Resource scarcity

According to Bruce McIndoe, president of McIndoe Risk Advisory, there are five megatrends that will shape the future of business and the world: globalization, demographics, climate change, resource scarcity, and technology innovation. Each are interlinked and influence global supply chains as the world supports a growing global population.

McIndoe briefly described these trends: 

Globalization: As a result of an uncoupling movement between the U.S. and China and vulnerabilities in the global supply chain that the pandemic exposed, there will be a shift to deglobalization via onshoring or nearshoring.

Demographics: As we add two billion more people in the next 30 years, we’ll need more water, food, and housing to support them.  It’s estimated that 80% of these new citizens will live in cities and by 2050 we’ll see cities with 50-to-100 million people. Based on urban density, growth of the middle class, and climate change, we’ll need to build an excess of 1 billion more housing units.   “In the next 30 years, we essentially will need to rebuild the entire global housing stock since the beginning of mankind. That is a huge demand,” McIndoe said.

Climate change: This can ultimately become the weak link in the supply chain. The greater frequency and severity of climate hazards create more disruptions in the global supply chain by interrupting production, hampering transportation, raising prices, and ultimately hurting corporate profits.

Resource scarcity: Here, we are the issue—humans are massive consumers of natural resources, and by 2050 we will consume 140 billion tons of minerals, ore, fossil fuels, and biomass per year. That’s three times the current consumption rate. We must decouple economic growth from massive resource use, McIndoe said. In addition, water and food are life or death resources for all of us. Lack of access to water has been catalyst to war and will be a major driver for human migration—which creates friction and unrest. Lack of access to food, too, can drive people to be aggressive which can evolve into civil unrest.