The Plastiki, which just crossed the Pacific, was made from plastic bottles and powered by renewables.

Becoming resourceful about our resources would be a smart move, if recent activity in Russia, China and the US is any indication. By Richard Collins.

The European Commission in June flagged 14 raw materials as “critical” for the EU economy but “increasingly under pressure”. Russia in August banned wheat exports after a devastating drought. The US is debating whether it should lock down its phosphorus reserves for local use only, while the Chinese are snapping up deposits globally.

With the global population heading from six to nine billion by 2050 and rising middle classes in rapidly developing countries such as China, it is far more than just carbon emissions and climate change that we just need to get a handle on.

In fact, China needs to build three cities larger than Sydney every year until 2030 just to accommodate rural to urban migration. At the same time, the world is losing 12 million hectares of fertile land a year, according to the CSIRO, and yields from those lands are starting to decline.

The CSIRO recently distilled information from 100 key staff to inform its next five-year plan. Callum Drummond, the chief of materials science and engineering at CSIRO, told an Innovation Series event in June they had indentified five global mega-trends.

“There is more from less; we are moving into a world of more and more limited resources,” he said.

“There is a personal touch; we are moving from mass production to mass customising. [There is] divergent demographics; we are becoming older, parts of the world are becoming hungrier and many parts of the world are becoming more demanding.

“We are also on the move; we have never travelled so much as a species as we do now, and that leads to a different future. And we are having this i-world, this digital and natural conversion, this conversion of the physics and chemistry with the biology.”

Resources: five key issues
Drummond says those five global trends translate into five key issues for manufacturers and materials companies. The first pivots around various ways to maintain profitability in such a world.

“Profitability is about efficiency; doing more with less. It’s about utilisation, getting more out of capex; doing more with same. Performance demands a premium, so you could focus on performance,” he said.

“And supply and demand economics are always important and what we are seeing is a continued drive to global supply chains. Some of the big multi-nationals are saying they are only going to have one or two suppliers for the entire world, which has implications for local suppliers.”

In a world of finite resources, the next challenge is to ensure security of supply. Partly that is again about supply chains, but in this case about diversifying suppliers and supply sources to mitigate the risk.

“We also see a continuing emphasis on renewables from non-renewables, and a continuing focus on waste minimisation and recycling. In fact, people used to talk about lifecycle analysis as cradle to grave, now it is talked about as cradle to cradle,” Drummond said.

“You have to do a ‘Lazarus’ with materials now and bring it back from the dead and continue to recycle it again and again. You will see that play out in the manufacturing sector more and more.”
CSIRO’s third driver is a growing focus on securing a licence to operate, coming from government but also consumer perception and market pull. Drummond was on the scientific advisory panel supercapacitor innovator CAP-XX and remembers sevral years ago pitching their component to Sony.

“They said you can’t be a supplier unless you are a Green Partner and in order to be a Green Partner there are all these audit requirements in terms of sustainability. That’s an example of market pull.

“Now I haven’t worked on projects with Wal-Mart but this is a very interesting thing that is playing out now in the market... It decided in 2007 to introduce a packaging sustainability scorecard to 60,000 worldwide suppliers and said unless you reduce your packaging by five per cent – which they estimated would save 667,000 metrics tonnes of CO2 going into the atmosphere – you cannot supply to us.

“Wal-Mart are pretty smart and they worked out if you are supplying less packaging to us it should cost us less, so they expected to realised savings of $3.4 billion per annum.”

In 2008, Wal-Mart ramped it up to an entire sustainable products index. Drummond isn’t game to call how the “huge logistical and conceptual challenge” might play out, but can imagine other companies following in its footsteps.

Smart services, green products
“In 1970, roughly 55 per cent of the Australian economy was based on services. Now it is around 70 per cent, so we are moving from a traditional product-related society, which has implications if you are a manufacturer or materials supplier.”

Enhanced service provision will continue to advance, with manufacturing companies becoming more and more focused on the value-added service and the manufactured product or material becoming a smaller part of the equation. Drummond pointed to Orica as a case in point.

“Orica is the largest non-military explosives company in the world, but how do they describe themselves? They are Orica Mining Services, they provide mining solutions not ammonium nitrate explosives or other chemicals. And when you talk to them, far more of their profit comes from the service element of their business than the product element of their business.”
CSIRO’s final piece of the future puzzle is custodianship of Earth, with products and process designed to serve that desire.

“What is manufacturing in Australia going to look like? I think it is going to be sustainability, sustainability, sustainability. It is going to be employing sustainable business models, which is what companies have always had to do,” said Drummond.

“But more and more we will have to use sustainable manufacturing processes – more and more closed loop, minimising waste, using renewables.

“And there is a huge opportunity for Australia in selling products that supply industry’s and society’s sustainable drivers. You will hear a lot about the green economy and I think that is a huge opportunity.”