The Hot War: In Business At The Front Line

climate_change.jpgThe “Cold War” pitted developed nations against each other for a half-century, sustained by a small number of corporate surrogates who designed and supplied defenses. The “Hot War” era now emerging is driven by serious and immediate resource shortages and climate change at a global scale: things indivdual governments are very poorly positioned to control. The “Hot War” era will pit large corporations and small businesses against each other with great intensity of competition. As in recent times, occasionally corporations will band together to use national governments as surrogates in this struggle, advocating policies scripted by a Cold War era progeny called the “Think Tank”.

Note: since the Red Scare passed, several Think Tanks have been reincarnated as “anti-Greens.” Lately, the term “green baiting” even entered our lexicon (try Google if you doubt it). But this ideological push back is mere noise compared to the economically more significant struggles to come between corporations.
Enterprises that have particularly energy intensive business models like shippers, utilities, chlorine makers, and aluminum smelters, will struggle especially hard to access low priced raw materials, fuel, and electricity. Some will demand government guarantee of access below market price “in the interest of national security”. Some will outsource their way out of high energy or raw material costs: an unsustainable tactic in a global economy. Others will innovate around more efficient technologies and will seek collaboration with others in their supply chain to be less resource intensive. The conflicting approaches send a mixed message to governments. And it will worsen as shortages happen more frequently. Pragmatic solutions will be few and far between until back room advocacy is no longer available to the highest bidder, and greener business models are allowed to be tested in the free market.
Let’s assume this happens within a decade or two. Once more efficient business models are identified and Wall Street sees the value of a stock can correlate with life cycle resource efficiency, there will ensue a flurry of press releases and astroturf blogging, debating whom is better positioned for ‘Hot War era growth’. Stock prices will vacillate wildly on perceptions of who will be vulnerable to energy price volatility and who will not. Buy gold. Buy oil. No…buy solar. It seems we’ve already entered this phase at the most gradual end of the curve.
Multiple additional business examples can be imagined. Lets explore just one of them. Lawn cutting and landscaping businesses that thrive on cheap fuel and unskilled immigrant labor are already threatened by anti-immigration forces. Rising gasoline prices and drought will further stress the minimum wage “crew mow” and “frequent-flower-bed-replanting/mulching” business model. And added threat may come in the form of solar powered, robot-controlled lawn mowers which mark boundaries as would a dog inside an electronic containment “fence”. Predetermined outcome: the closely manicured expansive lawn with decorative annual plantings, now found at every office park, boulevard divider, and shopping mall, will become the province of only the very rich. Much like the 18th Century. The scene for Hot War era pedestrian landscapes will be native perennials, drip irrigation systems, dust mulches, and storm-water recycling systems. Much like LEED certified buildings already strive for! Enroute, thousands of small businesses will fight for a piece of a fast shrinking market. And it won’t be pretty.
How then does a business, large or small, distinguish itself amidst the fog of Hot War? How might they attract investors and employees to a sustainable business? Prospects are good for any business which can substantially shorten parts, or all, of it’s supply chains. Locally produced foods and forest products are prime candidates. “Must have” products or services like food and water will beat “lawn mowing” in a crunch.
New technology won’t always be a panacea. There were never more than just a few successful Silicon Valley clones. Similarly, there won’t be enough nano-tech and biotech in the entire world to fulfill the dreams of every boomtown visionary who thinks these will backfill for lost tax revenues and jobs. But there is good news. Local economic development commissions have awakened to sustainabilty as an opportunity. Tax breaks, free infrastructure, and training incentives will follow open examination of supply chain stability, energy intensity, emissions, and material efficiency. Those business’ who prepare for this scrutiny will receive the benefits. Those which hide behind the traditional “cost of regulations, capital, equipment, and labor” approach will not. Local economic development commissions deal the cards. Corporations play them. Federal officials will learn a new role.

3 responses

  1. Friend,
    I find it hard to reconcile these two statements in your post:
    “Prospects are good for any business which can substantially shorten parts, or all, of it’s supply chains.”
    “Those which hide behind the traditional “cost of regulations, capital, equipment, and labor” approach will not [receive the benefits].”
    Doesn’t one translate into the other and vice versa? At least, both seem to be from the same page of the same business model.

  2. Yes. The contradiction you point out was unintended. Clearer writing would have helped the arguement. “Hid behind” is the key phrase. I have been to such negotiations where the regs, infrastructure, taxes, capital cost, and labor pool that was all that ever came up. Life cycle perspectives only surface when a local official presses the point. Glossing over more subtle or uncommonly considered aspects of risk is typical (or has been up to now). Folks are getting used to inquiring about toxic byproducts of course; but the rest is really novel and that was my focus.

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