Just look at the items and even groceries around yourself. Most of them are shipped over a large distance just to get to you. It is not only about the products we consume daily but it is also about ourselves. We are usually located in areas where we have our job. Often we live in cities as we find most of the jobs here. The location of a warehouse is usually dependent on the infrastructure nearby. How far does the product need to travel to get to the customer?
We see infrastructure hubs in every country in the world. This is also the place where most local or international companies locate their headquarters. Companies try to keep the distance between products and customers as low as possible. This is true for businesses as well as it is true for private persons like you and me. People want to have a supermarket nearby. We want to get a spare part for our house or car at a local store we don’t want to travel 100 kilometers for it. The higher the density in cities the less it costs to move raw materials, finished goods and labor.
But would we still live where we live today if we can work from wherever we would like? If we could get all our products we want and need without living nearby a city? Would current business models still make any sense if people could work from anywhere?
The Change Already Began
We see huge investments in technologies which are going to lower the cost of distance in the future. Those technologies include robotics, autonomous vehicles, 3D printing, delivery drones, and even low-Earth-orbit (LEO) satellites. Major companies dedicate a lot of their R&D investments into autonomous cars and trucks. The price of shipping products and moving people will become cheaper if necessary at all.
The Way we see Distance will Change
The economy of Western countries is mainly service based. Upcoming technological changes will even shift more in this direction. But nevertheless, we are still living in dense cities although this would not be necessary anymore. Over the next 10 to 20 years we will probably see a change in how we chose our home. Will you live in the city center or in a rural town nearby? People who prefer rural areas but who do not like to commute daily will choose the city in favor of rural villages. Will this choice still be necessary for our future?
Low-Earth-orbit satellites will bring us high-speed internet connectivity to every place in the world. Drones will deliver us daily needed products cheaper and faster. Autonomous cars will make the commute to the city center as pleasantly as sitting at your desk or in your living room while avoiding traffic jams. Companies will see no real reason anymore to settle in a city center in favor of a rural village. The cost of distance is minimized and the internet connectivity is equally good. Employment options, as well as goods and services, will become as available in rural areas as the former were in big cities only.
Advances in 3D printing will make small-scale production in shops profitable. It will not be necessary to produce items on a huge scale in huge factories (oftentimes in foreign countries). The final production of your next smartphone could take place in your living room. Spare parts for your car could be printed in a 3D print shop in your neighborhood.
Don’t Ignore This Change
All those changes will, of course, bring with them a change in our own lifestyles. Millions of people will lose their jobs for example truck drivers and taxi drivers. Companies who have warehouses located in infrastructure hubs will soon see a drop in their equity value. To ensure future business success and to ensure to go ahead as a leader managers need to think about those upcoming changes now.
Have a look at alternative production technologies like 3D printing. Look at how you could use delivery drones for your product deliveries. How could you use autonomous trucks to make your fleet efficient? Look for a future location of your headquarter. Outsource some of your labor to freelancers or allow your employees to work from home.
Companies will be able to afford production on a small scale, high-speed internet connectivity will become available to everyone, and the cost of transport for both, individuals and companies, will fall sharply.
New Business Models
New business models and new services will emerge from technologies like 3D printing, autonomous driving, and drone delivery.
Cloud-based work collaboration will become common as the high-speed internet will be available nearly everywhere in the world.
3D Printing will kill warehouses and complex logistic operations
3D printing will enable new business models. We will be able to print the final product at home or at in a small printing shop nearby. Right now it is necessary for businesses to have large warehouses for their inventory. 3D printing will allow companies to print products, parts, and complex items on the site and the need for large warehouses will be gone. 3D printing is already on its way to being an alternative to traditional manufacturing processes. 3D printing will approximately take off during the next decade.
UPS already offers 3D printing services in the US. UPS is looking forward to soon serve more than 100 3D printing stations. Today inventors, entrepreneurs, and small business owners can print their prototypes in selected UPS shops.
3D printing shops will be all around our neighborhoods soon. The final product will not be shipped all around the globe through different warehouses with trucks, ships, and planes. We will be able to simply visit our nearby 3D print shop and pick up our printed product. This will even make the production of single products profitable
The Internet through Fiber Cables and LEO Satellites
In most big cities high-speed internet connections are already available thanks to fiber cables. But most rural areas where fiber cables are not available will soon have high-speed internet by LEO satellites. Iridium, Google, SpaceX, Virgin, and WorldVu are companies who already develop LEO satellites to bring super high-speed internet to every centimeter of the world. It is estimated that the first commercial LEO satellites will launch by the end this decade.
The super fast internet is not only necessary to work remotely for cloud-based companies but also essential for autonomous driving
Autonomous Driving and Drones
Ultra-fast internet will become available by the end of this decade. Driverless cars and trucks need this connectivity for real-time communication. Driving assistance like Tesla’s autopilot is already available today. Fully autonomous driving will emerge when the necessary super fast internet connectivity will become available. Autonomous vehicles will not only make our daily commutes a lot simpler but they will also play a crucial role in the autonomous delivery of goods and services. Cars will go shopping for you. Cars will drive your children to school. Cars will pick you up when you are drunken.
The combination of driverless vehicles and drones will make the delivery of everyday goods super fast. Delivery by drones is already today around 70% to 80% less expensive than a delivery by humans. Delivery drones are already developed by companies like DHL, UPS, and Amazon but the legal regulations still forbid the use of them.
Would you still go to the mall or to grocery stores when everything you need will be delivered within minutes for free to your door? How much time will this save you? Post in the comments and I will join the discussion!