At our November Futures Consortium meeting on discontinuities, Barry Lynn, senior fellow at the New America Foundation, spoke about the dangers to the world economy posed by today's globalized, single source, just-in-time manufacturing system. Lynn stated in his presentation that "because globalization is so bound up, catastrophe is inevitable ... a globalized system with no redundancies is at greater risk to be unsettled by negative discontinuities."
A perfect example of this phenomenon came this week. Because of a March 3rd fire at the second-largest laptop battery manufacturer in South Korea, HP and Dell are reporting shortages of replacement batteries, and prices for existing batteries are starting to climb. Asustek, Taiwan's second-largest computer maker, said the shortage would likely affect 40% of its orders in the second quarter of the year. The Korean battery factory won't be back online for another 2-3 months.
A global battery constraint will not cripple the computer industry, but it serves as a reminder of how our entangled, globalized economy is vulnerable to random events--discontinuities--and how important it is, as Lynn stated, to build resiliency and redundancy into our economic system.
Link via Engadget.









Recent Comments