Table of Contents
What Is ‘P=0’ and Why Does It Mean the End of Waiting for Deliveries?
Say goodbye to supply chains and waiting weeks for shipping. Explore the ‘Proximity’ revolution with Robert C. Wolcott and Kaihan Krippendorff to learn how P=0 technology is moving production from distant factories directly to your neighborhood. Don’t get left behind in the old economy—read the full summary below to discover the 3 industries that will be unrecognizable by 2030.
Genres
Technology and the Future, Society and Culture
Learn how Proximity is changing how we live, shop, and eat
Proximity (2024) explores how digital technologies are revolutionizing production and service delivery, enabling on-demand fulfillment with minimal environmental impact. It examines the implications of this trend across industries and how it will transform business strategies, supply chains, and sustainability efforts.
Imagine a world where your every consumer desire is fulfilled, not eventually, but instantly. A world where products are tailored to your specific tastes and needs. This is the world of Proximity; and it’s one that’s already taking shape, driven by a confluence of powerful technologies and shifting consumer expectations.
In this summary, we’ll take you on a journey to the frontier of this transformation. We’ll show you how innovators are using new technology to bring production closer to consumption, from the factory floor to the urban farm.
Whether you’re an early adopter eager for the latest innovations or a business leader in search of new models, join us as we explore this emerging landscape and discover how proximity is reshaping the economy and ultimately the world.
The pull economy
Imagine a world where you can have exactly what you want; when you want it; where you want it – with minimal waste or environmental impact. This is the promise of Proximity – new technologies and business models reshaping how we produce, distribute, and consume.
For centuries, businesses have been constrained by the economics of scale, relying on centralized mass production to deliver standardized products at low cost to a mass market. But what if this constraint could be overcome? What if businesses could reliably, and profitably, fulfill each customer’s unique needs, in real-time, with products produced near the point of demand?
Advanced technologies like 3D printing, robotics, AI, and ubiquitous connectivity are enabling companies to postpone production until the moment demand arises, and then rapidly deliver customized products with minimal lead time and waste. The result is a fundamental shift from a “push” to a “pull” economy, where supply dynamically adjusts to demand instead of the other way around.
The benefits are compelling. For customers, Proximity unlocks previously impossible levels of choice, convenience, and personalization. For businesses, it promises to boost profitability by eliminating overproduction, inventory holding costs, and supply chain inefficiencies. And for society and the environment, it offers a path to more sustainable consumption, reducing waste by producing only what is needed.
Take, for example, how t-shirts are made. Traditionally, they were mass-produced in large factories, with thousands of identical units shipped to retail stores worldwide. This often led to excess inventory and significant environmental waste. Now, imagine you want a unique T-shirt. You go online, design it with your preferred color, pattern, and size, and place the order. This order is sent to a nearby printshop and, within hours, your custom shirt is ready and delivered directly to your doorstep. This is what the shift to a “pull” economy promises.
But realizing this vision requires more than just new technologies. It demands a wholesale reinvention of business models, organizational structures, and mindsets. But pioneering companies are already showing the way. From on-demand manufacturing of personalized products, like t-shirts, to hyperlocal food production, Proximity pioneers are upending traditional notions of what is possible and profitable.
Fundamentally, Proximity is about leveraging digital technologies to create value closer to the moment and location of demand. It’s a world in which goods and services are produced and delivered, not based on long-range forecasts and sprawling supply chains, but in response to specific, real-time customer needs.
Consider how the rise of 3D printing is enabling manufacturers to produce complex parts on-demand, right where they’re needed, instead of relying on centralized factories and lengthy logistics. Or, as we’ll see, how vertical farms are sprouting up in urban centers, growing fresh produce just miles from the consumers who eat it. These are just glimpses of the Proximity principle in action.
P=0
In the early months of 2020, as the COVID-19 pandemic swept across the globe, the world witnessed a remarkable phenomenon: the rapid adoption of new digital technologies. From remote work and virtual schooling to online shopping and telemedicine, the crisis prompted a shift towards digital solutions almost overnight. But as significant as this pivot was, it merely accelerated a deeper trend that had been gathering momentum for years – the inexorable march towards Proximity.
Digital tools are transforming the old constraints of geography and scale. How? By allowing capabilities to be distributed, connected, and coordinated across a multitude of locations and at low cost. Simultaneously, these tools are enabling the creation and storage of value in digital form – think algorithms, designs, and intellectual property – with near-zero marginal costs. Together, these two attributes are moving economic models closer to what the author calls “P = 0” – a theoretical ideal where there is no delay or distance between the moment and place where a product or service is needed by a customer – and when it is created and delivered. In other words, the promise of P=0 is one where the instantaneous matching of supply and demand is increasingly within reach.
As business models approach P=0, the need for demand prediction fades away, replaced by the ability to trigger production based on actual, present need. Waste and inefficiency, the scourges of the industrial age, melt away as raw materials are converted into finished products only when required. The old trade-off between customization and cost evaporates, enabling companies to profitably deliver bespoke solutions at mass-market prices. And as organizations gather and leverage granular data on every customer interaction, they can achieve unprecedented levels of responsiveness and learning, continuously improving their offerings over time.
But all this warrants a rethink. The old playbooks, honed in the era of centralized production and static supply chains, no longer suffice. Instead, companies must cultivate an ecosystem mindset, forging fluid partnerships across industries to access the data and capabilities they need. Take, for example, the automotive industry. Tesla collaborates with battery manufacturers, software companies, and renewable energy providers to create a seamless ecosystem of products and services.
In the world of Proximity, companies must strive to track every point of demand: that is, not just what the customer wants, but when, where, and in what context they want it. It means building a comprehensive, real-time understanding of customer needs. They must ruthlessly compress, distribute, and coordinate their production and provision, and align their operations ever more closely with the rhythms of the market. And above all, they must develop resilient processes, able to adapt to constant change.
As with any great disruption, the challenges of Proximity are formidable. But so too are the opportunities vast, for those who can harness its potential.
Proximity and the food system
In the heart of Brooklyn, a shipping container hums with life. Inside, a carefully controlled environment of hydroponic trays, LED lights, and sensors surround a crop of fresh greens and herbs. This is the vision of Square Roots, an urban farming startup that aims to bring food production closer to consumers in the most unlikely of places. And it’s one example of the Proximity revolution that’s transforming how we feed ourselves.
As the world’s population hurtles towards 10 billion by 2050, we face an existential challenge: how to nourish all those people without destroying the Earth in the process. Part of the answer may lie in a shift towards more localized, technology-driven food systems that can deliver fresh, nutritious produce with a smaller environmental footprint.
Controlled Environment Agriculture (CEA) is a suite of techniques that allow crops to be grown indoors, in highly optimized conditions. From vertical farms that stretch upwards in towering stacks to modular units housed in repurposed shipping containers, CEA comes in various forms. But what they all share is an ability to boost yields while slashing water usage and freeing food production from the constraints of geography and climate.Imagine a restaurant harvesting its own herbs from a rooftop garden, or a supermarket that sources its produce from a warehouse farm just blocks away. This is CEA.
But the Proximity revolution isn’t just about plants. Land-based aquaculture brings fish farming out of the oceans and into carefully controlled tanks on shore. By recycling water and eliminating the risks of disease and pollution, these systems can deliver fresh, healthy seafood with a dramatically lower environmental impact.
Even more radical – and more congruent with animal welfare – are emerging techniques of cellular agriculture, in which meat is grown directly from cultured cells in a laboratory setting. Imagine biting into a juicy steak or a crispy piece of fried chicken, knowing that no animal had to suffer for your meal. That’s the tantalizing prospect offered by cultured meat, and while the technology is still in its infancy, it holds immense potential to reshape our relationship with animal protein.
As these technologies mature and scale, they’re likely to reshape the geography of food production in profound ways. While large-scale, centralized agriculture will continue to play a vital role in feeding the world, particularly for staple crops and commodities, an increasing share of our food may come from smaller, more distributed operations located closer to the point of consumption. Imagine a hybrid system where the bulk of our grains and soybeans are still grown on vast farms in the heartland, but our fruits, vegetables, and proteins are increasingly sourced from a network of vertical farms, greenhouses, and cultivators woven into the fabric of our cities and communities.
This transition won’t happen overnight, and it won’t be without its challenges. But by harnessing the power of innovation and technology, we have the opportunity to build a future where fresh, nutritious food is abundant and accessible to all, no matter where they live.
Conclusion
The main takeaway of this summary to Proximity by Robert C. Wolcott and Kaihan Krippendorff is that new technologies are enabling a fundamental shift in how we produce and consume goods and services. By allowing production to happen closer to the time and place of demand, businesses can deliver highly personalized products and services more efficiently.
This move towards Proximity promises to unlock new levels of customer value, business profitability, and sustainability. Realizing this potential, however, requires reinventing business models. Businesses must embrace an ecosystem mindset and leverage real-time data about consumer behavior and preferences.
In the end, the winners will be those who can embrace Proximity and harness its potential to create better outcomes for customers, society, and the planet.