Since the pandemic, companies and governments worldwide have been reevaluating their supply chains to achieve greater resilience against potential disruptions, from geopolitical threats to severe climate events. Witness, for example, the hundreds of billions of dollars recently committed to refashion global semiconductor supply chains.

It’s the right impulse, but we’ll all be far better off creating the future rather than reordering the past. Simply rebuilding traditional production facilities closer to home would miss a far greater, transformational opportunity, a trend we call “proximity.”

Digital technologies of all sorts—from AI and mobile apps to 3D printing, robotics, and process automation—enable us to distribute capabilities in smaller and smaller packages, ever closer to each moment in time and space. As a result, digital technologies push the production and provision of value—products, services, experiences—ever closer to the moment of demand. Not forecasted demand, but real ready-to-pay-for-it demand. That’s proximity, and it will transform all industries for the rest of our careers.

From Concrete to Pigs

Consider pig farming in China, the world’s largest consumer of pork. Given China’s limited land for farming and animal husbandry, Chinese company Hubei Zhongxin Kaiwei Modern Farming in 2022 and 2023 built and began operating two massive 26-story pig farms. The company reports capacity to raise 650,000 animals entirely indoors at any given time, operated from a central control room. (Set aside for now the extraordinary ethical issues such an approach presents.)

This vertical farm is certainly innovative, with the latest process controls, monitoring, and automation throughout. It might even prove economically successful for some time, given China’s appetite. (Might.)

As impressive as these facilities are, they represent an adaptation of Industrial Age models to achieve proximity (in addition to being barbaric). It’s telling that the concept came about as a result of the original parent company, a concrete provider, seeking new applications for construction materials. As opposed to defining the best solution for providing pork to the Chinese, the company first sought new construction projects.

We already have the potential to go far beyond this example: proximate meat production that is more sustainable, efficient, responsive, and imminently ethical.

Rather than building a facility to raise animals (under tortuous conditions), imagine producing “cultured meat.” Companies such as Mosa Meat based in the Netherlands and Aleph Farms in Israel, among others, are developing processes to produce real meat without any animals involved—aside from the animals that provided their original cells.

Once cultured meat becomes viable at scale—already possible for ground meats, further out for steaks—companies will be able to produce meat in dramatically smaller facilities, thus potentially closer to each table and restaurant. Mosa and Aleph’s processes and products differ, but they both rely on modified fermentation processes (widely used for decades in chemical, pharmaceutical, and food production).

Small-scale facilities enable flexibility to produce meats based on current, local demand. They also enable custom meat-to-order far beyond the dreams of even the most advanced traditional producers.

The promise of ‘cultured meat’

On a visit to its Tel Aviv headquarters in January 2023, Aleph Farms’ head of new ventures Pascal Rosenfeld, shared that the company is particularly popular with leading chefs eager to produce small quantities of bespoke meats. “They’ll have creative options never before possible when we’re able to produce small quantities to order. Adjusting fat content, adding nutrients like fatty acids not typically found in meats, flavor profiles, textures—it’s all on our roadmap. Top chefs have become some of our biggest fans.”

As of 2023, cultured meat remains expensive, but the industry is moving fast. Emerging players have made cost a priority. As scale production becomes economical, distributed in smaller facilities closer to demand, the system becomes not only more responsive to changing demands but also far more evolvable.

Compare what it takes to scale traditional meat production with scaling production of cultured meats. Established processes require acres of grazing lands, months for raising animals, and facilities for housing, sale, and slaughter. By contrast, building or adapting cultured meat capacity might require new fermentation lines, perhaps new equipment or new software, and no animals involved. You can install these relatively small plants almost anywhere, even in urban areas where animal farms would be verboten.

The implications transcend meat. Didier Toubia, CEO of Aleph Farms, explained to Rob, “After a career in medical devices, I wanted to have an even bigger impact. Better health, sustainability, accessibility. What if we could produce real meat without living animals? We could impact all of these factors at the same time. And without the ethical problems presented by raising animals for slaughter.”

The same trend is already present for milk production. In 2022, another Israel-based company, Remilk, brought a real milk product to market. Its “animal-free” process produces “dairy-identical” proteins that in June 2022 received FDA regulatory approval for sale in the United States.

Remilk reports that its primary growth constraint will be scaling production and outfitting enough fermentation tanks. While a significant challenge, the company can locate production in far more locations than would be possible for traditional dairy farms: near its customers’ facilities or even near urban areas proximate to consumers.

In addition to having the taste and texture of traditional milk, Remilk products—which Rob happily tried—could have a profound environmental impact. “Compared to regular milk, our process requires 1% of the land, 4% of the pollutant emissions, and 5% of the water required by traditional dairy industry,” Remilk CTO Dr. Ori Cohavi explained.

The food industry seems to have taken note. In June 2023, the company announced that three former top executives from industry leaders, Danone, Nestle, and PepsiCo, joined its board of directors.

While it’s unclear which approaches will prevail, distributed production is rapidly becoming real across a range of products and industries. Done right, supply chains can become far more flexible, responsive, and sustainable.

Customization and Efficiency

The closer a production system is to holding raw materials that are produced only in response to precise demands (meat cells for replication, for instance), the more the system decreases waste and enhances sustainability.

Instead of bulk production in advance of demand, proximity recommends Moment of Use (MoU) production: producing only what’s required, when and where it’s required. While we might have always preferred this, doing so wasn’t efficient. Over the coming decades we’ll discover that it’s far more possible—and competitive, cost-effective, and sustainable.

As additive manufacturing, robotics, and automation advance, they’ll resolve—and eventually annihilate—traditional trade-offs between customization and efficiency. Products will be made to order with high levels of customization for individual customers. Like the chefs eager to order their own proprietary meats from Aleph Farms.

Rather than holding finished products in warehouses—hoping your demand predictions materialize—companies can hold the components or even raw materials necessary until actual demand arises. What designers call “design for postponement”—postponing critical decisions until you have better information—becomes in the proximate world a central principle.

Beyond milk and meat, additive manufacturing technologies like 3D printing hold raw materials at the ready—typically polymers or metals—until a customer requires a specific product or part and then makes it to order.

At present, additive manufacturing doesn’t compete on a cost basis with high-scale manufacturing for most products, but the technology is improving fast. In terms of sustainability, raw materials have far longer shelf lives than most finished products. A part that no one needs goes to waste (or hopefully to recycling). Polymers or metal powders in 3D printer cartridges, by contrast, retain their potential to become nearly anything.

As entrepreneurs and corporations compete for ever-more demanding customers, and governments seek to mitigate risks and catalyze prosperity, we must recognize that digital technologies allow us to do things we could never have done before. It’s our opportunity—and responsibility—to do so.

Adapted from Proximity: How Coming Breakthroughs in Just-in-Time Transform Business, Society, and Daily Life, published by Columbia University Press. Copyright (c) 2024 Robert C. Wolcott and Kaihan Krippendorff. Used by arrangement with the Publisher. All rights reserved.