Insights November 26th, 2020
This past year I spent time searching for the signals of change that indicate that the world is evolving and shifting. And, during the pandemic in 2020 I have been tuning into so many things that are reshaping the world – from mass digitization to the changing energy landscape.
I have identified three areas to get you thinking broadly about the implications of actions of ourselves, our communities, nation states, and companies. I do not aim to be extensive in my analysis or provide complete rationale – that comes in the year following the publishing of these ideas as I track the signals of change around each.
I’m calling 2021 The Year of Transcendence. We are becoming something more aware, more empowered and on a knife’s edge where one wrong turn can lead to deeply challenging times.
We are in collapse – and have been for hundreds of years – and we need a way out. Maybe the areas I discuss here will aid in the ascension out of that? There are three areas of focus that I will spend time researching and advising clients on through 2021:
- Shifting platforms and algorithms
- Transcendent social media
- Water-Food-Energy: Emergent geopolitical theatres
Let’s look at the third area – Water-Food-Energy: Emergent geopolitical theatres.
The third trend area I am tracking is more existential and essential than the first two. It’s about resources vs. information and networks. It’s old world and the constituent elements are being manoeuvred into position to political gain and populace control.
2021 will see the acceleration and public recognition of global ‘Resource Wars’ – water, energy, and food.
Each will become a more important foundational chess piece for the geopolitical struggle and global unrest that start to gain pace through investment, R&D and innovation. Of course, these will also be linked to climate change and what I outlined in my 2020 predictions.
Water is the driving force of all nature.
Leonardo da Vinci
70% of the earth is covered in water and only 1% of that water is usable. Most water on the planet is either saltwater or locked away in glaciers so there is scarcity. That drives demand, which drives prices, which drives political discourse and the need for control. And, with an expected 6 billion people suffering from clean water accessibility by 2050 and droughts increasing in severity, water will grow more and more valuable (source).
Global water demand for all uses, presently about 4,600 km3 per year, will increase by up to 30% by 2050, up to 6,000 km3 per year. So, we need to follow the nexus of water with both food and energy. The three of them are interlinked, interdependent and make up what I call emerging geopolitical theatres.
Canada will transcend to be a world water superpower because we have about 20% of the planet’s freshwater resources, sits astride the largest freshwater body of water in the world — the Great Lakes. This is good for us but we need to determine how best to manage these resources and share them with the world. Water tankers replacing oil tankers to address drought in other regions – maybe – and with nefarious business models potentially.
The water-agriculture nexus, and the demand of water to grow food to feed the planet will increase by 60% by 2025 and with that comes the opportunity to invest in water-rich farmland away from large governmental and infrastructural limitations. Michael Burry – yes, the investor featured in the film ‘The Big Short’ – won out of the back of the subprime crisis and he’s going deep into water (source):
“What became clear to me is that food is the way to invest in water. That is, grow food in water-rich areas and transport it for sale in water-poor areas.”
On top of this, the technology of food production has become one of the most exciting areas I speak about and it truly touches every part of our lives, much like water. I am seeing significant effort and investments into the following areas of R&D and exponential growth:
- Farmer social, content, and trading platforms;
- Electrification of farm machinery and use of sustainable power;
- Automation through self-driving, small robotics and swarm farming;
- The extensive use of the Internet of Agricultural Things to optimize usage of water, fertilizer and other resources;
- Better tracking of logistics through blockchain-based systems;
- Cultivating protein and the rise of plant-based foods;
- Vertical farming, aquaculture and uban-based farming;
- And other areas.
Global tech players will not likely step up to try and master the business of water (initially) however they are stepping forward in areas of food production as it gets more technical.
I expect there to be a boom from 2021 to 2025 in agritech, and with that disruption to the very nature of how it works globally. Governments will be slow to act so start to see their concern rise post-2021 and look for signals in investment, R&D, and consumer preference changes through 2020.
Lastly, there is the water-energy nexus.
The International Energy Agency (IEA) states that “by 2035, the world’s energy consumption will increase by 35%, which in turn will increase water consumption by 85%.” (source), and there expected to be a projected 40% shortfall of available water across the globe by 2030 with an effect on 98% of global electric power generation.
Renewable energy technologies, providers and networks will need to be invested in. I want to make it clear at this point. Renewable energy for me is solar, wind, run of river, and geothermal heat.
Note: I do not consider nuclear-generated power to be a future-proof solution. Regardless of the investments and new technologies I feel that nuclear just will never truly be cheap enough nor safe enough to provide a foundational energy source that is worth the risk to create harm on life and the environment. (This opinion tends to upset many – so be it).
By 2040, renewable energy sources will make up 75% of the $10.2 trillion invested (source) and the game changer within the energy industry will be not how we generate it but how it, but how it is transmitted. In 2018 Achim Steiner, Executive Director of the UN Environment Program stated, “By the year 2050, electricity generating industries will no longer be charging for electricity. They will simply be trying to recover the return on capital expenditure.”
So, focus switches to the grids, or the future secured through ‘Super Grids’ distributing clean, abundant renewable energy. Super grids are wide-area transmission networks, generally trans-continental or multinational, that make possible the trade of high volumes of electricity across great distances.
The Asian Super Grid (ASG) is one to carefully watch and it’s born of big tech thinking. In 2011, Masayoshi Son, founder and visionary of the SoftBank Group, came up with the idea of interconnected energy after seeing the devastation at the Fukushima Daiichi nuclear plant following the 2011 Tohoku earthquake. Son, and his partners, founded the Renewable Energy Institute soon afterwards to help develop and promote renewable energy and to start the establishment of the ASG to connect China, South Korea, Taiwan, Mongolia, Russia, and Japan. The energy will be provided using solar and wind power generated in Mongolia as the main power supply.
This is a welcome development as super grids could support a global energy transition to clean energy and it will be a key technology to mitigate global warming. And, the global energy industry – with the potential to be a significant employer – will be the biggest industry by 2050 (I predict) and control of it will be on the chessboard of global geopolitics.
This idea is contagious – and sound business sense – and we see a collaboration between EU member-states, UK and Norway to create an integrated offshore energy grid to link wind farms and other renewable energy sources across the northern seas of Europe in the North Seas Countries Offshore Grid Initiative (NSCOGI).
The real truth of the matter here is that China and the European Union will become the game changers in the arena of energy production and will forge strong alliances between themselves to do so.
Countries that don’t step forward (most likely those looking backwards at fossil fuels and nuclear as energy solutions) will likely be left behind and even annexed by those country networks (created through political alliances) providing energy. These energy and geopolitical networks will create incredible friction and challenge the ideas of organizations like the United Nations, World Health Organization as well as the International Monetary Fund.
I personally believe that if Canada and the USA do not step up efforts to create renewable energy infrastructure and the ability to plug into super grids then they will be left behind from a supply and political power perspective. And, come 2030 a movement towards annexation of North America – especially by China and its Asian-Russian allies – could become a reality.
If you’d like to discuss this and other areas of research and concern then reach out to Nikolas to book a call.