazine did an article about the company. As best I remember it, they said that Apple was (and is) the only computer company that made everything, from the hardware to the software to the interface to the packaging, and so could make it all work together as an organic whole, as one ecosystem. But most importantly, Apple had Jobs sitting at the top, demanding nothing less than “insane” greatness, and would drop kick engineers, systems analysts, designers, accountants, or anyone else that brought him anything less. That no longer seems to be true. It seems to me that Apple is settling for mediocrity with increasing frequency.

What Has Apple Done to Us Lately?

And lest you think I’m being unduly sentimental, or am some kind of Jobs cult-follower, ask yourself a simple question: When was the last time Apple disrupted a new industry? When did they produce something that forced consumers and competitors to change the way they thought about the world, their place in it, and what they could do if they chose? Netflix has done more to revolutionize TV than Apple TV. Amazon and PayPal have done more to revolutionize retailing than Apple Pay. And Google Glass, failure though it was, did more to define wearable computers than the Apple Watch.

Somehow, being able to buy a “rose gold” iPhone 6S with an improved Siri doesn’t even move the needle on that scale. And what industry did the Apple Watch change? In fact, what does it actually do?

Apple can coast for a long time on the brilliance of its former star, helped by the exceptionally competent crew of people he left behind. But, in my view, Apple is like a projectile that has been launched and is now running out of momentum: it will soar for a while, then the arc will turn down, and it will fall back to Earth.

I will mourn its passing, but Apple actually died in 2011.

© Copyright, IF Research, January 2016.


[1] https://en.wikipedia.org/wiki/Apple_Inc.

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Events & Surprises of 2016

by futurists Richard Worzel and Kit Worzel

There are many things that we already know about 2016:

The leading edge of the Boomers will turn 70 – and complain about it.

The Millennials are taking over in government, business, and society. Leading edge Millennials are turning 35 this year, and are (finally) moving into the household formation stage of their lives, which will produce ripples through many industries, from baby clothes to mortgages, furniture to insurance, and much more.

One significant omission from the Millennials’ buy lists is likely to be cars, as they will increasingly rely on organizations like Uber and ZipCar for transportation. Cars are no longer status symbols – except possibly the Tesla.

There will be a presidential election in the US that will be incredibly tedious, irritating – and frightening.

The Rio Olympics will take place, with the expected crises and scandals, both by the athletes, and by the organizers.

Weather will be predictably unpredictable – and global temperatures will continue to rise. 2016, like 2015 and the decade before, will probably be the hottest year on record.

Terrorists will continue to try to disrupt the Western world.

So far, it’s all predictable.

But what are some of the less predictable things, and the things that might even surprise us in 2016?

Technology

Computer genies, such as Apple’s Siri or Microsoft’s Cortana, will actually become useful, reducing the demand for smartphone apps by doing things directly. For instance, Apple TV’s interface is going to devolve to “ask Siri” as the means of doing things, and this is a sign of things to come.

We also suspect that IBM may make their smart computer system, Watson, which is resident in the Cloud, available to the general public to answer questions, for problem solving, and general information, effectively competing with search engines like Google. Watson is already available for a variety of online purposes, both for free and for pay, but this range is clearly going to expand. However it happens, the point & tap computer interface may get competition by allowing people to ask their computer genie to do things for them.

Meanwhile, Watson is moving into more general medical diagnostics, after being used primarily by specialists in areas like oncology. This will open the door to having health care professionals other than doctors act as gatekeepers to the health care system.

Three tech trends very much in evidence in 2015 will converge in 2016. Virtual Reality (VR), Augmented Reality (AR), and the growing demand for, and supply of, bandwidth, particularly wireless bandwidth, will bring about the emergence of telepresence, which substitutes a virtual experience for actually being someplace, or with someone. Hence, you may be able to virtually attend a concert in San Francisco or London and feel like you’re there, or visit with your great-aunt Millie at her bedside, all without leaving home. This will take years to unfold, but it will begin in earnest in 2016.

Wireless Internet traffic will exceed wired Internet traffic in 2016. We are in an increasingly wireless world.

With 750,000 drones expected to be bought this holiday season in the US alone, drones are among the most anticipated gifts of 2015. However, new FAA regulations, combined with lawsuits and police reports, may ground the gifts before they are even opened. Drones bought before December 21st have until February 19th to register them with the FAA (at a cost of $5). So, while 2015 may have been the year of the drone, 2016 is shaping to be the year of drone regulation, with fights between governments over who has jurisdiction and arguments about how drones affect privacy.

Meanwhile, 3D printing is about to cross the chasm from the early-adopter phase into the mainstream[1]. As printers come down in price, and more and more people get experience with them, they will think up more and more things they can do with them – which will further accelerate 3D adoption, at home and at work. The ripple effects will be significant: 3D printing won’t replace mass production, but it will reshape it, along with related businesses, including stores, plus delivery and distribution companies.

3D printing is also set to start printing out human organs, beginning with skin. While the printing of more complex organs is still a few years off, bio-printing skin will happen in 2016, as will FDA testing on its safe use. The testing will take time as a single error in printing could produce cancerous cells, but if it is possible to increase fidelity enough, then this will be a boon to burn victims, some cancer survivors, and of course, the beauty industry, which will start doing skin transplants to get rid of wrinkles. While some may consider this last frivolous, beauty companies such as L’Oréal and Procter and Gamble are the ones leading the research and development on bio-printing, and they will undoubtedly offer it as a cosmetic treatment once it is proven safe. Meanwhile, what they learn will be beneficial for 3D printing of other organs – at a price.

And finally, 2016 is the year that Tesla’s battery factory comes onstream. The first year’s production is already sold out, and the Paris conference on climate change will only boost the demand for both electric cars (where Tesla holds the image lead), and Tesla’s PowerWall, for storing alternative energy, notably from solar power panels. Everything renewable is going to explode in 2016 – and much of it will be at best expensive, and at times, counterproductive, actually increasing GHG emissions. Mistakes are almost inevitable in a rapidly developing industry.

The Global Economy

The US economy will lead global growth. It won’t have the highest growth rate in the world, but the expansion of its economy will be the most important factor in 2016’s global economy. And the US dollar will continue to be the strongest major currency. Over time, of course, this means that foreign countries will export more goods to the US at lower prices (in US dollars), which will eventually hurt US producers, but for now the US leads the way.

The price of oil will continue to fall, possibly as far as $20, and, absent some geopolitical catastrophe, will stay below $50 for at least the next two years. We first wrote about the coming fall of the price of oil in January of 2013 in a research report produced for the Conference Board, and it’s pretty much played out as we thought it would.

And, of course, as the price of oil falls, so will the Canadian dollar, perhaps as low as 60¢. This will help Canadian exports and manufacturing over time, and provide some relief to the Canadian oil sector (since its products are sold in US$), but will sorely test the tourism industries in Florida & Arizona.

Meanwhile, global economic surprises could emerge from several possible sources.

First, a number of hedge funds are in trouble, and this could trigger a financial panic. We learned from the Lehman Brothers fiasco that a run on the financial system doesn’t necessarily have to start with a commercial bank.

This time, the trigger might be the reversal of the almost decade-long stretch of historically low interest rates. Many of hedge funds have loaded up on junk bonds, which offered higher-than-market yields. The problem is that with interest rates finally rising, the already illiquid market for many such bonds has vanished, making them impossible to sell. From a market point of view, this means they are effectively worthless, which may destroy the hedge funds that bought them.

That would produce ripple effects around Wall Street – and, as we’ve seen, that can spread quickly to Main Street as well, triggering a financial market crash, and possibly knocking back economic growth. Do we think this is the most probable outcome? No; but we do believe it’s much more likely than people realize, and should be watched.

And, as we said earlier, the US economy is leading the global economy. If everyone else is in bad shape, it could eventually drag the US down with it. That hasn’t happened before, but then the Chinese economy hasn’t been as important before, either, and there are signs that it might be in recession right now.

Meanwhile, real estate prices in Australia, Canada, and the United Kingdom are overheated, and will, someday, fall. The question is not whether they fall, but when. There’s no way to know whether this year ahead could be the time, but house prices in Newfoundland and Alberta, Canada, both related to the oil industry, are already backing off.

And finally, as we’ve said before, the EU crisis (involving Greece, Ireland, Portugal, Spain, and more) has not gone away, it’s just been papered over. The fundamental problems are not financial or economic (although there are financial and economic problems) but demographic. Europe has too many old people, and has made them too many promises to them that it can’t afford to keep. This will eventually end in tears – but for now, they will continue to paper over the cracks and hope that the tooth fairy will solve their problems some day.

Climate Change & Related Issues

As The Economist newsmagazine succinctly put it, “That climate change is happening, that it is very largely man-made and that it is exceedingly dangerous are all now hard to deny (although America’s leading Republican presidential candidates routinely try).”

Because of climate change, we can look forward to a succession of ever-warmer years (although not every year will set a new record – real world changes don’t happen in straight lines). We can also look forward to more extreme weather events around the world, including, but not limited to, blizzards, hurricanes, floods, violent thunderstorms, and droughts.

The Paris climate agreement was a surprise in that 195 countries came together to agree on a resolution on climate change. We won’t see much action in 2016, as the terms of the agreement don’t come into effect until 2020.

Meanwhile, there will be the expected negative reactions, especially in the traditional energy sectors. To cut greenhouse gas emissions significantly means severely curtailing the burning of oil, gas, and coal, which has been estimated to strand as much as $2 trillion of investment capital. Does anyone believe the fossil fuel industries will just walk away from that much money without a fight? Expect stronger lobbying and arguments for “clean” coal and “green” oil, as well as attempts to find carbon offsets and a push to fund carbon capture research.

But where might we be surprised in all this?

As the politicians and their civil servants return from the Paris conference and start to get down to the difficult work of turning promises into reality, there are going to be some hard truths that may catch people off-guard in 2016 if real action is actually taken:
(a) Fossil fuels are more heavily subsidized than renewables, with the result that we’re discussing limiting carbon emissions at the same time as we are subsidizing them.
(b) Much, but not all, of the money invested in renewable energy has been wasted, and some investments, including many wind farms, have indirectly increased GHG emissions. (Germany’s experience is a prime example.)
(c) Until very recently (2014) carbon emissions were not only continuing to grow, but the rate of emission was actually accelerating. The 2014 slowdown may be due to the slowing of the Chinese economy, coupled with their efforts to cut back on coal use in order to reduce air pollution. What is clear is that hitting the Paris target of keeping global temperature increases to near 1.5o C is going to be incredibly difficult and expensive, even without the inevitable photo-op boondoggles.
(d) Solar panels are dropping rapidly in price, to the point where they are going to cause real financial problems for electric power utilities.
(e) And finally, we will eventually need net carbon emissions to drop, first to zero, and then to actually decline. That last step – reducing the carbon in the atmosphere – will be the most difficult, and is why carbon capture research is actually a good, long-run idea.

The reasons why investments in renewables haven’t been more fruitful are pretty clear: governments (1) are lousy at picking winners, especially when technology is involved, and (2) political processes involving the handing out of money are quickly perverted to fill the pockets of those who are politically nimble.

A much better approach would be to let the markets sort things out, and the most direct way of doing that is through a steadily rising carbon tax, preferably designed to be either revenue-neutral (i.e., the revenues from a carbon tax are matched, dollar-for-dollar, by decreases in other taxes), or, failing that, be invested exclusively in research on new renewable energy technology.

The real climate surprise of 2016, then, will be if we see governments and consumers take sincere, effective action on climate change. We would welcome this, but don’t expect it.

Scarcity of drinking water will make headlines in 2016[2], and may bring some breakthroughs as well. Using local materials, Egyptian scientists have developed a desalination technique based on pervaporation, or evaporating water through a series of membranes and using the membranes to remove the salt. Egypt’s technique is much less energy intensive than other desalinization techniques, and if they can successfully scale it up, it could revolutionize access to potable water in hot, sunny climates.

Meanwhile, Bill Gates, through the Gates Foundation, is a big name in the water game these days. His foundation has been developing a method to purify sewage and wastewater to make it potable. It’s actually easier and cheaper to purify sewage than sea water, not to mention safer, but the hard part is overcoming the “yuck!” factor. Expect a PR campaign in the coming year on this topic, if not in the US, then in Africa and the Middle East.

Geopolitics

China’s obvious intention to dominate the South China Sea and the sea lanes that run through it could precipitate a military & political crisis. China considers itself a superpower, and is intent on expanding its economic, political, and military reach. The problem is that it is ignoring the legitimate claims of its neighbors, and, at times, trying to steamroll them. There have been some conflicts that could have escalated militarily, but didn’t, but that could change at any time. All it takes is a political miscalculation on one side or the other, or a hot-headed pilot or ship’s captain to make a mistake and precipitate a full-blown crisis. Where it could get particularly scary is if the mistake or standoff involves the United States, directly or indirectly, which has lately been flexing its military muscles in response to China’s illegal construction of military bases on disputed reefs.

Russia’s Vladimir Putin is the head of a country in decline, but one that (a) has delusions of recreating the Soviet empire, which is beyond Russia’s present capabilities, and (b) nuclear weapons. This is not a good combination, and could explode during 2016.

In 2015, Putin continued the slow motion invasion of the Ukraine, and provided weapons to Russian insurgents there, one of which was used to shoot down a civilian aircraft, killing everybody onboard. The sanctions that were applied in retaliation by the West caused further damage to a Russian economy already reeling from crashing oil prices and a declining population base. Perhaps as a result, Putin seems to be making common cause with the West over DAIISH (called ISIS in the media), while simultaneously trying to prop up his ally, Bashir al-Assad, the Syrian dictator. All told, it’s hard to figure what Putin will do next – except it’s certain to be for the glorification of Vladimir Putin. A surprise, then, would be if Putin actually cooperated with the West in the Middle East.

Social Trends

We’ve been talking about the emergence of women for well over a decade (with more recent, higher profile examples here or here), but 2016 is probably the year when everyone else wakes up and starts talking – some positively, others negatively – about the Power of Women. Women have been growing more powerful in virtually every aspect of Western life for quite some time, but things are about ready for recognition that women are now very much in the ascendant. If Hillary Clinton wins the US presidency, that will be the icing on the cake, for it will also throw the entire issue in high relief.

And finally, beer cocktails will emerge as a trend in 2016. We first encountered a beer sommelier in 2015 – someone who had undergone extensive training in order to help a customer select just the right beer – and micro-breweries are well established as trendy and significant. Now take that a step further, and look at how beer could become an ingredient in something more intriguing, and you get beer cocktails. Cheers!

© Copyright, IF Research, December 2015.


[1] http://www.zdnet.com/article/3d-printing-is-going-to-be-huge-in-the-most-boring-and-fascinating-ways-imaginable-ever-expect/

[2] See also the three FutureSearch blog posts from June, 2015, starting with: http://www.futuresearch.com/futureblog/2015/06/30/water-is-not-the-new-oil-the-future-of-water-part-i/

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Baby, Who Will Drive My Car?

by senior futurist Richard Worzel, C.F.A.


➢ Within the next 5 years, self-driving cars will expand rapidly into those commercial sectors where the economic case is overwhelming, but will only replace privately-owned cars more gradually, say over 20 years. Some economic consequences will be profound.

➢ The benefits to cities are so remarkable that urban planners should immediately start preparing for smart cars and smart highways.


It’s always tempting, as a futurist, to make bold, sweeping prognostications, especially about an emerging technology. Some commentators have done just this, saying that self-driving cars will offer such compelling economic benefits that they will quickly reshape our cities, radically change our way of life, and eliminate many millions of jobs.[1]

Most other critics say the opposite, that self-driving cars will evolve gradually, and won’t make an appreciable dent in our driving habits or our economy for many years, possibly decades.

So, who’s right? As is often the way when you’re trying to puzzle out where the future is leading us, the answer is: some of each. Let’s look at the case for self-driving cars first.

Feature Creep Moves Us Towards AV Capability

The technologies behind self-driving cars (also called autonomous vehicles or “AVs”) are emerging very quickly, and may accelerate to the point where your next car may capable of driving itself if you so desire. Elon Musk, the head of Tesla Motors, as well as SpaceX, says that today’s Tesla cars could handle 90% of the driving conditions you face today[2], but not without supervision. He also says that he expects cars that can drive you to your destination while you sleep (i.e., operate fully autonomously) will appear within the next five years.[3]

These advances will be (pardon me) driven by a number of developments. Computers will continue to get more cost-effective at exponential speeds, allowing AVs to get smarter at least that quickly. Next, as companies like Google, Apple, and the major car companies race to claim the biggest possible piece of this new car market, the software will become steadily – and quickly – more sophisticated and effective.

Next, those cars whose operations are managed by software, as Tesla’s electric cars are, can be upgraded with a software patch, and don’t need to wait for the next model year. However, while software is easily upgradable, true AVs also need an array of expensive sensors, which will limit the number of fully AV-capable cars on the road.

Finally, AVs will probably be networked, which means that what happens with one AV can be quickly incorporated into software and mapping systems, and distributed to all AVs (or at least, all AVs of that manufacturer). This means that an unusual, potentially hazardous road, once it has been encountered by one AV, will become familiar to all AVs. As a result, the mapping of highways on the fine scale necessary for completely autonomous cars will happen at exponential speeds once the process begins in earnest.

Likewise, as computer smarts help AVs learn how to cope with more difficult kinds of driving conditions, such as snow-covered highways or freezing rain, these lessons will quickly spread throughout an AV fleet.

All of this would be like a teenage boy being able to learn from the experience of all other teenage boys, all over the world, in all kinds of climates, and on all kinds of roads through a kind of telepathic link-up. You can get smart awfully quickly that way.

Meanwhile, all cars will incorporate more and smarter features to assist drivers to drive more safely, always starting with luxury cars. This has been happening for decades, first with cruise control, then automatic braking systems, traction control, and, more recently, with things like lane-keeping, cross traffic warning, and blind spot warning systems. Such systems will continue to grow in sophistication and power, creeping towards AV capability.

Niche Markets Will Lead in Adopting AVs

One market ripe for AVs is Uber, which is currently challenging the survival of the taxi industry. Uber makes no bones about its desire to replace independently owned cars and drivers with Uber-owned self-driving cars. This would increase Uber’s effectiveness through computer optimization to serve demand. It would also decrease its costs, eliminate many of the current problems, such as worrying about drivers assaulting passengers, and allow Uber to keep virtually all of the money it collects rather than sharing it with freelancers.

So whether it’s Uber, or someone else interested in replacing the functions of cab drivers, it’s clear that in most urban markets, the idea of self-driving cars is compelling, and likely to be a niche where a number of players will become early adopters. Indeed, a Columbia University study indicated that you could replace today’s 13,000 NYC cabs with just 9,000 self-driving cars[4]. According to Columbia, such cars would offer faster response times (they estimate an average of 36 seconds) at significantly lower costs (50¢/mile), in large part because of the lower capital costs involved.

At a cost of approximately $25,000 per cab, reducing the number of vehicles required to supply NYC with cab service by 4,000 units produces a capital saving of $100 million. That’s a pretty enticing number for just one city.

This will also bring real benefits to cities that municipal planning groups should consider right now. Thirty percent fewer cabs means less gridlock, and a decrease of at least 30% in emissions from cabs, with lower health care costs. In fact, results would be better than that because a more efficient, responsive, and inexpensive cab system would also reduce the rate of personal car ownership, getting even more cars off the road. And if such cab-substitutes were also zero-emission cars[5], then emissions reductions would be even greater. All told, this could be a real win for cities, and at virtually no cost to them as it would be financed by companies like Uber.

The other related niche is for city dwellers who use car sharing schemes, such as Zipcar or AutoShare, rather than owning a car. Here again, the case for AVs is compelling: the car drives itself to your door, rather than forcing you to go get it. Then, when you’re done, it drops you at your door, and drives itself away. Indeed, it might be that cab and car-sharing companies would become one and the same.

Another niche where AVs will be welcomed is in long-distance trucking, where the skilled workforce is rapidly aging, and finding replacement drivers is increasingly difficult.

Moreover, as the pre-war and boomer generations age, more and more of them will reach the stage where they have difficulty driving, and some of them will lose their licenses. The ability of AV-capable cars to either compensate for aging reflexes, or take over the driving creates a large, and rapidly growing potential market for AVs and intelligent driver-assist cars, all of which will help finance the move towards AVs.

Smarter Cars Will Lead to Smarter Highways

As cars become autonomous, they will also become networked. As one example, a “car train”, being a set of individual cars, traveling in a bumper-to-bumper, coordinated pack, will be able to go much faster than they could under individual control, take less road space, and increase traffic flow and capacity.

And as this kind of smart coordination between cars increases, smart highways will begin to emerge to manage traffic flow, often using Fog computing techniques, which will, again, decrease congestion, emissions, and collisions.

It’s true that smart highways will require significant capital investments, but it’s money that would have to be spent on highway replacement and repair anyway, but it will just be done with sensors and better design in mind. Moreover, smart highways will actually save taxpayers money. Smart highways will cost more per mile, but they will cost significantly less per passenger-mile, reducing gridlock, highway repair and replacement costs, emissions, and the need for emergency services.

Best of all, smart highways can begin without having to replace existing roads at all by having a central computer interact with communication-enabled smart cars by radio – perhaps even by having cities buy digital messaging capacity on a wholesale basis from existing cellphone providers.

Then, as highway systems become more sophisticated, it will become easier to justify investments in ever-more sophisticated sensing and management systems that will make smart highways work even better with AVs, creating a virtuous circle, all pushing us towards smarter highways with smarter vehicles.

All of which means that city planners should be looking into the future, and planning for smarter, better, more cost-efficient infrastructure rather than just repairing the dumb infrastructure they inherited.

So, all told, the case for AVs seems like a slam-dunk. Or does it?

The Problems with AVs

The biggest barrier to AVs might be called Big Iron. That’s the stock of non-AV capable cars and trucks on the highways. Since most people aren’t going to junk their existing vehicles just to get somewhat more capable ones, it will take a gradual turnover as current cars wear out and are replaced by smarter ones. With the average age of cars and trucks in the U.S. being 11.4 years, it will take more than a decade, probably closer to 15-20 years, for truly smart, AV-capable cars to dominate the highways, especially as these features will appear first in luxury cars before trickling down to the rest of us.

Next, driving isn’t always easy, and there are still situations where developers acknowledge that AVs don’t do very well, such as in low visibility conditions. Heavy rain, snow, or fog, particularly when they obscure highway markings, can be particularly difficult for AVs. But then, such conditions are difficult for humans, too.

Likewise, driving on congested city streets, with bicycles, pedestrians, and other vehicles doing weird and often unpredictable things, present real challenges for AVs – just as they do for human drivers. Indeed, you could argue that the much faster computation and reaction speeds of AVs may do a better job of avoiding people and other vehicles in such situations.

However, while we accept that it’s OK for humans to take such risks, the creators of AVs can’t afford to do so just yet. Hence, even if AVs were better at driving in such conditions than humans, they might not be allowed to do so. More experience, improved results, and definitive statistics showing AV superiority will eventually allow AVs to function in such circumstances, but it will take time for humans to accept this.

The Non-Driving Problems of AVs

Which leads to the non-driving barriers to AVs, particularly laws, insurance, and liability.

Every state has a different attitude about self-driving cars, whether they are acceptable or safe, and whether to allow them to function on their own. This is creating a patchwork of laws that will take years or even decades to smooth out. After all, different jurisdictions have had almost a century of cars with human drivers to work out most legal differences.

Next are the interlocking questions of liability and insurance.

Google, the most prominent AV developer, says that its cars have been involved in a total of 17 collisions in more than 2.2 million miles of driving, and claims that none of these have been the car’s fault.[6] Typically what has happened is that an AV has been hit, either from the rear or the side, by human drivers who either don’t stop, expect the AV to keep moving, or to bend the rules of the road as a human would, rather than adhering to them strictly. The software will quickly overcome this problem, but collisions will still occur.

When they happen, they will create questions about liability, largely because people who sue in car collisions usually go after the party with the deepest pockets. I mean, who do you think would make a richer target: Google, or a little old lady in tennis sneakers?

And if an AV is in a collision, and is, for some reason, found to be at fault, who’s responsible? The human driver, whether he had his hands on the controls or not? The car company? The software provider? Or is there a chain of liability, where the driver is sued, then his insurance company in turn sues the software company? We don’t have answers to these questions yet, but you can be sure they will arise.

And whom does the insurer insure? The driver? The AV company? Or the software provider? Stay tuned to find out, because we don’t know at this point.

What Are the Broader Implications?

It’s clear that as AVs take the wheel from less-precise human drivers, there will be far fewer collisions, which means fewer deaths and lower insurance premiums, plus less need for police, fire, and emergency medical personnel.[7]

There will be fewer vehicles on the road, which means less gridlock, lower emissions, as noted earlier, plus a significant drop in demand for petroleum.

Fewer people will shell out the big bucks to own a car, but will instead buy car services on a piecemeal basis. This means more discretionary income will be freed up for other things, creating a de facto increase in standards of living – but at a cost.

Fewer cars also mean lower profits and the probable bankruptcy of many car companies, a decimation of jobs for auto workers, plus a lowering of demand for everything related to the world’s largest manufacturing industry.

And what kinds of jobs will cab drivers be able to find? Driving a cab is one of the grittiest, most dangerous jobs out there. When that’s not available, what do all those people do instead? With 171,000 cabs in the United States, that probably projects to between 300,000 to 400,000 people who will be out of work in the U.S. alone.

But the implications go far beyond this. Given the importance of automobile manufacturing, will the loss of jobs, and the decrease in economic output associated with making cars create a backlash against automation by consumers, voters, and governments? Surely such a backlash against automation is coming (which will be the subject of a future blog), but could this be the trigger that releases it?

Next, social patterns will change in ways large and small. The elderly will regain independence, whether or not they have drivers’ licenses. Children will be able to travel places unescorted – which means there will have to be a whole different kind of safeguards on AV travel. Sixteen-year-olds may not bother to get a driver’s license, and the parents of teenage boys may not see their insurance rates go through the roof when their kids start borrowing the car. Party hosts may once again start offering their guests “one for the road.”

Social status, and the car as a status symbol will change, although how is unclear. Will it be a real status symbol to own a car, or not to own a car? Will owning a pre-AV vehicle requiring manual control be a source of swank? Will we increasingly socialize in the flesh as mobility becomes easier, or will the trend towards virtual socializing continue?

We don’t know. The future of technology doesn’t depend on the capabilities of technology alone, but on what humanity chooses to do with new developments. After all, the Internet was originally created to be a robust communication system that could survive a thermonuclear war, not to allow people to shop for books, slinky underwear, and vacations at home.

The Bottom Line

Self-driving cars are going to emerge far faster than most people, especially most pundits, think, but they will not sweep all before them. Some sectors will race to be early adopters, like cabs, car-sharing systems, and long-distance trucking firms. Yet, most people will accept AVs more gradually, and AVs probably won’t constitute a majority of vehicles on the road until 2035 or beyond. But city planners would be well advised to drop everything and start work on smart highways right now, because the benefits are truly compelling.

So: baby, who will drive my car?

© Copyright, IF Research, November 2015.


 

[1] See, for instance, http://zackkanter.com/2015/01/23/how-ubers-autonomous-cars-will-destroy-10-million-jobs-by-2025/

[2] http://www.theverge.com/2014/10/2/6894875/elon-musk-says-next-years-tesla-cars-will-be-able-to-self-drive-90-percent-of-the-time

[3] http://www.cnet.com/news/elon-musk-sees-autonomous-cars-ready-sooner-than-previously-thought/

[4] http://www.slate.com/blogs/future_tense/2015/07/07/self_driving_cars_a_new_department_of_energy_sponsored_report_finds_self.html

[5] Ignoring, for the moment, that there is no such things as a zero emission car.

[6] http://www.nbcnews.com/tech/innovation/google-self-driving-cars-face-slow-going-california-dmv-n464331

[7] http://gizmodo.com/study-humans-driving-cars-are-more-likely-to-hurt-othe-1739440432

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The 7 Megatrends that Will Affect the Future of Infrastructure, Part II

by senior futurist Richard Worzel, C.F.A.

This is the second half of a complete report on the future of infrastructure in Ontario, commissioned by the Residential and Civil Construction Alliance of Ontario. The first half can be found here, and provided the conclusions, along with dealing with demographics and technology. This half will deal with climate change & environmental degradation, the global economy, human longevity & health management, the widening tears in the fabric of society, and the rapidly eroding job market. While this report is about Ontario’s infrastructure needs, the comments more broadly apply to virtually all jurisdictions in the developed world.

Climate Change & Environmental Degradation

The most important thing to remember about the coming effects of climate change is that Mother Nature always gets paid. Damage from extreme weather cannot be avoided, ignored, postponed, or overridden by political opinions. Repairing the damage left by such events can be ignored or left to someone else, if the political will to do so is strong enough, but there would still be economic costs that would affect everyone.

Climatologists have been quite clear that no individual weather event can be traced specifically to climate change. However, the rising incidence of extreme weather events is directly traceable to climate change. This means that as the Earth’s climate changes, regardless of why it is changing, we will experience a growing number of weather disasters, from flooding (as happened in Calgary and, to a lesser extent, Toronto), to drought (as is happening in Western Canada right now), stronger hurricanes, thunderstorms, blizzards, ice storms, and so on.

In other words, we cannot predict a once-a-century storm, but we can predict that once-a-century storms will now happen more frequently. Hence, we may have to plan on enduring such events once-a-decade, or even more often, instead of once-a-century. This will require a much stronger – and more costly – response to weather and climate than in the past, and a more robust infrastructure to be prepared for such events.

In some ways, the worst part of this is that we don’t know how changing climate will play out in terms of weather, so we don’t know how to prepare. Will Ontario experience flooding or drought? Will our winters be warmer and snowier, or colder and drier? We don’t know, and that uncertainty carries its own costs in planning terms.

For instance, suppose that in Ontario, Tornado Alley, currently focused in southwestern Ontario, were to shift eastward somewhat, and the GTHA were to start experiencing regular tornados. Would we be prepared? Current building codes do not contemplate frequent storms of such power. Imagine downtown Toronto, say at King & Bay, experiencing an F3 tornado, for instance.

What we do know is that extreme weather events are becoming more frequent. It is therefore clear that we must consider this in any future infrastructure plans.

Water Supply

A more predictable future issue relates to water supply, partly because Ontario, like most other jurisdictions, has avoided necessary investments in maintaining and upgrading water management systems, and because the availability of fresh, potable water is becoming a critical issue almost everywhere.[1]

Moreover, Canadians generally, and Ontarians in particular tend to feel we have all the water we need, and hence don’t tend to think about water supplies. Walkerton proved that this isn’t necessarily the case, but there’s more to the issue of water than just bad management, as this quote from Statistics Canada indicates:

“In Ontario, the threat to water availability is high (more than 40%) in the urbanized south-west part of the province. This is caused by large industrial and municipal water use and a low inland surface water supply.  According to the OECD classification scheme then, this region was under water stress during these years [2005 & 2007]. In other parts of the province, the results of the indicator calculations show a low threat to water availability.”

And, as mentioned earlier, almost all of Ontario’s population growth is in the south-western parts of the province. Accordingly, Ontario cannot afford to be complacent about water.[2] Moreover, while this Statistics Canada study studied water usage during 2005 & 2007, the study uses a 30-year average of the water supply. Hence, this wasn’t just a case of two years that happened to be unusually dry, this is a much broader problem related to the concentration of industry, and population growth in southern Ontario.

One of the simplest ways that municipalities can deal with potential water shortages is quite simple, relatively cost-effective, and uses well-established, off-the-shelf technologies. It is to process sewage back into potable water, which would significantly reduce the need for additional fresh water. The problem is the so-called “yuck” factor.[3] Some communities in California have overcome this by pumping purified water back into aquifers, which also increases aquifer . Or, to make this approach more palatable, municipalities can return the sewage, processed to drinking water quality, to streams, rivers, or lakes for other, downstream centres to use. This happens in lots of places in North America, including Saskatoon and Edmonton, which make use of South and North Saskatchewan Rivers, respectively.

A more exotic future solution may be the use of nanotechnology water filters, such as those created using graphene – a highly organized form of carbon that is finding many applications. The potential to create a filtration system using graphene that is relatively cheap and effective on an industrial scale has not yet been proven, but is worth watching.[4] However, even if it proves to be successful, it leaves unanswered the other fundamental question (after cost) that bedevils desalinization efforts: What do you do with the toxic impurities that have been separated from salt or polluted water?

But however it’s done, population growth, especially in southern Ontario, will require that water infrastructure be given a high priority.

Solid Waste

Next garbage, or solid waste, will be a persistent problem until we face it squarely, and stop trying to sweep it under the carpet. Efforts to divert solid waste from landfill to recycling are commendable, but won’t be enough as we are running out of landfill sites.

The major problem with recycling is that it depends heavily on the market prices for the materials recycled. This will be particularly problematic in future as China, which has been the engine of demand for commodities of all kinds, will experience lower rates of economic growth in the future, which will lower the demand for, and hence the prices of, most commodities. In turn, this will make recycling less appealing economically.

Some parts of Europe have taken a different approach to recycling by legislating that the cost of a product should include the cost of recycling (or disposing of) the materials involved. Whether Ontario adopts that approach or not, we should be studying what other jurisdictions have done with garbage, and adopt those techniques that are most cost-effective, and that take fullest account of the environmental consequences of use. The days of ignoring environmental consequences are ending, no matter how big the tantrums of those who want to continue to just dump.

Sweden has a very successful, if somewhat controversial, approach that is economically very successful: they first recycle as much material as they can, typically about 60% of solid waste, and then incinerate the balance, generating power by doing so. They have been so successful in these efforts that they have run out of garbage, and are now letting their neighbours pay them to take garbage for incineration.[5]

Many environmentalists in North America deplore this practice (and in the process seem to feel that they are holier than the Swedes, but on what seems to me to be thin evidence). They typically object on two principal grounds: first, that incineration produces dangerous pollution, and second, that it’s a sin to destroy materials we may be able to reuse.

The first point can be refuted: “SEMASS, a waste-to-energy facility in Massachusetts, in the US, uses 1 million tonnes of municipal solid waste to generate 600 million kilowatt-hours of electricity every year and recycles 40,000 tonnes of metals. The annual toxic emission is less than half a gram”[6]

As for the second, I’d say let the burden on proof be on those who believe there’s an economic way to deal with the roughly 40% of solid waste that isn’t currently being recycled. If they can demonstrate ways of doing so, then such techniques should absolutely be adopted. If not, then waste-to-energy incineration should be given serious consideration.

Fortunately, Ontario has a test case in its own backyard. The Durham Region York Energy Centre is just completing a waste-to-energy facility. This $286 million facility is projected to process as much as 140,000 tonnes of waste each year and generate approximately 17.5 MW of energy. As operations start up, the rest of the province will be able to witness, first hand, the feasibility of waste-to-energy as a means of dealing with the residue of solid waste after all possible recycling avenues have been exhausted.

The Global Economy

I want to touch on two aspects of the global economy that will affect infrastructure.

The first is that they global economy is likely to grow much more slowly over the next 20 years than the last 20 years. This is happening for a number of reasons.

First, China’s population is aging very rapidly, and it’s workforce is actually in decline. This means that virtually all of its future growth will come from productivity growth. Admittedly, this still leaves them with a lot of growth potential, but it also means that their future growth is more likely to be in the range of 5-7% than 8-12%, and will gradually slow even The current crash in Chinese stock market, and the subsequent economic fallout, could cause an even more rapid deceleration in economic growth.

Next, the other major sources of growth are experiencing significant teething problems. India has yet to show the will to cut through their thickets of red tape, and until they do, their growth will remain modest rather than robust. Brazil is sliding back to its socialist ways, and reverting to the habits of bad . As a result, their growth is stalling. Rounding out the BRICs, Russia was never really a growth story, but rather a country that rode high while oil prices were high, but didn’t diversify their economy. Add to this that Russian population is in rapid decline and demographics argue strongly against solid economic growth.

There are other, emerging countries that will boost global growth, many of them in Africa, but they are not yet of a size or importance to matter as much as China and India on their own.

Education Must Change

Next, I want to turn to the importance of education and its infrastructure to Ontario’s future.

The hollowing out of Ontario manufacturing due to globalization, which took place over the past 20-30 years, is largely done, but the fundamental lesson from globalization needs to be remembered: There is now one, world-wide marketplace, and we are competing not only with each other and our American neighbours, but with everyone else in the world as well. The stakes are high, the competition is unforgiving, and there is no going back.

The ultimate implication of that is that we need to have a globally superior education system, and education can no longer end when people cease to be young adults, but must carry on through our working lives. As well, our education system has to take account of the faster pace and the unforgiving demands of a global economy.

Ubiquitous access to the Internet has rendered the memorization of facts to be of minor importance, while the ability to perform wide-ranging research, absorb information quickly, ask critical questions, and be creative enough to produce innovative solutions to real-world problems are key. Yet, our primary and secondary schools continue to be hobbled by a “back to basics” mentality more suitable to the 19th Century than the 21st. Meanwhile, roughly 75% of budgets for public education are spent on salaries.

In an era when globally competitive organizations are lean and forced to be innovative, this antiquated model needs to be phased out. In particular, education should be customized to each individual student to enable them to approach their greatest potential.

With computers becoming far more capable – I’m hesitant to say intelligent – Ontario could be investing in technologies that allow human teachers to be more effective, working one-on-one with students when students have a problem, and allowing them to work in a self-directed fashion under computer supervision most of the rest of the time.

But no matter whether this is done in traditional ways, with teachers, desks, and classrooms, or through technology, Ontario must move its schools to focus on creativity, critical thinking, and customized education rather than lecturing and memorization.

Meanwhile, post-secondary education is experiencing a revolution, with or without the permission of Ontario colleges and universities. Distant learning and online education, are becoming commonplace, and the traditional role of the lecturer is under scrutiny. Why should a college employ local teaching assistants, for instance, to perform lectures when some of the best lecturers in the world can be available online, and when the students can view such lecturers on their own schedule rather than the ?

Tutoring would still be necessary, but even that can take place remotely. And the emergence of MOOCs (Massive Online Open Courses) and online degree and diploma programs indicates that the future of the traditional, ivy-covered campus is very much in question.

I would suggest that Ontario should be focusing on finding the best technological solutions being used anywhere in the world, asking each post-secondary institution to focus on what they are best at doing, and aiming to provide post-secondary education to a much broader audience than at present. Let me take these one at a time.

That technology is often, but not always, replacing traditional post-secondary models is clear and irrefutable. But we should learn from the eHealth fiasco: rather than re-inventing the wheel, we should find who’s doing the best work in this already-well-traveled field, and buy the technologies off the shelf.

Next, we should be prepared to offer not only traditional degree and diploma-granting programs, but also just-in-time learning for a wide-range of fields. In this way, Ontarians can upgrade their skills piecemeal, and often without having to take time off work. Such learning may or may not lead to major credentials, like Masters or Doctorate degrees, but would encourage incremental learning, and credentialing that is focused on specific tasks for workers in the public, private, and non-profit worlds.

And we shouldn’t restrict such learning only to Ontarians. I believe we could make a sound financial case for selling Ontario education – from primary school through graduate studies – around the world. Indeed, I believe we might be able to make Ontario’s education system self-financing. Even more important is that by so doing, our post-secondary institutions should be allowed to increase the resources they have available to pursue excellence.

What we should not be doing is building mausoleums to pander to the egos of rich donors in support of 19th Century education.

Human Longevity & Health Management

According to Statistics Canada, life expectancy in Canada for men rose from 59 to 77 years in the 80 the years from 1920 to 2000, while women did even better, going from 61 to 82 years. That means Canadians saw an increase in life expectancy of almost 3 months per calendar year, on average, through most of the 20th Century.[7]

Much of this was due to advances in health care, particularly in childbirth. However, other, related advances were also helpful, such as the refrigeration of food, and the identification of antibiotics.

The future holds even greater promise. Researchers now have a rapidly expanding understanding of human genetics, how diseases affect the body, and how environment and heredity interact to help, and harm, health. As a result, we can seek cures and treatments deliberately rather than by accident, or by trail-and-error.

Meanwhile, technology is making it possible to do things earlier eras would not have believed possible. We are already growing replacement parts for the human bodies, from kidneys to heart valves, and the expectation is that we will eventually be able to replace virtually every human organ from an individual’s own stem cells (with the possible exception of the brain itself). Hence, if your heart is wearing out, or has incurred significant damage due to a heart attack, we can grow you a new heart from your own tissue, and replace the old one with a new, healthy one.

We are learning how killers like cancer or diabetes work, and finding ways of stopping them. We are starting to be able to design vaccines, antivirals, or pharmaceuticals for a specific purpose, such as stopping or curing previously incurable diseases, such as SARS or Ebola. We may even be able to come up with a vaccine to prevent the common cold.

Meanwhile, wearable computers, with computer genies or avatars, will be able to monitor our health, heartbeat-by-heartbeat. This will let us intervene much earlier than we can today. We’ll be able to significantly improve outcomes when a crisis develops, such as a heart attack or stroke, or when a disease, such as influenza, is developing. Indeed, precursors are already emerging in the marketplace that can perform some of these functions, from the Nike+ app that monitors your heart and running pace, to IntraXon’s MUSE system, that monitors brain activity and provides feedback to help the user reach a calmer state of mind. Systems like these, and many others, will continue to be expand in scope until they become wide-ranging health and well-being monitors.

As well, the exchange of data will supercharge medical research. Individual health information (stripped of personal identifiers) will be shared between each person’s wearable computers, and regional, provincial, national and global health databases. This will provide a massive amount of searchable data that will enable computer intelligences and medical researchers to identify risk factors, genetic strengths, and help locate cures for existing and emerging diseases. (For more detail on this, see the FutureSearch blog post, “Health Care to the Year 2035”.[8])

While all of this is wonderful news, it does have two implications for our health care infrastructure. First, people will be living longer, perhaps decades longer, than they have in the past. And second, this could add to the overburdening of the health care system. Accordingly, in planning the future of health management infrastructure in Ontario, it will be critical to identify the most cost-effective means of health management.

Cost-Effective Health Management

Cost-effective health management will be very different from traditional health care. The practice of medicine should make steadily increasing use of technologies, such as IBM’s Watson computer intelligence, to assist health care providers in making faster, more accurate diagnoses, to map out an evidence-based health management regime for every Ontarian that needs it, and to do so using the least-expensive means possible.

This approach may lead to non-traditional approaches that raise the hackles of many groups involved in today’s health care system. Demographics implies that we will have fewer doctors, and their services may be too precious for them to continue to act as the health system’s gatekeepers. And it may be that hospitals should be avoided unless there is no other alternative that will serve. This is so because hospitals are enormously expensive, and because they serve as an inadvertent breeding ground for infection, especially antibiotic-resistant bacterial infections.

In place of these traditional entry points to the health care system, it may be that money should be invested in clinics that specialize in initial visits (i.e. gatekeepers), staffed by nurses or physician associates and supported by computer diagnostic systems; others that specialize, and create assembly lines, for in-demand procedures, like endoscopies, knee, hip, or retina replacements, or the treatment of hernias. Such clinics would cut waiting times, improve outcomes by having procedures done by doctors who specialize in them, and relieve the pressure on the rest of the health system by dealing with the most demanded procedures.

In turn, this might mean that Ontario should no longer build or expand hospitals for treatment (as opposed to research) except in locations that are significantly underserved. What is clear is that we will not be able to afford the traditional answers that have grown up, organically, over the decades at a time when cost-effectiveness will be critical to the survival of taxpayer-funded health care system.

The Widening Tears in the Fabric of Society

The rise of homelessness, and the growth in the penal system have important implications both for the social good, and for infrastructure planning.

What I will not address are the moral implications of these issues. There are people who believe that being homeless or being in jail is a sure sign that someone is a bad, unworthy person. Others believe it means such people are victims who must be helped. I don’t wish to enter into that discussion.

Instead, my concern is whether we are properly allocating the infrastructure investments related to these issues, because both will become more expensive in the future.

In the case of homelessness, there is a very real risk that an increasingly difficult and unrewarding job market will throw a steadily rising number of people onto the streets, to become homeless.

In the case of the penal system, there are two issues. The first is that in a difficult employment environment, having a prison term on your résumé will almost certainly kill your job prospects. In effect, when someone is imprisoned, they become almost automatically unemployable for the rest of their lives. The second problem with the penal system is that aging prisoners require a steadily increasing amount of health care, making their upkeep more and more expensive.

Neither homelessness nor the penal system are of interest to the general public, but the costs to society of sweeping the problems under the rug are probably high enough to justify a radical revamping of both. Yet, part of the problem is that our reactions to these two issues are so close to being knee-jerk that we don’t even collect much data on the costs.

Homelessness

On the subject of homelessness, two American jurisdictions did collect data, and also tried an apparently radical solution: giving homes to the homeless with few, if any, strings attached. One was liberal New York City; the other conservative Utah. The result?

“Between shelters, jail stays, ambulances, and hospital visits, caring for one homeless person typically costs the government $20,000 a year. Providing one homeless person with permanent housing, however — as well as a social worker to help them transition into mainstream society — costs the state $8,000”[9]

Yet, there’s a real barrier to this kind of reform, which is public opinion. Most people are opposed to giving homeless people something for nothing, especially if it encourages others to take advantage of the system. We fail to realize that we are implicitly paying what might be called a “homeless tax” by not giving shelter to the homeless.

Therefore, a better solution might be to find a way to have the recipient of such housing contribute something in return. They could, for instance, be offered the opportunity to buy their home through an installment system. Or they might be asked to earn their housing by helping build additional housing.

Ironically, this may actually be harder and more expensive to police, but the politics of something-for-nothing may require it.

The Penal System

There is much more documentation relating to the costs of the penal system, more so in the U.S. than in Canada. In fact, even neo-conservative Republicans, such as the arch-conservative Koch brothers, in the United States have flipped positions, and are now advocating a revamping of the entire legal system, particularly jail sentencing, because the result are so costly, and the system is so ineffective.[10] No thinking person still advocates that “getting tough on crime” is an effective answer.

To pick a particularly stark example of the direct costs of the penal system, New York City’s Independent Budget Office found that “in 2012 it cost the city $167,731 to hold each of its daily average of 12,287 inmates, or about $460 per inmate per day. Undergraduate tuition at Harvard University is $38,891 annually, or $155,564 for a four-year degree.”

In other words, it would be cheaper to send a NYC inmate to Harvard for four years than to lock them up for one year.[11] This is, admittedly, an extreme example. In 2010, for example, the average annual cost of imprisoning an inmate in a U.S. federal prison was US$28,284. In California in 2009, the cost of keeping someone in a state prison was US$47,102.[12]

In Canada, the costs are comparable. A 2012 report from Corrections Canada indicates that it costs an average of C$113,974 to keep an inmate in a Canadian federal prison.[13]

Are there alternatives? Yes there are, and technology will increase the range and subtlty of these alternatives as smart computers and wearable computers will be able to monitor the locations and behavior of people convicted of non-violent crimes with increasing sophisticated and precision. But we don’t have to wait for technology to bail us out.

The Don Drummond report, commissioned by the Province of Ontario, indicated that it costs $183 a day (which projects to $66,795 a year) to keep someone accused of a crime in jail, compared to $5 s day ($1,825 a year) to keep them on supervised release.

It’s clear that Ontario should learn from America’s mistakes, and stop looking at incarceration as the only solution for people accused, or convicted, of committing a crime. In fact, a recent Globe & Mail editorial noted that more than half – 55% – of people held in provincial and territorial jails have not been convicted, but are awaiting trial. The editorial concluded that “The system is broken.”[14]

Paying attention to the megatrends relating to these two aspects of society clearly requires fresh, open-minded thinking – and a clear fix on finding better uses of infrastructure spending than on traditional facilities to cope with homelessness and .

The Rapidly Eroding Job Market

It is much harder for someone to get a job today than it was 50, or even 20 years ago. This is largely due to two factors that have drastically reshaped the job market, one well known and documented, the other widely acknowledged, but largely overlooked: the first is foreign competition, and the second is domestic automation.

Foreign competition has hollowed out employment in Ontario’s economy, notably in the manufacturing sector, as Rapidly Developing Countries (RDCs) grew with the emergence of the global economy. In particular, China and India drew tens of millions of jobs away from more expensive, developed countries, including Canada. The result is that it is no longer possible for someone who has no desire to go to college or university to have a friend or family member speak to the foreman at the local factory, and get a job on the line. That just doesn’t happen any more, although it was commonplace in the 1960s and before.

Foreign competition is not going away any time soon. China may no longer be as big a draw for manufacturers as it was, but manufacturing jobs will chase low wages to new places around the world. They are unlikely to return to Ontario because it costs too much to live in an expensive, developed country like Canada.

Meanwhile, even this trend is being disrupted by the other factor at work: Automation. As computers continue to get cheaper, faster, and more sophisticated at greater-than-exponential speeds, the work that they can do faster, more effectively, and more cheaply than humans expands at ever-accelerating rates as well. This has been discussed, but its importance has been largely overlooked. And it’s no longer just blue collar jobs that are being replaced by machines. For instance, law and accounting jobs are rapidly being replaced by sophisticated computer systems. Indeed, any job, at any level, that involves routine, doing the same kinds of things repeatedly, is very much at risk to being replaced by computers, robots, and automation.

Although this doesn’t directly relate to any specific infrastructure system, it does affect all of them. If these trends continue – and I see nothing that can stop either of them, short of massive global disasters of some kind – then our governments and our society will need to take a completely different approach to the employment markets.

Moving Our Education System Out of the 19th Century

If we do not change how we educate and equip people for employment, then our governments will see their tax base erode, the divide between the haves and have-nots will expand, economic growth will be stunted by lack of consumer demand, and, based on what has happened elsewhere, we will see a rise in social unrest. And, as an important side effect, this will undercut the investment funds required for infrastructure investments.

What can we do about this? First we need to move our education system from the 19th Century to the 21st, as described above, including encouraging grown-ups to return for additional educational “top-ups” on a just-in-time, as-needed basis. As well, students in secondary school and higher should be tutored in practical job-seeking skills.

Then we need to be more proactive about helping people find – or create – jobs. At the moment, most job seekers are pretty much on their own, with occasional, inconsistent government help. This needs to become more systematic, and more robust to cope with the labor markets of tomorrow. And such systems should provide access to additional training to allow workers to upgrade the skills they need to find work.

And helping job seekers create their own jobs as entrepreneurs will also be necessary as people will increasingly be responsible for their own careers, whether they sign their own paycheques, or someone else does. This includes providing course materials in the Ontario education system on how to create and run a business, plus systems in the economy to help people start and sustain businesses. Hence, low-cost services that help with accounting, payroll, taxes, plus providing mentors for entrepreneurs, much as CIDA does abroad, would all be valuable. The government doesn’t necessarily need to run such programs, merely make sure that they are available.

Governments should seek to work with private sector employers to accomplish these things, rather than try to do it all on their own. And they should remind employers that if consumers aren’t earning any money, they are unlikely to buy many products. This was something that Henry Ford knew quite well, but which corporate chieftains seem to have forgotten.

© Copyright, IF Research, October 2015.


[1] Worzel, Richard, FutureSearch blog post, “Water Is Not the New Oil: The Future of Water, Part I”, http://www.futuresearch.com/futureblog/2015/06/30/water-is-not-the-new-oil-the-future-of-water-part-i/

[2] “Water Availability”, Environment Canada website, https://ec.gc.ca/eau-water/default.asp?lang=En&n=2DC058F1-1

[3] Poon, Linda, “Bill Gates Raises A Glass To (And Of) Water Made From Poop”, NPR website, http://www.npr.org/sections/goatsandsoda/2015/01/10/376182321/bill-gates-raises-a-glass-to-and-of-water-made-from-poop

[4] Harper, Tim, Agenda website, “Can graphene make the world’s water clean?”, https://agenda.weforum.org/2015/07/can-graphene-make-the-worlds-water-clean/

[5] Pierce, Alan, “Models of Sustainability: Sweden Runs Out of Garbage”, Pachamama Alliance website, 25 Nov. 2012, http://www.pachamama.org/blog/models-of-sustainability-sweden-runs-out-of-garbage

[6] Kushal, Neeraj, “Growth vs garbage”, The Times of India website, 28 Apr. 2012, http://articles.economictimes.indiatimes.com/2012-04-26/news/31410327_1_recyclable-waste-garbage-waste-management

[7] Statistics Canada website, http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/health26-eng.htm

[8] Found on the FutureSearch website at: http://www.futuresearch.com/futureblog/2010/03/05/health-care-to-the-year-2035/

[9] Bertrand, Natasha, “Utah found a brilliantly effective solution for homelessness”, Business Insider website, 19 Feb. 2015, http://www.businessinsider.com/this-state-may-be-the-first-to-end-homelessness-for-good-2015-2.
See also Surowiecki, James, “Home Free?”, The New Yorker magazine, 22 Sept. 2014, from their website, http://www.newyorker.com/magazine/2014/09/22/home-free

[10] Goodwin, Liz, Yahoo! News website, 12 Nov. 2014, http://news.yahoo.com/how-the-koch-brothers-became-criminal-justice-reformers-235243801.html

[11] Aljazeera America website, “Report: Annual NYC inmate cost exceeds four years at Harvard”, http://america.aljazeera.com/articles/2013/9/30/report-finds-nycinmatecostalmostasmuchasivyleaguetuition.html

[12] Hirby, J., “What Is the Average Cost to House Inmates in Prison”, The Law Dictionary website, http://thelawdictionary.org/article/what-is-the-average-cost-to-house-inmates-in-prison/

[13] Thibault, Eric, “It costs $113,000 a year to lodge a federal prisoner: Report”, Toronto Sun, 28 February 2012, http://www.torontosun.com/2012/02/28/it-costs-113000-a-year-to-lodge-a-federal-prisoner-report

[14] “Most of Canada’s prisoners have never been convicted of anything. Why are they in jail?”, Globe & Mail editorial, 17 July 2015, from the website, http://www.theglobeandmail.com/globe-debate/editorials/most-of-canadas-prisoners-have-never-been-convicted-of-anything-why-are-they-in-jail/article25559599/?click=sf_globefb

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The 7 Megatrends that Will Affect Tomorrow’s Infrastructure

by senior futurist Richard Worzel, C.F.A.

I was commissioned by the Residential and Civil Construction Alliance of Ontario to produce a report by September, 2015 on the future infrastructure needs of the Province of Ontario, Canada. The conclusions of my report really apply to the United States as well as Canada, and, indeed, to most of the world’s developed countries.

Because of the length of this report, I’ve divided it in half. You can find the second half here.


Definition

Infrastructure is the set of systems that supports our way of life, and includes things like roads, transit, water and sewer systems, communications, electric power, garbage disposal, health care, housing, the penal system, and education.

It is a subject totally lacking in sex appeal, and absolutely necessary to our lives.

Conclusions

In preparing this report, I came to three primary conclusions about the future of infrastructure investments in Ontario:

  1. We will have to address the massive underinvestment of the past several decades, as well as prepare for the growing needs of Ontario’s future. If we do otherwise, the costs to society will be higher than the costs of investment. We will pay either way, but we will be better off if we make the investments needed.There are always people who will take a populist stand, arguing against raising taxes for any purpose. They are either ignorant of the costs of inadequate infrastructure, or deliberately advocating something they know to be harmful in order to gain a selfish, political advantage.
    Some argue that governments cannot be trusted to use tax funds effectively. This is a reasonable argument, and, with the scarcity of funds that I expect we will experience in future, it is vital that we make good use of any funds earmarked for infrastructure. Yet, while finding ways of making sure results are measurable and transparent, and that those responsible are accountable, is entirely appropriate, refusing to allocate money for infrastructure investment is simple-minded, selfish, and, ultimately, self-defeating.
  2. We will be stretched to find the money to make the investments that we must make. In particular, demographics, notably the aging of the Boomers and the cost of their health care needs, threatens the financial solvency of Canada’s government-sponsored health care system. Climate change will make us spend money in places we don’t wish to. The global economy will force us to be lean and effective, giving us no cushion for bad planning, or careless investing. And the rapidly mutating job market threatens the underpinnings of our economy, as well as the very fabric of our society.
    We will have to plan carefully, allocate funds on the basis of real, measurable needs as opposed to political expediency, and use means of ensuring that the taxpayer is not left on the hook for sloppy implementation, or unreasonable cost overruns.
  3. The infrastructure systems that we have used in the past may be too expensive to use in future. Accordingly, we must seek new solutions to infrastructure needs when such solutions can be shown to be more cost-effective. In particular, we need to look at new possibilities being brought forth by ever-accelerating technologies for ways to do things more effectively, and with less money.

The raw necessity of investing heavily in infrastructure should drive us to find better ways of doing things in a time when resources will be scarce. In a very real sense, we will invent our future. We should work hard at doing it well.


 

Why and How We Need to Make Major Infrastructure Investments

As the human race has changed, so have the systems we need for our societies and ways of life. We no longer need caves, or horse stables in every town, or extensive canal systems. Our infrastructure needs have changed, and continue to change. And now, with the light-speed acceleration of technology, the changes coming to the Earth’s climate, and the unprecedented aging of society, we and our governments need to respond more quickly, and to think differently about infrastructure, than we have in the past.

As well, we have seriously neglected investing in infrastructure in the past, and will be forced to make up for it, whether we like it or not. According to an article contributed to the Globe & Mail in December of 2014, Canada has an infrastructure deficit of between $350- and $400 billion.[1]

Deciding what infrastructure to invest in, when to make such investments, and how much to invest are all difficult decisions, but they all have one common element which can simplify such decisions: they can all be rendered in financial terms. Making an infrastructure investment has a cost associated with it, plus an expected rate of return to society. (Or alternatively, not making such an investment imposes a cost on society, which can also be measured or estimated.)

Where the rate of return is greater than the cost, the investment should either be made, or the government involved should provide a clear explanation why it is preferable to pay the higher cost of not making the investment. In the present, low interest rate environment, the cost of investing is probably about as low as it is likely to get, which means we should be aggressively pursuing infrastructure investments right now.

The likely direction of interest rates in the future, and the steadily rising costs of delaying infrastructure investments clearly indicate that now is a better time to make such investments than later.

But what else about the future will affect infrastructure decisions?


 

The 7 Megatrends that Will Affect Infrastructure Planning

With the changing needs for, and forms of, infrastructure in mind, I would identify the following megatrends that will affect infrastructure investing in Ontario’s future:

  • Demographics – An aging population has many implications, some of which are daunting.
  • Technology – We’ll be able to substitute technology for earlier, more expensive solutions, as well as do things that were never possible in the past.
  • Climate change & environmental degradation – Mother Nature’s bills always get paid. We must plan accordingly.
  • The global economy – The continuing emergence of a unified, world-wide economy has major implications for Ontario, especially in education.
  • Human longevity & health management – While related to demographics, this factor has major implications that go much further.
  • The widening tears in the fabric of society – The rising costs of the penal system, plus the rise of homelessness, unemployment, and underemployment, have significant implications for Ontario.
  • The rapidly mutating job market – Lifetime employment is long gone, and the future is ever more uncertain, with major implications for society, the economy, and infrastructure funding.

Let’s consider each of these seven megatrends, and their effects.


 

Demographics

In many ways, demographics is destiny. It is not the only force that drives change in our future, but it is the central one. After all, you can’t have an economy without people.

There are many implications of demographics that will affect the province of Ontario, and its needs for infrastructure. Let’s start with a demographic profile.

The first graph, below, shows the current population of Ontario, distributed by age. The big hump highlighted is (by my definition) the Baby Boom, who are currently between ages 48 and 68.

Ontario 2015

The second graph shows how Ontario population age groups will either increase or decrease in size over the next 10 years. (The groups shown are 5-year age groups: 0-4 years old, 5-9 years, 10-14, and so on.) Hence, the 70 to 74 year old group will increase by roughly 265,000 between 2015 and 2025, for instance.

Ontario 2015:25:2

What this means is that while several groups will increase in size, such as young children, and 30-45 year olds, the biggest change is going to be the Baby Boomers moving towards retirement age.

These changes have some clear implications for infrastructure:

  • We will need more schools (but, as I’ll point out later, most of these needs will be near the major urban centres).
  • Millennials will be moving into the family formation stage of their lives, which means they will need all of the community infrastructure appropriate to young families, including playgrounds, pediatric care, and the ability to get to and from work, which can be some combination of roads, public transit, and bike trails. At the same time, most of them probably won’t be able to afford homes in the downtown areas of the major urban centres, particularly Toronto, and so will move farther and farther into the suburbs.
  • The number of retired and elderly is going to grow faster than at any time in history, which means the needs of the elderly are going to overwhelm virtually all other infrastructure needs. This is due to three overlapping trends: greater life expectancy; the growing number of “oldest elderly”, being people 80 and up; and the aging of the Boomers. Combined, this makes people 65 and up the fastest growing group in the population. And they are politically potent, more or less getting anything they vote for, and defeating anything they vote against.
  • Where the Boomers choose to retire is going to have a huge impact on communities, transportation, and social services. Some will stay in their family homes for a time, usually in urban centres. Some will sell their family homes for something smaller in other parts of those same urban centres. And some will move to smaller communities, partly in order to harvest the funds tied up in their houses. What we don’t know, at this time, is how many Boomers will make which choices.
  • The costs of health care for the Boomers are going to dominate government finances, eating into funds for all other government activities. In terms of infrastructure, it means that the Government of Ontario is going to have to choose wisely which infrastructure it chooses to underwrite, find cost-effective ways of encouraging others to build infrastructure without government money, but without costing Ontario residents unreasonable amounts of money (think of highway 407). , outcome-driven planning is going to be critical.
  • What is not shown, but is implicit in the graphs above is immigration. Among large, developed countries, Canada has one of the highest immigration rates and one of the highest proportions of first generation immigrants. As immigrants overwhelmingly tend to settle in the major urban centres, this means that a disproportionate amount of Ontario’s population growth will be in and around the major urban centres, especially in the Golden Horseshoe. This implies continued sprawl, and problems with affordable housing, not only for immigrants, but also people born in Canada who are in the household formation stage of their lives.
  • Contrariwise, Aboriginal peoples have the fastest population growth among non-immigrant Canadians. As such, they should represent a steadily increasing percentage of employed citizens in Ontario society. However, that can only happen if the health, education, and living conditions of First Nations, Inuit, and Métis peoples are significantly improved. Moreover, the recent Truth and Reconciliation Commission of Canada report clearly shows a social and cultural imperative to make good on generations of mistreatment and neglect by Ontario society and government, along with the other provinces, territories, and the government of Canada. Consequently, projects related to the infrastructure needs of such groups should be placed higher on the political agenda than they would otherwise be. It’s time, and past time, that Aboriginal needs were given higher, rather than lower, priorities.

Another important aspect of demographics is where people will want to live. For more than a century, people have been leaving the rural areas of the world and moving into the urban centres. This megatrend continues unabated, and, if anything, has accelerated here because of Canada’s immigration policies.

All of this implies that there will be more demand for infrastructure in Ontario’s cities – especially in the Greater Toronto and Hamilton area (GTHA) – and less in the exurban and rural areas of the province. This is evident from the following census maps produced by Statistics Canada

Change in Population between 2001 & 2006 Census Tallies

2006 Census map

 

Change in Population between 2006 and 2011 Census Tallies

2011 census map

This movement away from exurban areas could leave a lot of towns and smaller municipalities unhappy with the way the Government of Ontario allocates infrastructure funding, especially as such funding becomes scarce. This may, if not provided for, lead to ineffective choices being made for projects that have a much higher political value than real value to the citizens of Ontario.

Consequently, an objective means of setting infrastructure investment priorities will be needed to identify the most important – as opposed to the most politically attractive – infrastructure investments. An independent assessment of the rate of return vs. the cost of each project would offer such an objective measure.

The continuing in-migration into the cities will also create steadily worsening bottlenecks. The 400-level highways, and especially those going into the major cities, are already heavily clogged with trucks bringing all the goods and products needed to support city dwellers. Train and pipeline transport, especially of hazardous substances, must grow to support urban populations, but is being widely opposed because it is perceived as being too lightly regulated, and therefore dangerous.

Urban populations are going to continue to grow, and in areas already heavily developed. As a result, the volume of truck, rail, and pipeline transport heading into, and supporting the cities will also swell. The increase in truck traffic, added to the volume of commuters heading into work, is going to make gridlock and bottlenecks worse, and, in some places, impossible. This will be particularly evident – and difficult – in the GTA, where population is projected to grow by almost 3 million people to 9.4 million by 2041.[2]

More roads are probably not the answer as there is often no room for additional, or expanded, roads. Different, often unpopular, choices will be necessary, such as congestion tolling, which is spreading among major urban centres around the world, and has been shown to work. And drivers must be given workable alternatives to encourage them to leave their cars. Here we should draw on the experiences of congested, cramped, densely populated parts of Europe, where rapid transit and bike lanes are created as parallel infrastructure systems in order to allow the largest number of people to move with the smallest possible footprint.

One partial solution will be to encourage the development and use of telecommuting by GTA businesses. As wireless and high speed Internet technologies continue to develop, and as online conferencing tools become more sophisticated, this may allow Area businesses to grow without requiring as frequent physical commuting.

Alternatively, planners could find ways of encouraging a greater decentralization of activity, spreading the commuting load around the major centres rather than continuing to find ways to funnel more people into relatively concentrated areas. This might mean promoting UK-style “new towns” supported by low-cost, high-speed transport, and offering more affordable housing outside of core areas. The intra-regional transit plans in place in the GTHA are an important step in that direction, but more would need to be done.

What will almost certainly break down in the next 10 years and beyond are the attempts to shoehorn ever more workers into the GTA’s downtown core, which has already created costly and exasperating gridlock. If that pattern is unworkable now, with approximately 6 million people in the GTA, it will be impossible as the region exceeds 9 million. New solutions have to be found through a variety of means.


 

Technology

Technology will be both a blessing and a curse for infrastructure planners. On the one hand, it will offer the possibility of new, more cost-effective solutions. Among these might be:

  • Remote, smart sensors may mean that visits by seniors (and others) to doctors or hospitals, or visits by nurses to those needing health care in the home, may be significantly reduced. Indeed, I would contend that future advances in health care technology should be seriously studied as an alternative to new hospitals.
  • Autonomous vehicles (self-driving cars & trucks) may – over time – significantly reduce the number of additional roads required to support population growth in the urban centres. Moreover, self-driving trucks may become more widely used late at night, arriving to make deliveries before commuters seek the roads.
    Driveless cars may also be much more efficient at moving through traffic. They could be able to consult with other cars, and a region’s traffic computer about the best route from A to B, diffusing congestion, and lowering the amount of time – and hence number of cars – on the road at any given time.
    Autonomous vehicles may also significantly lower traffic collisions, injuries, and fatalities. This would lower the number of emergency vehicles and crews required, and reduce medical expenditures. And such vehicles may also significantly reduce traffic violations – and revenues.
    But I keep saying “may” and “would” rather than “will” because AVs require a major changeover, both in the way we do things, and in the infrastructure necessary to support these new ways. As well, the mix of AVs and human-driven cars on the highways will significantly affect how much savings there will be. A roadway completely devoted to self-driving cars will have a substantially greater capacity than one that has 10% human-driven cars, because those driven by people will require all vehicles to allow more space and affect the rates of speed and acceleration. A complete changeover is unlikely to happen quickly.
  • As mentioned above, telecommunications continues to grow and expand, and its importance will grow apace. Indeed, it is no longer a frill for early adopters, but is now an absolute necessity for almost everyone engaged in the economy, as well as for most people in society.To date, Internet access has been provided almost exclusively by private sector suppliers. However, the importance of widespread, fast Internet service is too important to be left only to a private sector oligopoly. They will almost certainly remain the backbone of Internet service, but other alternatives are emerging that should be considered, and which may provide a spur to private sector offerings.
    Chattanooga, Tennessee created an Internet infrastructure through their municipal electric power utility almost as an afterthought in the construction of a smart power grid. “The Gig”, as it’s called, offers residents and businesses Internet speeds of 1 Gigabyte per second, or about 50 times faster than the U.S. national average. As a result, “Chattanooga has gone from close to zero venture capital in 2009 to more than five organized funds with investable capital over $50m in 2014 – not bad for a city of 171,000 people.”[3] And, predictably, cable and telecom Internet service providers are petitioning the U.S. Federal Communications Commission to block such developments.
    Elected officials in Ontario’s exurban areas are anxious to see broadband extended to their communities. “Building broadband is as important as paving roads and building bridges” one leader was cited as saying.[4] And the $170 million Eastern Ontario Warden’s 4G broadband initiative, which is a P3 project involving federal, provincial, and local governments, is one example of how such services might evolve.Fast Internet service can provide important tools in a wide variety of applications, and many sectors of the economy. Telecommuting has been mentioned. Distance education will be discussed below. Telehealth is a rapidly expanding field that can help stretch scarce resources in the health care system. Moreover, new applications always emerge from more powerful communications tools that can add significant value to Ontario’s economy, and make it more attractive as a place to do business – just as has happened in Chattanooga.
  • Computer monitoring systems, notably Fog computing[5], may allow us to identify pipeline breaks almost immediately, and dispatch crews to fix them before they cause significant damage. This could not only allow leaks in oil pipelines to be identified early, but also in water, storm water, and sewage pipes. At the moment, an unknown, but significant, percentage of the water piped to Ontario residents is lost due to leaking underground pipes.
  • Three-dimensional printing[6] is a commonly used phrase to describe a range of different technologies that will be as revolutionary in the real world as the Internet is in the virtual world. These technologies will have some obvious effects, such as changing some parts of the manufacturing industries from mass production to mass customization, or eliminating some mass production in distant locations in favour of local production. But it will also have more subtle effects, such as changing distribution industries, like shipping, trucking, rail transport, and last-mile delivery services. Hence, the plans for an object might be bought for what amounts to a royalty payment to the originator, but produced locally, either at home, or at a local store like a Canadian Tire or Home Depot, rather than shipping it from, say, China to Ottawa.
    But 3D printing has even broader implications, notably in printing organic materials. It may, for instance, be possible to print food directly from constituent compounds, leading to the development of steaks without steers, or food without farms. This has longer-term implications for food transportation, safety, and nutrition that will – over time – affect public services.
    Of course, we don’t know yet whether producing food without farms is financially attractive; it’s too early to tell. And there is also the consumer acceptance issue: Will consumers buy food that is identical in almost all measurable ways to farm-grown food – or will such food be thought of as undesirable, like GMO ? Ironically, printed foods may have unexpected allies: PETA, People for the Ethical Treatment of Animals, believes that meat produced in this way is ethically preferable to raising steers for slaughter.
  • In the biosciences, we are now developing the ability to grow replacement organs, like hearts, lungs, kidneys, livers, and so on, from a recipient’s own stem cells. We are also developing the knowledge that will gradually enable us to “turn off” cancers and some chronic diseases, and lock out infectious diseases. Such developments will further extend life expectancies, with significant consequences for both individuals and society. These developments will discussed in more detail later.
  • Alternative energy sources combined with steadily improving energy storage (“battery”) technology will create significant challenges to traditional electric power generation and grids, and may destroy their economic feasibility.[7] Rooftop solar power, in particular, threatens to be a game changer, as the price per kilowatt of capacity is dropping at speeds approaching those of Moore’s Law. In places, rooftop solar prices per kilowatt-hour are already lower than conventional electricity generation, even without including transmission or other costs.These changes threaten to disrupt the business plan of Ontario Power Generation within the next five years, before smoothly functioning alternatives are widely in place. This threatens to create power disruptions.
    OPG, as well as other electric power utilities, should take this developing trend seriously, and find ways to turn it to advantage. If they try to ignore it or block it, it could well destroy them as time and economics are on the side of the disruptive technologies.

So, it’s clear that the potential gains in using alternatives to today’s infrastructure systems will be remarkable.

However, cost is also a major issue, and for two distinct reasons. First, new technologies always start out being expensive before they come down in price, sometimes at startling speeds. This actually is solvable as long as planners are willing to wait for a technology to prove itself, and to become affordable. There aren’t usually a lot of prizes for being the first adopter of a new technology.

The second, and more difficult, cost problem is the cost of switching from the techniques we use now to the new techniques that are emerging. Hence, while autonomous vehicles may lead to massive cost savings over the long run, they would require hefty up-front investments for them to achieve those savings.

There will be other ripple effects relating to technology that I’ll deal with later – notably its effects on labour markets.

To be continued…

© Copyright, IF Research, September 2015.


 

Footnotes

[1] Swedlove, Frank, “Government alone can’t fix Canada’s infrastructure deficit”, Globe & Mail, 5 Dec. 2014, http://www.theglobeandmail.com/globe-debate/government-alone-cant-fix-canadas-infrastructure-deficit/article21966661/

[2] Ontario Ministry of Finance website, “Ontario Population Projections”, http://www.fin.gov.on.ca/en/economy/demographics/projections/

[3] Rushe, Dominic, The Guardian website, 30 Aug. 2014, http://www.theguardian.com/world/2014/aug/30/chattanooga-gig-high-speed-internet-tech-boom

[4] Van Brenk, London Free Press, 2 Feb. 2015, http://www.standard-freeholder.com/2015/02/02/rural-ontario-is-taking-speedy-internet-service-into-its-own-hands

[5]Worzel, Richard, FutureSearch blog post, “Fog: What’s Next in Computing”, http://www.futuresearch.com/futureblog/2015/05/19/fog-whats-next-in-computing/

[6] Worzel, Kit, FutureSearch blog post, “Printing the Future: The Implications of 3D Printing”, http://www.futuresearch.com/futureblog/2014/11/03/printing-the-future-the-implications-of-3d-printing/

[7] Worzel, Richard, FutureSearch blog post, “Deadly Shock: The Coming Devastation of Power Utilities”, http://www.futuresearch.com/futureblog/2014/08/31/deadly-shock-the-coming-devastation-of-power-utilities/

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What’s on Your Plate: Feeding the Future

by futurist Kit Worzel

The United Nations report on world population estimates a total of 9.6 billion people on the planet by 2050. That’s an increase of more than 2 billion in the next thirty-five years. There have been discussions on how to feed such a large population, but many of those discussions fall short on certain key points.

First off, demographics have changed in such a manner that people are not only consuming more calories, but also higher cost calories, particularly meat and dairy products. The consumption of meat has increased seven-fold since 1950, while the world population has not quite tripled. And meat is the most expensive form of food we consume, since animals need to be fed for years before being turned into food, meaning they are consuming massive quantities of food before becoming food themselves. Red meat tends to require 5 or more kilos of feed per kilo of meat produced, with slightly more favorable ratios for poultry and fish.

Second, climate is changing. This is quite evident, and California is an example of what could happen worldwide. A decade ago, California was the food basket of America. With the ongoing drought now in its fourth year, farmers in California are cutting back, closing business, or converting to less water-intensive plants, moving away from avocados, almonds and citrus fruits. With climate change being a world-wide issue, this means that farmers all around the world will have to adapt to new climate conditions in order to keep producing.

Not only will we need to plan on feeding 2.3 billion more people, but providing much more resource-intensive food as well. This will multiply the resources needed by an equivalent of 2-3 times, all while coping with the disruptive effects of climate change.The question is: How can we manage it?

Green Eggs and Ham

Meat substitutes are nothing new. They’ve been on the market, in various forms, for over a thousand years, with mentions of tofu available as far back as 965 CE, and a vegetable sausage first mentioned in the Western world in 1852. But substitutes that tasted like, and more importantly, had the texture of meat remain no more than a work in progress.

Most meat substitutes only please vegetarians, and fail to impress people who actually eat meat. But the Beyond Meat company has managed to produce a product that they claim does just that. Now, I’m not a food expert, or qualified to judge this product. But Alton Brown, world renowned chef and TV personality, is, and did just that, not being overly thrilled with the taste, but praising the texture. He said that the product, as is, could easily replace chicken in about 30% of recipes out there, and has the advantage of having no saturated fat or cholesterol. If this meat substitute can impress one of the biggest names in food in the world now, imagine what it will be able to do within thirty years?

Beyond Meat is already widespread, sold in a major retail chain in 39 American states, the District of Columbia, and Vancouver, BC. It’s completely vegetarian, and is the start of a partial solution for the high demand for meat through meat substitutes.

Tea, Earl Grey, Hot

While the replicators of Star Trek are still just science fantasy, 3D printing has come to food in a big way. Right now, it’s slow and has a host of other issues, but as technology rapidly improves, this is becoming a viable option.

High-end restaurants are already using 3D printers to make fantastic designs from sugar and chocolate as unique desserts, printing off things that no pastry chef could make. At the other end of the scale, certain nursing homes in Germany are using 3D printers to deliver a product called Smoothfoods to residents who can’t chew solid food anymore. It’s an alternative to purees, which tend to be unappetizing. Smoothfoods look much more real, but have the same consistency as a puree, thereby increasing appetites, and helping to prevent under-eating and malnutrition.

Another bonus is the ability to incorporate disliked, though nutritious, ingredients invisibly into conventional foods. Things like duckweed and mealworm are packed with nutrients, but the taste and texture – and the thought of eating them – put people off. Adding them to something like shortbread cookies makes for a pleasant eating experience, coupled with the benefits of those horrible tasting and sounding additions. Considering that even in the developed world, malnutrition is still an issue, any chance we have of getting people to eat healthy, even if we have to trick them into doing so, is a good one.

Lastly, 3D printing of food requires no skill. So in future, when you come home to make supper, you will simply select the food you want from your computer, send it off to your printer, wait for it to print, and you’re done. You’ll be able to program a pizza at home with no more effort than ordering for delivery.

You can always tell a happy motorcyclist…

It won’t just be folks who ride Harleys that have bugs in their teeth if this next idea comes to fruition. Entomophagy, or eating insects, is already a source of protein for more than a third of the world, but certain green factions are pushing for fried grasshoppers to be sold on every street corner. The arguments are strong: to produce 1 kg of usable meat requires between 7 and 20 kg of feed for a cow, depending on breed and type of feed, but only 2.1 kg of feed for crickets. Cricket meat is also lower in saturated fats and cholesterol, and seems to be a greener alternative.

Of course, the natural reaction for the vast majority of the world when they see a bug on the plate is to scream and try and get rid of it. The disgust reflex is hard to overcome, so food producers are looking for a work-around. Producing cricket-flour, or converting bug meat into innocuous cubes is a start, but there are some who look to historical precedent.

More than a century ago, lobster was considered low-class, and it was illegal to serve it in prisons, as it was considered cruel and unusual punishment. Now it’s one of the most expensive things on the menu, after receiving one hell of a PR makeover, and there are those who seek to do the same for bugs. It may be a hard sell today, but if the choice is between eating insects or starving, then pass the grasshoppers.

It’s alive, IT’S…not quite?

Lab grown meat was in the news a few years back, when a team from Maastricht University in the Netherlands produced a burger that was cultured from beef muscle tissue. The flavor was disappointing to the designated tasters, but the texture was spot-on, which was the more important issue. The team that developed the burger says they can add fat to the culture to make it more flavorful. Of course, the other memorable part of the story was that a single 5 oz burger cost $330,000 in US funds, so don’t expect to order one from a fast-food joint anytime soon.

One of the best parts about it is that it’s real beef, and you don’t have to kill a steer. The folks in the lab can play around with the level of fat to make it taste right, and also determine how healthy it is. And they’ve managed to lower the price. The proof of concept may have cost almost a third of a million dollars, but they’ve managed to lower the cost all the way down to $12 for that same 5 oz burger. What they haven’t managed to do is produce it quickly, or in large quantities yet, and they are still estimating decades to iron out the process.

Something said for doing it the old-fashioned way

All of these techniques and technologies are interesting, but none of them can work without resources. We still need farms to grow the produce used, particularly for 3D printers and meat replacements. None of the plans mentioned above are enough on their own. If anything, they are enhancements of a more traditional farming paradigm, instead of replacements. Farming will change, that is unquestionable, but it will still exist. We won’t feed 9.6 billion people with crickets and lab-grown meat alone. Farming will become less labor intensive, more frugal with water and electricity, and will likely have many other changes as well, but that’s a topic for another blog.

Making room at the Table

The bottom line is that we have the resources and know-how to produce the food needed to not only feed this growing planet, but keep everyone happy in doing so. There will still be challenges in growing the food, and distributing it, but the hurdles we have yet to face seem smaller in light of a world where the perfect-tasting cricket and tofu burger is just the push of a button away.

© Copyright, IF Research, September 2015.

Links:

Beyond Meat – Alton Brown review

http://www.wired.com/2013/09/fakemeat/

http://beyondmeat.com/

Meatless History

http://www.soyinfocenter.com/books/179

Tellspec food tricorder (not yet on the market)

http://tellspec.com/team/

3D printing food

http://www.digitaltrends.com/cool-tech/3d-food-printers-how-they-could-change-what-you-eat/

http://www.theglobeandmail.com/report-on-business/rob-commentary/is-3-d-printing-the-future-of-global-food/article24981139/

Cloned Meat

http://www.fastcoexist.com/3044572/the-325000-lab-grown-hamburger-now-costs-less-than-12

http://www.gizmag.com/cultured-beef/28584/

Smoothfood

http://www.wired.co.uk/news/archive/2014-04/11/eu-3d-printed-food

Eating Bugs

http://time.com/3824917/crickets-sustainable-protein/

http://www.theguardian.com/environment/2014/jul/06/will-eating-insects-ever-be-mainstream

http://www.iflscience.com/environment/will-we-all-be-eating-insects-50-years

http://www.theguardian.com/sustainable-business/eating-insects-yuck-factor-un-report

World population projected to be 9.6 billion by 2050 by UN

http://www.un.org/en/development/desa/news/population/un-report-world-population-projected-to-reach-9-6-billion-by-2050.html

Meat limit

http://qz.com/93900/we-produce-6-times-more-meat-than-we-did-in-1950-heres-what-that-means-for-animals-and-the-earth/

 

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What’s Wrong with Medical & Drug Research?

by senior futurist Richard Worzel, C.F.A.

Suppose you were a high school teacher who had just taken a job at a new school, and that you agreed to take over as the coach of the basketball team. You look at your new school’s team record, and find that it’s pretty mediocre, so decide you want to try something new. New school, new ideas – why not?

After looking around and thinking things over, it occurs to you that perhaps there’s a relationship between the kinds of shoes the players wear and how well a player does – and hence how the team fares. After all, a casual observation of the kids on the floor seems to show that those who have better shoes score more.

Since you have such a small sample of kids, you reach out online and get data from dozens of schools around the country, outlining what kinds of shoes their players wear, and how well they perform.

Once you start to analyze the data, the results are confusing. Some schools provide shoes, which are all the same brand, and the players do particularly well, but other schools that do the same do not. Some brands seem to have a slight correlation with good performance, but nothing that’s really enough to hang your hat on. There are hints of some kind of relationship, but nothing really powerful. In confusion, you take your results to one of the science teachers, whom you have befriended since your arrival.

She looks over the data, asks a couple of questions, then says, “Why don’t you look at how tall the players are instead of what shoes they wear?”

In my view, medical research is like that.

Is Butter Bad for You?

You’ve undoubtedly seen conflicting reports about food, for instance. Butter’s bad for you, says one, because it has saturated fats that increase bad cholesterol; you should stay away from butter and eat margarine. No, says another, margarine contains trans-fats and chemicals; butter’s natural and better for your body, so you should eat butter. You’re both wrong, says a third study: cholesterol is irrelevant, it’s all been blown out of proportion, so it doesn’t matter whether you eat butter or not.

None of these kinds of studies talk about the relationship between individual genetics and the studies that are performed. Yet, in my opinion, that’s like ignoring the height of basketball players in trying to identify the factors that relate to success in the game.

Suppose, for instance, that one group involved in a study on the effect of butter accidentally happens include a lot of people who respond badly to butter, for whatever reason. Then the study will conclude that butter is bad for people.

Another study, with a different group of people, may have accidentally included people whose reactions to butter are all over the spectrum. This study will conclude that butter is irrelevant to health.

And a third group may have an unusual number of people who respond well to butter, or who respond badly to margarine. This study, then, will conclude that margarine is bad, and butter is good.

All of these studies would miss a fundamental issue: the importance of genetic differences. And that will invalidate their findings. Worse, from a layperson’s point of view, it gives contradictory signals, and erodes confidence in medical research.

The Implications of Genetic Testing

Genetic testing is still in its infancy, so that even though it has already taken enormous strides, there is still a tremendous amount we can and eventually will learn from it. It will take time for research to come up with clear indications of how particular foods interact with an individual’s genetics, but eventually you’ll be able to get an analysis of your DNA (for less than, say, $100), that will tell you how different foods will affect you.

Some foods (like leafy, green vegetables) will be great for you, and are ones you should eat regularly. This will be your “A” list. Some foods (like fish, chicken, and whole grains) will be good for you, but should be eaten in moderation (the “B” list). Some foods, like hot fudge sundaes, red meats, and white breads, you can eat occasionally, but shouldn’t eat often – this is your “C” list. And some foods may be positively harmful to you, say if you have an allergy to nuts or dairy products, or a food sensitivity to things like wheat gluten or corn. This is the “X” list, and you should always avoid everything on it.

Each list will be different for each person, although there will be large areas of overlap. I doubt, for instance, whether hot fudge sundaes will be on anyone’s “A” or “B” lists. I suspect that genetic variations will probably show the greatest differences in each person’s “X” list, which spells headaches for foodservice organizations, which already have long lists of allergies of which they need to be aware.

The same will apply to other environmental factors, such as the adhesives used in laying carpet, or particular kinds of trees, flowers, or aromas. This may eventually change how you decorate your house, or even which materials you use to build it.

As a result, genetic analysis will affect a broad range of industries, from farming through foodservice, to builders and construction companies, to schools and public institutions, and many more. In fact, I suspect that the more we learn about our genomes and how they work, the more aware we will be of things that have affected us, perhaps without us ever knowing about them.

Imagine, for instance, that we didn’t know that some people are allergic to ragweed or pollen. We’d be mystified by their symptoms. It’s this kind of revelation that we will consistently stumble upon as we learn more about how our bodies (or, more accurately, our biomes) interact with our environment. It will be both revolutionary, as new discoveries lead to blazing insights, and evolutionary, as we learn how to make adjustments in diagnosis and treatment for ever-smaller groups of individuals.

But one industry is already being shaken to its core: pharmaceuticals.

What’s Ahead for Big Pharma

We already know, from drugs like Herceptin, that genetic testing can make an enormous difference in the value and effectiveness of a drug. Herceptin can be very effective for certain kinds of breast cancer – but only if the patient has a particular genetic pattern. Otherwise, the only thing Herceptin will do for them is to empty their wallets.

The ironic part about Herceptin is that it was originally slated to be dropped because it wasn’t effective enough across a broad spectrum of patients. It was developed by drug company Genentech in cooperation with the University of California at Los Angeles (UCLA). Yet, once prospective patients were screened for a particular receptor, the results were remarkably improved. Hence, a drug that was going to contribute only to the cost of failed drug research wound up being a big money maker for Genentech and UCLA.

But until very recently, Herceptin was largely an exception. There are a few, but only a few, other stories like it. And this is largely because genetic screening didn’t fit the business model of Big Pharma.

Until they accepted the inevitable, major drug companies needed to sell millions of doses for billions of dollars with big, blockbuster drugs. They more or less had to do this because they are so big that smaller drugs wouldn’t move the needle on their revenues and profits. Without big increments in income, Wall Street, with its miniscule attention span, gets restless about drug company results, and hence, with drug company managements.

The problem, therefore, with genetic screening is that it can take a drug that either isn’t very effective, or has unacceptable side effects – the two biggest reasons why drugs are dropped after years of development – and turn it into a modest success. Such drugs, once given only to the appropriately screened patients, will either prove to be very effective, or not have anywhere near the side effects that it would have on a broader group of patients.

But Wall Street isn’t interested in modest successes. The problem is that the screened drugs will sell to a much smaller potential market, with tens of thousands of doses bringing in tens or hundreds of millions of dollars in revenue – which isn’t enough. Yet, despite this, some drug companies are changing as they get into synch with the broader underlying knowledge of genetics.

Why New Drugs Are So Costly

I believe Big Pharma was ignoring a real opportunity, because revenue is only half of the profit equation.

Coming up with a figure of how much it costs to develop a successful new drug from scratch is difficult and controversial. I’ve seen numbers that range from $800 million to $1.2 billion per drug, and those estimates are several years old. These figures are controversial partly because the drug companies have a vested interest in pumping them up as a means of defending the high prices they charge for new drugs. Hence, a big number is politically more useful than a smaller one.

Yet, no matter who does the counting or what their motives are, it is still true that it’s very expensive to develop a new drug. And one of the biggest expenses in drug development is discarding drugs that seem promising, but don’t prove out for some reason.

Before approval, drugs go through several stages, from lab tests, to animal trials, to four stages of human trials. Each stage of the development and approval process is significantly more expensive than the ones before it. Yet, a drug that fails in human clinical trial Stages III or IV has incurred substantially all of the costs of drug discovery, and usually fails because it is either not as effective with a broad spectrum of people as earlier stages indicated, or because unacceptable side effects (up to, and sometimes including death) are more prevalent than expected.

So drugs that get to Stage III or IV clinical trials have shown that they have a high probability of being valuable. If they fail at that point, they represent the highest costs in the entire drug development process.

Why Lower Sales May Be More Profitable

As the drug companies start to do genetic screening while drugs are being started in human trails, they will inevitably rescue many of the drugs that fail late in the process – and save themselves the huge development costs involved. This would mean that although their revenues per drug might fall by a significant amount, so, too would their costs. In other words, their revenues might go down, but their profits could go up.

That’s not the model that Big Pharma and Wall Street have liked in the past – but increasingly that’s the way that drug development is going. And research results could be improved further by using novel data searching techniques, such as evolutionary algorithms, to further lower development costs.

But first more drug companies have to accept that the old business model is dying, and that the tools that are now emerging should be used to create a better, more profitable model.

And, as our understanding of how our individual genetics interact with our environment, at the very least we’ll find out whether we should be eating butter or not.

© Copyright, IF Research, September 2015.

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Paying the Water Piper: The Future of Water, Part III

by senior futurist Richard Worzel, C.F.A.

This is the third blog about water. The first two can be found here and here, plus a blog about California’s water situation can be found here.
—————-

Fresh water is vital, and we’re running out of it. Water shortages will disrupt economic plans, sap economic vitality, increase costs, and cause friction and disruptions that range from disagreements between communities to outright war. Yet, despite all this, very few people pay much attention to water. Indeed, as Steven Solomon, author of the frightening book Water, summarizes the issue:

Despite its growing scarcity and preciousness to life, ironically, water is also man’s most misgoverned, inefficiently allocated and profligately wasted natural resource. … Almost universally, governments still treat water as if it were a limitless gift of nature to be freely dispensed by any authority with the power to exploit it. In contrast to oil and nearly every other natural commodity, water is largely exempted from market discipline.[1]

Water is a perfect example of bad habits and bad planning. We have become so used to thinking of water as free that we have fashioned our lives and economic policies on that basis. Yet, even as we run low on water in places, our reaction is to throw temper tantrums because we think of free access to water as a natural right. Of all the commodities that are subsidized by governments, water is the most explosive.

And we are seeing the signs of strain almost everywhere, starting with the Middle East, including Israel, and then on to India, China, most of the African countries, and many other rapidly developing countries as well. But it’s not limited to developing countries; we have problems of our own in the rich world that we will have to deal with.

In America, the Southwest’s growth will depend on its ability to buy enough water rights to allow further growth in its Sunbelt, which attracts retirees from the colder states farther north. The farmers of the Central Valley of California claimed that the historically cheap rates that they used to pay for water, plus their almost unlimited access to water, were theirs by right, and complained bitterly when they are forced to sell water rights to allow California cities to grow, even though the farmers made billions of dollars in profits by doing so. America’s cities are also facing water problems, and not necessarily because of a shortage of fresh water, but because they have consistently underinvested in the infrastructure to gather and deliver it to their residents.

New York City: A Good News Story About What Intelligent Planning Can Accomplish

New York City is a good example of this, but fortunately a good news story as well. They have surprised everyone, perhaps even themselves, by managing to update an ancient and failing water system after decades of delay and dithering. They were supplied by three aqueducts: the gravity-fed Croton water system drawing water from the upper reaches of the Delaware River and the Catskills, which opened in 1842; and Tunnel 1, built in 1917, and Tunnel 2, built in 1936, both of which drew water from upstate New York.

After being prodded into action by tougher drinking water standards in the 1980s, New York invested something in excess of $7 billion to upgrade their water filtration and delivery systems – and possibly just in time to save the City from a disaster. Some say that had their existing water infrastructure failed prior to their new system coming online, which was a very real threat, it would have produced a disaster far worse than 9/11: the complete inability to provide drinking water to a large fraction of the city’s population, rendering huge chunks of the City uninhabitable. How can a major city exist without drinking water?

The Situation Is Getting Critical

And it’s not just a money issue, either. By overdrawing water from aquifers, we are destroying or contaminating many of them. Some aquifers, when they are overdrawn, actually crack and collapse, and cannot hold anywhere near as much water as they previously did. In other cases, when the water level falls too far, groundwater seeps in that has been contaminated with runoff pesticides from farms and golf courses, plus bacterial contamination from animal farms and human cities, rapidly reducing the usable freshwater available from that source.

The situation in many parts of the world is getting critical, and it’s hard to generalize where. Some areas, like India and the Middle East, are going to experience widespread water problems and shortages. In America, there may be large areas that are affected, like the Southwest and West, but the problems may also skip from one community to another, according to the state of their water infrastructure and investment. What is clear is that the way we use water now is unsustainable, and we will be forced to spend huge amounts of money to remedy our sublime ignorance of the facts.

The good news is that we have a lot of leeway to deal with water shortages in part because we have been so wasteful in our use of it. Merely improving our efficiency would probably be enough to solve many of our problems.

For instance, in farming, Israel has pioneered the use of drip irrigation, which delivers water directly to a plant’s roots, along with computer monitoring of soil moisture so as to deliver just the right amount of water at just the right time. This, combined with the recycling of wastewater, has allowed Israeli farmers to double or triple crop yields per gallon of water.

Likewise, there are other solutions to other forms of water waste, such as New York City’s preservation of parkland in upstate New York to naturally filter water that runs into their reservoirs, rather than to build massive – and more expensive – industrial filtration systems.

Overcoming the Yuck Factor

And I can give you one simple way that cities can implement (relatively) quickly and cheaply to increase the amount of water available to their citizens: recycle sewage into potable water. Yet the “yuck” factor, as it’s called, is likely to cause politicians to avoid this, even though the technology is well known and has been proven through decades of space flight. As astronauts say, “We turn yesterday’s coffee is tomorrow’s coffee.”[2]

Yet, of all the problems we face with regard to water, the biggest is that we will have to adopt a very different way of thinking about water, and a major change in government policies around water to solve our looming problems. In particular, we will have to start charging what it costs to supply water, and that will cause major protests among most of the world’s population, including here in the rich world. As well, we will have to invest huge amounts of money in water infrastructure at a time when investment capital is going to be hard to come by. That spells trouble, because we don’t have a choice where water is concerned. We have to spend the money because we can’t live without it.

When water runs out, people behave badly. They never expect the taps to run dry; it’s not a possibility they even consider, so it quickly becomes a major crisis. But it will happen with increasing frequency everywhere, and may prove to be a significant limiting factor to food production, economic activity, and standards of living. Worse, water will become the cause of economic, political, and even military conflict.

What water will not be is free. It won’t even be cheap.

© Copyright, IF Research, July 2015.

[1] ibid. p.376.

[2] Howell, Elizabeth, “Yesterday’s Coffee”, http://www.universetoday.com/110683/yesterdays-coffee-drinking-urine-in-space-could-preview-mars-exploration-techniques/

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Overdrawn at the River Bank: The Future of Water, Part II

This is the second of three posts about the future of water. The first can be found here.

by senior futurist Richard Worzel, C.F.A.

Water scarcity has several causes, all of which compound each other. First is that of the freshwater available above ground or from precipitation, most of it is either located far from where people want it, or it falls at times and in ways so it can’t be adequately used, such as in torrential rainfalls or blizzards.

Hence, for instance, Canada is a freshwater heavyweight. With ½ of 1% of the Earth’s population, it has about 7% of the world’s renewable freshwater supplies, or about the same amount of freshwater as all of China, which has 20% of global population. But while 84% of Canada’s population lives within 100 miles of to its southern border with the United States, over 60% of its freshwater supplies are far north of that, flowing up into the Arctic Ocean.

Beyond these naturally occurring barriers to the world’s fresh water, there are more recent developments that are tightening the water supply. Climate change is raising temperatures in many places, which puts more water into the atmosphere through evaporation and clouds instead of on the ground. It also changes rainfall patterns, which means many dry climates, such as California’s, are getting drier. It is changing the monsoon season in India, where agriculture is dependent on getting just the right amount of rain at the right times, so a changed monsoon season will leave it with either not enough rain, or with flooding, which quickly runs off. Either would severely restrain food production.

Water Abuses

Agriculture is a major factor in water mismanagement as well. Although there are a few farmers who use water wisely, in most of the world farmers abuse water supplies, as when they use it in open-ditch, or large-scale spray, irrigation schemes that can lose half of all the water allocated to evaporation before it ever reaches the crops being “watered.”

Our rising standard of living hurts as well, because, as with energy use, there is very strong correlation between how well we live, and how much water we use. The global trend towards greater urbanization hurts, too, as major urban centers not only use more water per person than rural areas, but waste more of it through aging, leaky infrastructure. In some places in India, for example, it’s guestimated (because nobody really knows) that perhaps as much as 40% of all the water that flows in municipal pipes leaks into the soil before it reaches users. But because water pipes are invisible, no one can see the problems developing or can tell precisely how bad they are. And no one wants to pay more taxes to maintain invisible infrastructure. As a result, water mains are in poor repair almost everywhere, in rich and poor countries alike.

And because surface water is not being used well, farmers, cities, and industry are all pumping a steadily increasing amount of water from underground aquifers. The problem here is that in many cases, these aquifers represent fossil water that has been deposited over periods of thousands or millions of year, and are replenished as slowly, if at all.

The Ogallala aquifer, also called the High Plains aquifer, for example, is one of the largest in the world, and runs through eight American states: Wyoming, South Dakota, Colorado, Kansas, Oklahoma, Texas, and New Mexico. It provides approximately 30% of the water used for irrigation in the United States, as well as more than 80% of the drinking water for the people within its boundaries[1]. Yet, while the water level of the Ogallala is estimated to drop by five feet or more per year in places, it is replenished at an estimated rate of about one-half an inch per year.[2]

Nor is this unusual. In the year 2000, the residents in the basin of the Jordan River in the Middle East used 3.2 billion cubic meters of water, but received only 2.5 billion in rainfall, drawing the remaining 22% from the regions’ aquifers. (Three of these aquifers are on Palestinian lands in the Israeli-occupied West Bank, and the other in coastal Israel, all of which aggravates the political instability and acrimony in the region.)[3]

But perhaps the clearest example of the problems with the future of water comes from India, which has 17 percent of world population, but only 4% of freshwater supplies. There, in the breadbasket regions of Punjab and Haryana, the water table or aquifer is falling by 3 feet a year because of human withdrawals. In the drier state of Gujarat, the water table is falling anywhere from 50 to 1,300 feet a year. No other country in the world pumps as much water from their underground water supplies. As Steven Solomon, author of the remarkable and distressing book, Water, puts it, because of government policies encouraging the careless and profligate use of water, India is, as a nation, committing what amounts to “slow motion hydrological suicide”, with the result that:

Food produced from depleting groundwater is tantamount to an unsustainable food bubble—it will burst when the waters tap out. One warning occurred in 2006 when, for the first time in many years, India was forced to import large quantities of wheat … textile plants have been forced to shut down, and information technology companies have moved away from Bangalore, over water shortages and undependable supplies.[4]

Scapegoating Instead of Acting

India is a clear-cut case where water shortages changed a food exporter into a food importer in order to import “virtual water”, and where industries were forced to move because of water shortages. Partly as a result of growing water shortages, India decided they needed to take action – and did so by fingering foreign corporations as official scapegoats.

Coke and Pepsi are high-profile global companies whose products are water-based. India revoked their licenses to draw water from local supplies on the grounds that they were responsible for the region’s exhausted groundwater. The two companies were eventually forced to adopt a policy that will, over time, become widespread: that of becoming “water neutral.” They have managed to find ways of restoring to community water supplies as much water as they draw from them, which is a remarkable accomplishment, and one that all major corporations should keep in mind in their long-term planning. Water neutrality will join carbon neutrality as a desirable objective, even a mandated one.

But this is also a good example of another aspect of our future: scapegoating, deception, double-dealing, and theft. The history of water is replete with individuals, communities, states, and countries scheming to take possession of scarce water supplies at the expense of their neighbors, from Egypt to Turkey to Texas to China and beyond.

Indeed, at least one military conflict was acknowledged as being caused by water. Ariel Sharon, former Israeli prime minister and a former military commander in the Six Day War of 1967, commented that “In reality, the Six Day War started two and a half years earlier on the day Israel decided to act against the diversion of the Jordan [River]. While the border disputes between Syria and ourselves were of great significance, the matter of water diversion was a stark issue of life and death.”[5]

I have one more blog post about water for now, which I’ll put up next week, about how we are are reacting to the coming water shortages.

© Copyright, IF Research, July 2015.

[1] Wikipedia website, http://en.wikipedia.org/wiki/Ogallala_Aquifer.

[2] Solomon, p.345.

[3] ibid., p. 401.

[4] ibid. pp.423-4.

[5] ibid. p.402.

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