There was a time when companies preferred vertical integration: they wanted to own their supply chain. Then, for a long time, the mantra was to concentrate on one’s core business and let other specialists take care of all the non-core parts of your business.
Well…
The reason vertical farming failed is that if you want to do it you also need to control your power source. In a world where civilization is slowly collapsing, you need vertical integration.https://t.co/jXtY1GOKg5
— Ian Welsh (@iwelsh) December 25, 2022
This is no longer viable business practice. In a period of civilization collapse supply chains become unreliable: you may not be able to get what you want or you may not be able to get it at a price you can afford.
Supply chains will become more unreliable as time goes on. Leaving aside the fact that logistics companies make out like bandits during periods of supply constraints and thus have little incentive to fix the problem, climate change, environmental collapse and the new era of cold and hot war will make supplies more and more unreliable and scarce.
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The more something matters, the more this will be true: many countries couldn’t get vaccines, no matter what, and countries which created them gave them to themselves and their allies first. When water, food, minerals and energy becomes scarce, countries and companies will prioritize themselves first, their allies second and everyone else not at all. Strong countries, faced with famine, will not export food they need, and weak countries will be forced to export resources they need even if it means death and deprivation for their people.
If you need something, you better make it yourself, or be in lockstep with a company or country who needs you as much as you need them.
The smaller you are, the worse this will get. Amid the shortages of the pandemic small and medium enterprises, including stores were largely cut off: the biggest customers got served first and everyone else got the scraps.
A reliable supply chain and predictable politics are necessary for ages where companies and countries specialize. Eras of war and decline and collapse are eres of vertical integration and keeping ones suppliers close. The extreme version of this was feudalism: make or grow everything you have locally, because you can’t count on anything more than a day’s travel.
Most areas of the developed world won’t wind up that bad for some time yet, but that’s the extreme end of the road we’re on. Hopefully we’ll never get there, but wise countries and companies will no longer rely on widespread supply chains they have no control over.
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