Google's next move on expanding analytics and data mining to push innovation into raw material decommoditization may prove to be a Pandora's box. The challenge for Google will be to prove that the decommoditization of the raw materials market will involve more than tracking data.
Yes, it is expected for Google’s entry to bring a significant environmental benefit. However, the caveat to the environmental benefit would be less market competition, as the premium for Google’s effect on raw materials will drive up costs within new and existing supply chains. Inevitably, these higher costs will drive the sector to greater M&A activity. This, consequently, should create even larger conglomerates in a space already dominated by oligarchs.
We can all agree that there is a clear environmental benefit we all welcome. The question is the cost, and particularly, the hidden cost that customers, entrepreneurs and end consumers will have to pay in the long-term, as competition is reduced by the differentiation and decommoditization of raw materials. Lest we forget the commoditization of raw materials drove the price of now common place household items like sugar and cotton-based consumer goods from exclusive to inclusive pricing.
In short, the environment is the epicenter to our future. However, we must consider the unintended consequences of the Google effect on market forces which may create new paradigms.
Article in reference: "Google is tracking sustainable raw materials. Will fashion buy in?"
Commentaires