EL – Great read, especially because of the widespread impact of digitization on Blackrocks’ product development.
Seems like Blackrock is using digitization for 3 areas of product development & distribution: (1) enhance returns/ smarter strategies to identify investments, (2) predict customer demand, (3) distribution through partners/ acquisitions.
The only caution I’d see is in over-relying on existing/ new products to gauge customer demand (2). In other words, if customer preference is variable we’re trying to predict, it may be inefficient to approximate it by looking at current market’s solutions. Instead, Blackrock could use user engagement data from its online user dashboards and/or integrate feedback from its financial advisors that clients have shared. These might be more direct proxies for customer preferences & demand — thereby enabling Blackrock to innovate outside the current market constraints and more directly address customer preferences.
Really appreciated learning how tariffs will affect PVs – since as you point out 86% of solar installations’ panels are assembled abroad.
Tying this to another mega-trend (climate change) – to your point on how increasing isolationism hurts clean energy efforts, it also hurts our attempts to curb climate change. Moreover, the longer-term negative consequences of these tariffs extend beyond price – it affects consumer behavior and firms’ expectations. Another generation of consumers may grow up skeptical/ resistant to solar – which from my conversations with solar developers, seems like one of the biggest blocks of installation. Firms may not invest in further clean energy R&D. Both hurt our ability to deal with climate change longer-term.
Nicki – Really appreciated your post bc you highlight an unconventional application of digitization/ RFID’s to a much more traditional industry like lumber/ paper packaging.
To your point – wonder if digitization could improve productivity (as well as sustainability, as you point out). For example, 3M could use data on forests, to enhance yield/ productivity. By placing sensors/ RFIDs on forests, 3M could potentially get real-time data on the trees’ surrounding environment like temperature & precipitation, in addition to location. With sufficient trees and variability across trees’ growing conditions, they could use this data to further inform where to invest future tree-farms, to maximize yield.
Akanksha – Thanks for the post. Appreciated the real-life impact that a more efficient supply chain could have, to meet potential increases in the demand for vaccines due to climate change.
To your point on potential solutions to meet climate change’s impact — wonder if digitization could help in 2 ways:
1. Enhanced diagnostics on the current supply chain – To your point, we’d want to find downstream optimizations to minimize the lag until receipt of the vaccines. To address that, wonder if there are ways to attach sensors (and thereby get data) on the current shipping process? This would help us identify bottlenecks – including where the stalls are (where is ‘work in progress’ just sitting idly), which stations are ‘starved’ or ‘blocked’, any non-time-based breaks in the supply chain (e.g., temperature fluctuations that may destroy the vaccine’s potency), etc.
2. Prediction to re-route the supply chain – Based on the cholera prediction map that you highlight, wonder if there is a way for researchers to do 2 things: (1) identify reliable & accessible variables that predict at high certainty (if there are others beyond weather) and (2) get more granular demand prediction, down to 15-mile radiuses. Together, this would enable health organizations to start delivery before demand even surfaces.
Kim – Definitely appreciate this. To your point, it’s difficult to break the self-fulfilling/ re-inforcing cycle of increasing customer expectations + increasing operational efficiencies to decrease time from online order -> receipt. In fact, like EL mentioned in a comment above, Amazon’s acquisitions of Whole Foods will likely exacerbate the cycle.
Wonder if one solution to alleviating this cycle is to integrate the digital purchase with physical shopping experience? For example, rather than exclusively rely on shipping – could Amazon bundle a customer’s online order with her/ his in-store purchases at a Whole Foods? In this world, Amazon would need to tie together a user profile btwn Amazon and Whole Foods, and re-make its Whole Foods stores into mini-distribution centers. Yet, it could alleviate some of the self-fulfilling cycle that you describe.
Super interesting read – esp since your article nicely points outlines all 3 risks: commercial, regulatory, and tech. Particularly enjoyed your thought on a “a more efficient system may see multiple package “bays” on each drone into which presorted parcels are automatically loaded by the truck.”
Building on alternative ‘more efficient systems’, curious for your thoughts on potential integrations of data for further efficiencies. For example, could imagine 2 potential applications:
1. Data from retail partners or UPS with drones? For example, in a future world where next-day delivery is the norm even for rural customers, could a UPS truck/ drone be pre-loaded w anticipated customer orders?
2. Data for route optimizations btwn drones + trucks? For example, could drones and trucks be equipped w sensors to track traffic patterns/ weather conditions/ pedestrian foot-traffic decide in real-time which routes are done by drone vs truck (or even if still by truck, which route to take)?