A Sustainable Alternative to the Growth-Without-Limits Model of Industrialization

My Sustainability Journey
My personal sustainability journey has gone in less than a year from a sense of excitement and productivity to a crushing sense of despair – the sort of hopelessness which comes from not paying enough attention in class and finding out, the night before the final exam, that no amount of studying will prevent a failing grade. We have not come anywhere close to meeting the scale of the problem with the appropriate resources. We have skipped class to go out to movies with friends for too long; and now we are, in short, completely buggered.

Seriously, I’ve spent thousands of dollars retrofitting my house to be more energy efficient. I replaced the furnace with a heat pump, I applied extra layers of insulation to the attic, I replaced the windows with argon-filled double-paned “high-E” glass, and this all resulted in the reduction of my energy bill by about 30%. I dug up my lawn and planted a garden: strawberries, raspberries, blueberries, apples, potatoes, carrots, beans, peas, corn. This has reduced by food bill by just a small fraction. I had my van recycled in a government carbon-reduction program and replaced it with a little Toyota. We only use it on the weekends; during the week, my wife walks to work and I take the train. Yet, our car use alone still counts for more than the one ton of carbon emissions we need to get to per person within my lifetime. I can tell you this with confidence: personal action is not enough. It is “Lifestyle Green”. It is all very honorable and necessary, but it will not save the planet.

Vancouver has recently suffered a disastrous loss of over 90% of the expected salmon run. While the province calls for more studies and blames global warming, local scientists are blaming industrial-scale fish farming for spreading parasites into the ecosystem. Governments continue to argue about what to do about greenhouse-gas reduction while simultaneously using the melting Arctic as an opportunity to stake out new territory for deep-sea drilling and other resource exploitation. Last year saw global food shortages at a time when vast quantities of corn were diverted to the production of ethanol – corn which itself was fed fertilizers and pesticides generated from fossil fuels. It is difficult to escape the feeling that something is fundamentally wrong with the way the world works. We need “Systems Green”, not Lifestyle Green.

Going Back to When it all Began
If you want to figure out what is wrong with a system, it is often best to go back to when the system was first created, and re-examine the problems it was attempting to solve in a new light. To do so with our current globalized industrial system, we have to go all the way back to 1776. No, not to the Declaration of Independence, but to the publication of Adam Smith’s magnum opus, “The Wealth of Nations” in the spring of 1776. It’s a thick five-volume tome, and it came to me as a Christmas gift from my wife: part of a collection of 100 electronic books bundled with my Sony eBook reader. It should be mandatory reading in every university, for it explains in great detail the fundamentals of modern industrial economies. It’s all there: free trade, globalization, economies of scale, assembly-line manufacturing, principals of stock markets, how currencies function, etc. It is to economics what Darwin’s Origin of Species is to biology, or Newton’s Principia Mathematica is to physics; except that it is written in a wonderfully accessible banter, with lengthy examples from local industry. (There’s a chapter on the dangers of protecting the local wool industry with tariffs, in which replacing the word “wool” with “car” will bring it nicely up-to-date). It offers a look at our modern global economy from the perspective of someone who helped architect its beginnings.

Smith hints at the origin of our modern problems in chapter three: “As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division must always be limited by the extent of that power, or, in other words, by the extent of the market.” He goes on to show how the extent of the market is mostly limited by transportation and communication, with the illustration of a single worker making nails in the Scottish highlands. “Such a workman… will make three hundred thousand nails in the year. But in such a situation it would be impossible to dispose of one thousand…” Smith makes the connection between more efficient transportation and more of this specialized industrialization. “As by means of water-carriage, a more extensive market is opened to every sort of industry than what land-carriage alone can afford it...” In short, Smith is saying that problems of transportation and communication place limits on market access, which in turn limits division of labour and large-scale industrialization.

No More Limits
Fast-forward to the 21st century. The Internet has enabled global markets to communicate at the speed of light; and cheap energy, mostly in the form of cheap oil, has enabled transportation of goods on a scale Smith could not have begun to imagine. Communication and transportation are no longer the limiting factors they once were. The supertanker and modern container ship have reduced the cost of shipping to a rounding error. Assembly-line methodology has enabled manufactured goods to be produced in enormous volumes. Industrialized factory farms have done the same for food production. And computers work 24 hours a day, seven days a week, to ensure that the planet-spanning supply chains run smoothly. In many ways, this is a story of resounding success, as it has led to a centuries-long burst of global prosperity – particularly over the past 50 years, when the trade barriers which Smith railed against 200 years earlier really started to come down.

But as impressive as industrialization and globalization have been at promoting prosperity, we are discovering that there is no "stop" mechanism to the system. It will keep growing, at a steady 5% rate of return, until all of the resources on the planet are converted to waste. This was bluntly illustrated in the film "Wall-E", in which the Earth was run by a single planet-wrecking corporation called "Buy-and-Large"; but we are also witnessing this today. The logic of industrialization rewards scale and ignores ecological limits.

This is a fundamental fact – an inescapable feature in the design of our global economy. Climate change is only one unfortunate outcome of industrialization; any physical system, be it fish populations, forest resources, farmland, air quality, etc, will eventually buckle under the logic of unlimited growth. To date, the only controls we have had for this system have been regulatory, but any witness to the climate change debates leading up to this year’s Copenhagen meeting can see that confronting global environmental problems with regulatory limits requires a level of global cooperation which we as a society are unable to muster. We must not place all our eggs in the regulatory basket. We must also reach for other tools.

Turning the Corner
It is at this point in my personal sustainability journey that I have started to become optimistic once again. I have some goals now:

1. Eliminate the advantage of scale
Our economy advantages large players over the small. Since starting down this line of thought, I have encountered numerous examples of small-scale sustainable manufacturing, agricultural, and forestry operations which are being locked out of the market simply due to lack of scale. Grocery stores and restaurants are simply not equipped to buy organic produce from small farms. They purchase their food from large food distributors such as Sysco; who, in turn, purchase their food from large factory farms. This is just an outcome of not being able to deal with complexity. Industrial production is a massive exercise in simplification. However, if we could eliminate the advantage of scale, we would reintroduce a “stop” mechanism to the growth of industrialized processes. Small players have much more incentive to be long-term stewards of their resources and responsive to the prosperity of their local communities because they do not have the luxury of simply “moving on” once the local resources are either polluted or exhausted. Business must be relieved of the burden of growth.

The result will be a vastly more complicated economy; but it would be an economy based on the organic scale, rather than the industrial scale, and therefore much more capable to respond to the ecological challenges currently facing us. It will be a much more agile, sustainable economy. Fundamentally, eliminating the advantage of scale would allow sustainability to replace growth as a foundational principal of business.

2. Glocalize the economy
The other thing we desperately need is a mechanism to enable the exchange of physical goods to occur on a local basis, while keeping the non-physical portion of the economy globalized. This act of existing simultaneously in both the local and global context is called “glocalization”.

Cheap energy and communication technology have enabled our economy to assemble goods across vast distances. This is fine unless, of course, there is strong evidence that the energy is in a form which is causing significant harm to the environment, and which is soon to become much more expensive. In other words, globalization of physical goods makes sense only in the absence of peak oil and climate change. Since both peak oil and climate change seem to be highly probably threats, we must reexamine how we manufacture physical goods (including food).

There are two reasons for urgency in glocalization. The first is fairly obvious: the less fossil fuels we consume in meeting our demands for physical goods, the better we will be able to combat climate change, and the more time we will have to adapt to the economic impact of peak oil. The second cause for urgency is almost generational in scale. As developed nations have outsourced industrial capacity to the developing world, they have lost the institutions and social skills required to support local-scale manufacturing and goods distribution. Few of us in the developed world know anything about farming, wood-working, sewing, or any number of other skills which were once common in a localized economy. Likewise, the developing world is currently undergoing a rapid urbanization whose growth is fueled by the industrialized manufacture of consumer goods destined for the export market. The vast corn fields of Iowa, the glass towers of Manhattan’s financial district, and the acres of assembly lines in the manufacturing district of Guangzhou – all represent a massive loss of diversity in human capital which will have to be rebuilt within a single generation if we are going to survive the transition to a low-impact economy.

The Emerging Future
What can we do to eliminate the advantage of scale and enable the glocalization of our economy? Regulatory solutions will be required; but since I work in the software industry, the tools which I naturally reach for are software in nature. You have to work with what you know; and while I don’t know much, I do see at least a few trends emerging.

Tools such as Facebook, MySpace, and LinkedIn have already transformed social networking – doing for the social realm (as opposed to the economic realm) what I have discussed in terms of scale and glocalization. Prior to the emergence of these tools, social networks were built around personal influence and geographically-bound connections. A person’s social network was confined to those people they had physically met, unless they had some celebrity status in which case their network was defined by their celebrity identity. The popularity of these new tools is driven by the fact that they eliminate the effort and many of the traditional barriers to establishing and maintaining social connections. We need the same thing to happen in our global economy. We need an economic Facebook.

We are also seeing the emergence of a new class of collaboration tool – one which is rich and data-driven. Google Wave is one of the first of such tools. These tools distinguish themselves from e-mail, wikis, and the like in that they enable collaborative conversations to form between people as well as machines. In previous technologies, the machines were left out of the loop; but in this new class of technology, machines are invited as active participants in collaboration – supplying documents, data, and services to the conversation in a natural fashion. Take a look, for example, at SAP’s “Gravity” project. The demo shows a Wave-enabled Business Process Modeling tool with participation from several humans and a syntax-checking robot. At one point, about 5 minutes into the demo, one participant enables a process step to be automated through web-services with a few simple clicks. Another participant even uses an iPhone to access the Wave. At the end of the demo, the team uploads the completed model to NetWeaver’s BPM Workbench. Google’s own Stephanie Hannon was so impressed, she wrote, “I never thought I’d see grown men cry over business process modeling.” Trust me, they were tears of joy. Much of this technology is nascent, but this is the space to watch for the next wave of innovation (pun somewhat intended).

Finally, a hybrid on-premise / cloud model is emerging as a viable software form. One of the challenges in existing software-as-a-service (SaaS) offerings has been getting the solutions to scale profitably while continuing to offer the same richness of features as exists in on-premise software. I think this approach is fundamentally flawed; and is, in my opinion, driven by viewing SaaS as a software delivery vehicle which is designed to save on a customer’s IT operational costs through hosted applications. The true value of a cloud-based approach lies in its ability to be ubiquitous: available to anyone from anywhere at any time. Try thinking for a moment about the entire World Wide Web as a single SaaS offering for the management of hypertext documents. The original aim was ubiquitous access to information, and the nodes on the web were all originally self-hosted. It was only later that hosting came into play, once the technology became well-established and commoditized; and even then, the hosting services do not attempt to host the entire web.

The hybrid approach understands this, enabling our customers to expose their data and services in a ubiquitous fashion (i.e. “in the cloud”) while keeping the more complex applications themselves as self-hosted. Larry Ellison might rant about “the cloud” just being a collection of computers and databases sitting on a network, but the point is that the cloud model is more about creating a platform for enabling an ecosystem of users to interact meaningfully with a common purpose. The larger the ecosystem, and the easier it is to establish meaningful connections, the better the offering.

Have you wondered why Google would want to open source their Wave code, or what they are doing creating Wave in the first place? Do they really want to create the next generation email service? Are they competing with MSN chat? I believe their aims are much bigger than that. Google knows that their strength is in mining value from the relationships between nodes in a network in order to help people navigate the network. However, they have pretty much extracted all that they can from the current World-Wide Web, and they are actively looking for the Next Big Thing. It is my belief that they are creating Wave as a second web, but built around conversations instead of documents. Much like the original web was transformed far beyond its original agenda through open standards and a global community of innovators, Google is hoping for the same thing to happen with Wave. They have no real interest in hosting waves; they are relying on a wild milieu of third-party Wave Foundation servers to create a second world-wide web, which they can then index in order to provide search functionality. They need third-party gadgets and robots to serve up as search results.

What This All Means
OK, let me summarize what I have been trying to say, and where I think this is all going. First of all, I have tried to establish that our existing efforts in promoting sustainability are woefully inadequate to our current challenges. I have argued the logic of industrialization rewards scale and ignores ecological limits, and that our current environmental predicament is the result of removing the limits of transportation and communication from industrialized systems. I have not called for the end of globalization, but rather the introduction of forces which would limit the destructiveness of industrialization – namely to eliminate the advantage of scale and introduce tools which enable glocalization (the localization of the movement of physical goods while continuing to operate on global scales). Finally, I have identified a number of key trends in software which might be applied to the problem: cloud-based tools for connecting people, the emergence of collaboration tools which allow for the natural participation of machines in conversations, and the beginnings of a hybrid cloud model in which the cloud is used to build large networks of participants which interact with a collection of on-premise tools and services.

The future of a sustainable global economy lies in the creation of ubiquitous economic platforms. Just as social network software eliminated the “market barriers” for the creation of social networks, these economic platforms will level the playing field for participation in our economy. Such platforms will be based on open protocols, and will allow for collaborative exchanges between both people and machines. They will be cloud-based, to meet the requirements to connect from anywhere on any device; but they will primarily interact with on-premise applications. And finally, I have some hope that such a set of platforms, built around a common protocol such as Google Wave, will be capable of operating in a local, geographically-aware context.

The Next Steps
Well, this is my personal sustainability journey. It is my hope that this document will provide the reader some ideas of how to actually create sustainable prosperity, through radical innovation as opposed to incremental change. We must develop a sustainable economic alternative to our current growth-without-limits model of industrialization. I have started the ball rolling. Admittedly, my piece of the solution has a bit of a software focus; but hey, you gotta go with what you know. I am looking forward to what the rest of the world will come up with.