#121—Proximity: How Coming Breakthroughs in Just-in-Time Transform Business, Society, and Daily Life

The world has undergone a transformation in the past century, as the industrial revolution turned many luxuries into everyday commodities. Then, at the turn of the century, the advent of the internet compounded this supply and demand shift. Now, we are entering yet again a new era as we see technology once again propel us into a new radical shift we call: Proximity.  

Full disclosure, in this episode, we follow a different format to present the findings a book I co-authored with Rob Wolcott, cofounder and chair of The World Innovation Network (TWIN Global). He came up with the idea years ago. He I spent the last three years compiling research and case studies on the topic into our recently released book: Proximity: How Coming Breakthroughs in Just-in-Time Transform Business, Society, and Daily Life. 

In this discussion, Rob and I are honored to be joined by guest host Stuart Crainer, co-founder of Thinkers50, the definitive listing of the world's top 50 management thinkers. Rob is the cofounder and chair of The World Innovation Network (TWIN Global) and adjunct professor of innovation at the Booth School of Business, University of Chicago. 

Together, we lay out the key discoveries Rob and I made as we interviewed innovators, business leaders, and other experts seeking to piece together the facets of the concept of proximity: the idea that digital technologies are pushing the production and provision of value ever closer to the moment of demand in time and space.

What we discovered is a monumental shift in how businesses approach value creation. Rather than following the typical value creation chain that has so long prevailed the concept of business and industries, businesses are now meeting customers by creating value at the moment it is needed. Not just when they need but actually where they need it.

The implications of this shift with change most, maybe every, area of life: the way we work, eat, heal, produce, power, defend, explore space. And the implications for businesses are profound as well, and we share what leaders need to know and act on now if they want to stay ahead of this curve that will likely upend every business industry as we know it. 

We hope you enjoy this special episode of Outthinkers.

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Episode Timeline:
00:00—Highlight from today's episode
0:33—Introducing the topic of today’s episode
4:25—If you really know me, you know that...
5:41—What's your definition of strategy?
6:36— What is Proximity? Unpacking the core concept
11:31— Praise for Procrastination: The counterintuitive logic of proximity
14:38—The Proximity revolution: Real-world examples and implications
17:20—How well is the Proximity concept understood in the business world
20:40—Proximity and AI
25:01— Overcoming obstacles
26:27— Proximity pioneers: Organizations leading the way
31:40— Just-in-time reimagined
32:46— Sustainability and Proximity 
36:04—Projecting proximity's timeline
38:40—Optimism and caution in the proximity era 

Thank you to our guest. Thank you to our executive producer, Karina Reyes, our editor, Zach Ness, and the rest of the team. If you like what you heard, please follow, download, and subscribe. I'm your host, Kaihan Krippendorff. Thank you for listening.

Follow us at outthinkernetworks.com/podcast

Transcript

Kaihan Krippendorff: Welcome to the Outthinkers podcast. Plug in to fascinating minds and breakthrough ideas that are transforming industries and the world. I'm your host, Kaihan Krippendorff founder of Outthinker Networks. A global think tank comprised of corporate strategist, innovators, and entrepreneurs that are shaping the future of business. If this describes you join us at Outthinker.com.

Now let's dive into this week's episode. The world has undergone a transformation in the past century as the industrial revolution turned many luxuries into everyday commodities. Then at the turn of the century, the advent of the Internet compounded this supply and demand shift. Now we are entering yet again a new era as we see technology once again propelling us into a new radical shift that today we call proximity. In full disclosure, in this episode, we follow a different format.

To present the findings of a book, I co-authored with Rob Walcott. He and I spent the last 3 years compiling research and case studies on the topic into our recently released book, Proximity. How coming breakthroughs in just some time transform business, society, and daily life. In this discussion, Rob and I are honored. To be joined by guest host, Stuart Crainer, cofounder of Thinkers50, the definitive listing of the world's top 50 management thinkers.

Rob is the cofounder as well and chair of the world innovation network, TWIN Global. He is an adjunct professor of innovation at the booth school of business at University of Chicago, and also Northwestern University's Kellogg School of Business. Together, we lay out the key discoveries Rob and I made as we interviewed innovators, business leaders, and other experts seeking to piece together the facets of the concept of proximity. The idea that digital technologies are pushing the production and provision of value ever closer and closer to the point of demand and not just in time, not just faster, but also space actually, value is getting created, things are getting produced. Services are being delivered closer in space to where people want them.

What we discovered is a monumental shift in how businesses approach value creation rather than following the typical value creation chain that has so long prevailed as the dominant concept of business and industries. Businesses are now meeting customers by creating value at the moment it is needed. The implications of this shift will change most, maybe every area of life, the way we work, how we heal, how we eat, how we produce, how we power, how we defend, how we explore space, and the implications for business are profound as well, and we share what leaders need to know and act on now if they want to stay ahead of the curve. That will likely upend every industry as we know it. We hope you enjoy this special episode of Out Thinkers.

Stuart Crainer: Hello. I'm Stuart Crainer, co-founder of Thinkers50, and I'm delighted to be the guest host for this special episode of the Outhinkers podcast. Our guests today are the original Outhinker, Kaihan Krippendorff, your usual podcast host alongside this co-author, Rob Wolcott. Kaihan and Rob are here to talk about their new book, proximity, published by Columbia Business School Press. The book sub title conveys some idea of the ambition of the book and its importance.

It is how coming breakthroughs in just in time transform business society, and daily life. So keep listening and be prepared to be transformed. Rob is cofounder and chair of the World Innovation Network, is an adjunct professor of innovation at the booth, School of Business at the University of Chicago, and an adjunct professor of executive education at the Kellogg School of Management Northwestern University. Its books include Grow from within, mastering corporate entrepreneurship and innovation. Kian and Rob.

Welcome. I've listened to many episodes of the I think of podcasts, and know there are certain obligatory questions. So let's develop a feeling of proximity with them. So complete the sentence. If you really know me, you know that, feel free to make this non business or work related.

Robert Wolcott: Wow, Stewart. You know, I think when you when you teach at a university or you speak a lot or you're in front of people, lead programs, Kaihan and I do. People make the assumption that you're an extrovert. And, honestly, in in my twenties, I did the Myers Briggs, and I was dead center. Introvert, extrovert.

And so I love doing engaging with people, but then I get overload. And usually, you'll find me in my hotel room after a session for about an hour by myself.

Kaihan Krippendorff: I would have never thought that.

Stuart Crainer: Yeah. Well, Germany, other people would say that the introvert extrovert is always really interesting. Diane, how about you? If you really know me, you know that I cooked a mean stuffed onions.

Kaihan Krippendorff: That's right.

Stuart Crainer: Or something serious?

Kaihan Krippendorff: I love my stuffed onions. I want an award for my stuffed onions. And if I figure out the business model, I would be cooking. I could figure out how to make money from that, and I'm going to figure that out.

Stuart Crainer: Isn't the business model of cooking quite simply?

Kaihan Krippendorff: Save money.

Robert Wolcott: Yeah. I was gonna say a few people have figured that 1 out in history.

Stuart Crainer: Yeah. Yeah. Yeah. The next question which has been asked in nearly a hundred and 20 episodes of this podcast is What is your definition of strategy? Ciaran, you have asked this question repeatedly.

There are so many fantastic guests So I expect that their wisdom is percolated down to your own definition of strategy.

Kaihan Krippendorff: Yeah. I love that we got a hundred and 20 different answers that question. And I would say it is or synthesize it you set a goal and what you choose not to do to achieve the goal. That's about it.

Stuart Crainer: And Robert's previously described strategy as defining the right objectives and figuring out how best to achieve them. Are you sticking with that robot or has things changed?

Robert Wolcott: Well, they haven't changed, but III maybe add another word, and that's where you think you wanna go and how you think you're going to get there. Because no battle plan survive's first contact with the enemy. But it's where you think you wanna go and how you think you're gonna get there.

Stuart Crainer: This is important questions out of the way. So let's talk about the book now. The book, proximity, which begs the question. What is proximity?

Robert Wolcott: Well, I'm a proximity store. It is simply a word. You find it in the dictionary. It means that we tend to think of it meaning closeness to something, but it technically means is how far your proximity to something is how far close you are to it. But Cayan and I are you serving the word to express a dominant trend that articulates the the logic of digital.

So digital allows us to compress capabilities of all sorts and smaller and smaller packages and distribute them all over the economy ever closer to each moment in time and space. And so, therefore, digital pushes the production and provision in value ever closer to the moment of actual demand, and that's proximity. So it has to do with how closer you to the specific user, customer, etcetera, who is in need or demands a product service or experience. And by the way, Stewart, that acts on the cover of the book and the cover art. That acts as metaphorical for the moment of demand.

Stuart Crainer: X marks the moment. Phil Cutler wrote the forward to the book, and he says proximity is about far more than being faster or more responsive It's a new way of envisioning business models, delivery platforms, and customer service.

Kaihan Krippendorff: Yes. I agree. I think if you took any business or industry, and you could follow the value chain, and you could say, if I take a raw material, I add a little bit of value to it, and then I add a little value to it. Kind of you can see a scope, a kind of a stack of how value gets increased. That's the foundation of business.

Right? Taking something of less value, adding more value to it. And then giving it to the next person in the chain. What we're saying is that curve is starting to change across every industry where more of that value is getting added at the end and closer to. So as whereas before, maybe it was at a picture in airplane taking off on an even slope.

Now that airplane is waiting until the end of the runway and then shooting up. And that has massive implications for every industry. And as the structural changes get adopted, that's gonna change many industries permanently.

Stuart Crainer: Is proximity universal? Does it apply to all industries, all organizations?

Robert Wolcott: Yeah. Stewart, that that's an assertion we make in the book. Now, obviously, it applies differently in different context. So it's not looking the same in health care, as it is in manufacturing a product, of course. But the dynamic of proximity is affecting every industry because digital is affecting every industry.

And and where this came from originally was asking the question, what is fundamentally different about digital compared to the industrial age? And the reason that's a powerful question is humans have always wanted proximity. Humans have always wanted what we want, where, and when we want it. It's that hasn't changed. What we want changes, but the fact that we want what we want has not changed.

But the transformative situation today is that we can do things we could never have done before. So when you understand the dominant logic of digital that allows us to put things all over the universe ever closer to each moment of demand, And then over time, the value proposition of waiting. Kai and I are really proposing that we set up business models and technology platforms to procrastinate. To encourage us to wait as long as possible before adding value. And when you start to do the math, you realize The longer you can wait before you add any value, the less predicting you have to do about the future, the less demand planning you have to do because you have to order fewer things, months, even more in advance, and hope that you have the right stuff in the warehouse when the consumer is ready.

And so this is something that people have wanted forever. Digital allows us to do it in ways we could never have done before.

Kaihan Krippendorff: I think a nice tangible existing example or illustration is the Coca Cola freestyle machine, which is a soda dispensery machine. And you stand there, you press buttons, and you can order almost whatever you want, a caffeine free diet, cherry vanilla, sprit, Yeah. I know. I saw you yeah. III don't know if I would love that labor either, but you get to some massive flexibility of what you get use customizability and they can deliver that at a lower cost and more quickly.

Why is that? They wait until the last minute to mix the syrup with the soda. The old model is mixed to settle syrup with the soda. I don't know, weeks or months ahead of time at a bottling plant far away. Now you can take that and now apply it to health care.

To food, to defense, to work, to every area of life, and then you start getting a glimpse of what would it look like for every industry to wait until the last minute to add the value or bring the value together.

Stuart Crainer: Robert, you're gonna just go back to your previous answer. You're kind of in praise of procrastination. Just to explain that because, I mean, that's the complete reverse of what would be brought up to believe is a good thing in in management and organizational life.

Robert Wolcott: Right. Well, obviously, Stewart, I'm not talking about procrastinating on things that we should be doing. That's a very different. We're talking about setting up technology platforms and business models that encourage us, that incentivize us to be able to be far more effective by waiting until we know exact what the customer wants. And I'll give you an example that builds on the Coca Cola Freestyle machine, the notion that that Kaihan shared and that is a company called on demand pharmaceuticals.

So on demand pharmaceuticals was founded by doctor Jeffrey Laying a military doctor He spent 6 tours of duty in the Middle East, and they kept running out of generic drugs. Now it's not a shocker that you'll run out of generic drugs in a war zone. I mean, that we can all imagine that there are a lot of challenges with supply chains and war zones. But what did shock me was we have generic drug shortages in hospitals and clinics all over the United States every day. Now doctor Lang practices at Johns Hopkins today, 1 of the greatest health systems in the world, and she has generic drug show.

Now all of our generic drugs are made overseas. The long story is the why there are these supply chain issues. With doctor Lync said, this is ridiculous. Organic drugs are made of carbon, hydrogen, and ox. If I had the right equipment, I could make the drugs right here myself, whatever I need.

So we went back to the United States. He got AAA big grant from DARPA, Defense Advanced Research, projects agency, work with the team from MIT, which, by the way, was the same team that helped Coca Cola build the Freestyle machine and they did it. And as doctor Lang would explain to you, the on demand pharmaceutical system is basically the same concept as the Coca Cola Freestyle machine except here's what it does. It sits there with raw ingredients, carbon hydrogen, oxygen. Now for all your friends here who are pharmaceutical industry fans, there are APIs, and some other stuff.

But set that aside. Basically, it's carbon hydrogen off. It sits there doing nothing. Until you type in, I need a thousand doses of atropine. And a few hours later, out come a thousand versus an attribute.

Or you type in, I need 300 doses of SIPraflox, the antibiotic. A few hours later, out comes 300 doses of SIPraflox, and then here's the punch line. They're exactly the same as the drug you'd get at Walgreens. And the FDA, the food and drug administration, has already confirmed that the drugs that come out are exactly the same as you would get in the forest. And so what I mean by procrastination is you obviously need the raw ingredients and the equipment.

In the right place at the right time. But you don't need a massive manufacturing facility in South San Francisco or China or wherever. And you don't need to plan 6 months in advance to hope that you have the done the right demand planning to have the right drugs wearing when they need it. You just need these machines all over the place, and you can have anything you want anytime. And by the way, the exciting parts to work, what's the shelf life of carbon forever?

So when you start to do the math, over time, these things will win out.

Stuart Crainer: Kinda what what are the examples in the book is about on demand picking duck? Yes. Yes. Developed by the Chinese company hire. And they're wouldn't their big idea is 0 distance Yes.

Between the employee hire and the customer. How does the idea of proximity relate to this?

Kaihan Krippendorff: So what Rob described and what I described with the freestyle is 1 company pulling together the components that create value at the last minute. Now much of the value that we get doesn't come from 1 company. It comes from multiple companies. So kind of a next level of proximity is when we have different companies coordinating themselves to wait until the last minute, to bring the value together. Right?

So what Hire did during COVID, people couldn't get out of their house to restaurants, and 1 dish that people love in China, especially but all over the world. That's very difficult to make us peaking duck. So their question was how can we get give people proximity to peaking duck when they don't leave their house because they can't have to get the peeking duck cooked in their house in close proximity to where they are. So they coordinated farmers, distributors, chefs and their appliances into a system that allowed people to simply order The peeking duck, it is delivered. They put it in the oven.

The oven is programmed from the recipe of a chef to cook the peaking duck perfectly for them to serve at home. So instead of going out to a restaurant, instead of waiting for the duck to be cooked, it comes together closer to the to the point of demand. And so if you then take that and then you apply it to the organizational structure of hire, which is really interesting. Probably don't have time to go into it in great detail here. But it forces everyone in the organization to be thinking about the customer to create 0 distance between customer need and the company so that the organization can respond more rapidly because it's a big element of what proximity is is sensing and responding rapidly and closely to the point to chips and demand.

And so there is a technological challenge to that. If your smart device can sense and customers become from physical customers, digital customers, we're constantly being able to get information with them. We can more accurately and more quickly sense what they need, but also there's an organizational challenge of responding to that when that response requires a new product or a new business model. So I think that higher example offers 2 examples of different layers of proximate.

Robert Wolcott: Well and just to put a fine point on it, Stewart, the example that Kai just shared from Hire, from the point they had the idea of enabling people to make making duck at home, to the point that they had sold 20000 docs to consumers was 1 year. 1 year. And that was during COVID.

Stuart Crainer: And how does the idea of proximity go down? You've got a network of CSOs, Cayenne. And between you, you talked to a lot of CEOs and Do they understand the concept to proximity?

Kaihan Krippendorff: I think it clarifies things for them because there are a number of trends, and there are about 12 trends that are top of mind of and some of them include de globalization, decentralized energy, shifts in in in expectations of customers, employees, But, of course, AI, IoT devices, connected devices, digitization, you know, etcetera, etcetera, blockchain, etcetera, etcetera. And they look like a big confluence of trends. But if you group them, you'll see that they all drive 4 things. Number 1, it increases our ability to more accurately and rapidly sense demands and shifts in demand. Number 2, it enables our ability to respond to that demand more quickly in a more customized way both on digital product now increasing on physical products.

Number 3, it enables us to power those responses through decentralized energy, and also blockchain also helps with that. And then it raises the value of proximity because supply lines supply chains have to get shorter. They are getting shorter. Because of the globalization and because there is a greater experience expense by companies for non-environmentally healthy policies. Right?

So externalities are becoming internalized due to increased insurance costs and other things. So all those 4 things say we can sense demand better. We can deliver demand better. We can empower and enable it, and it becomes more valuable, and those 4 things kind of crystallize for them. Oh my gosh.

It's not 12 things. Oh, it's 4 things. Oh, it's 1 thing is approximate. And it's a helpful tool for that reason.

Robert Wolcott: Stewart, I'd like to add to that. And I agree with everything Piyant said, but you know, to be your question was was spot on because when people first hear this, they often think what we're saying is, oh, just respond faster to us. And and that's not really what we're saying. We're literally saying transform the model to wait as long as possible producing provide at the moment of demand. And at first, people don't quite understand, but when they start to see some examples of how dramatically better, and different that it is, then they start to get it.

And there was 1 event of the past few years that helped people understand what we're talking about better than anything else. And that was the launch of Chat GPT. In late November 20 22, when Chat GPT launched to the public, what people this early experience was exactly what we're talking about, which is that blank screen sits there doing nothing from the user's perspective. Now we all know there are servers in Iceland somewhere running in the back but from your perspective as a consumer, that screen's doing absolutely nothing. And then you type in a prompt, and seconds later, you have a crappy speech for your event.

Now it's Europe's job to edit it, make sure it's what you want it to say. But nonetheless, in a matter of seconds, you've got a speech for that very specific purpose based on your prompt, and that's proximity. That system is sitting there doing nothing until there's a specific need and coterminous collocated, it arises on the screen. And that's how dramatically different the near future is going to be.

Stuart Crainer: Think we're obliged to do anything like this to talk ask an AR AI question. So how does this relate to AI? I mean, it's powered by this is all powered by AI.

Robert Wolcott: Well, yeah. Some of it. I mean, not all of it, but there are there are things that AI is not terribly relevant yet, but I would argue probably will be for everything in the future. We'll give you a specific example, and that's health care. In the book, we look at how we work, how we eat, how we create and produce, how we prevent and cure, how we power, and how we defend.

And in each of those chapter is we open with some sort of punch lines. What does proximity mean in this environment that's different from other? And to give you 1 example in health care, proximity compels health care from curing things to preventing thing. Now what I didn't say is, hey, we it's really good to prevent stuff, and it's gonna be cheaper and better, and we'll live longer. That's all true.

But how well has that worked for us for the, you know, past few thousand years. People aren't great at thinking about prevention. But proximity technologies and models in health care will compel things. To prevention because they're far better and far cheaper, and we don't have to do anything. So my father Stewart died of an aolanurism in 20 in 2004, and he had just had a complete physical a couple months prior.

But the doctor said you're in great shape, Bob. Everything looks great, and then he was dead. Now if you think about our health monitoring systems or rings Apple watches, etcetera, they're kind of rudimentary today. But imagine whether they'll be in 5 years or 10 years, when they're monitoring all aspects of our lead system, looking at every weak signal, and there's AI in the background, analyzing those weak signal. And then it sends a note to you and says, hey, Rob.

There's a problem. Go to your doctor. You go to the doctor and the doctor says, you know, it looks like you have stage 0, pancreatic cancer. Not a big deal. Here's what we need to do.

We can solve that. Compare that to where we are today. You wait until you're double over in pain. You're not sure what's going on. You finally take the time to go to the doctor.

They do some tests. And they discover you've got stage 4 pancreatic cancer, and there's really nothing we can do about it. So there's always on health monitoring it gets better and better. I'm not talking about where it is today. Where it will be in 5 years and 10 years.

Will compel us from worrying only about curing things to actually preventing them because we'll discover and resolve problems before they're a problem. So that's 1 example of AI at work in the background. It disappears into our daily lives and it's making our lives longer and better.

Stuart Crainer: So it's about solve solving problems at the right time.

Robert Wolcott: Yeah. And way before they're even a problem.

Kaihan Krippendorff: Oh, I would say I would I would add there's there are many aspects for me. The 3 big ones are. 1 is predictability, which is Rob's alluding to. Wherever we see people waiting for value to appear, that should disappear. We don't need airports.

We need much smaller airports. We don't need waiting rooms. Right? We're not gonna wait in line. And all those spaces get shorter.

So the predictability will change industries. Number 2, is in digital reactions. So with the exception of your podcast and this podcast, I don't listen to podcasts as much anymore. I'm in the shower. And I just talked to chat GPT, and I ask you questions about how would you measure this and tell me more about how you cook that.

Why does Hotpepper get hotter when you cook it or less hot? And I had a whole conversation about it. I could look for a podcast that dress that would've taken me 10 minutes to find it. I probably wouldn't find it, but I could create it there. So it was it was content created for me there.

And the third thing I think is that broadly is adoption of technology. It accelerates technological adoption of any human technological interface because it requires less learning on our part. And so the applications of that are huge across I mean, we can't even, like, name them here. But at least those 3 things are gonna be places that are gonna really drive and FedEx is gonna really help drive proximity.

Robert Wolcott: And Stewart, we learned what Cayenne does in the shower, which is a little odd.

Kaihan Krippendorff: Alright. Well, I'm sorry. I don't know what you do. Yeah.

Stuart Crainer: And even more worrying getting rid of getting rid of getting rid of getting rid of waiting. What about queue? I mean, I'm British. We enjoy queuing. So proximity, what are the obstacles to understanding it and the obstacles to putting it to work that you encounter when you talk to executives and organizations.

Robert Wolcott: I'll start with 2. 1 is the old paradigm, whenever that paradigm is. Typically, companies look at a new technology and they say, how can we use this to be a little better at what we already do? And that's a great exercise, but it's not enough. What we're proposing is there's so much at hand today that we can do things we could never have done before.

And that's an exercise that incumbents really have to get their head around. A second thing I'd offer is the question is not doing I do I throw out what I've already got and build brand new? The question is how do I leverage the value I already have if I'm an incumbent and incorporate proximity to how I do this. In some cases, you really are gonna have to build branding. There's just no way around it.

But in other cases, you can usually, you can find things of value, customers, brands, access, knowledge, even technologies that you can leverage. So to give a simple example, when video streaming happened, sure, Disney had to figure out the whole platform in order to get into video streaming, but they have an enormous library of intellectual property that they can leverage from their legacy. So a question for incumbents is, what do I need to build brand new and what can I leverage for my legs?

Stuart Crainer: And who gets this? You've got some great examples in in in the book. But which organizations have you encountered that really understand the concept of proximity and are putting it to work?

Kaihan Krippendorff: I think it's industries that are more digital than physical because it's harder for you to get their heads around that this is actually happening in the physical world. And then I would say organizations that work within ecosystems systems, maybe have more of a complication doing that because the value that they create is with others. So, you know, tomorrow, I'm gonna give a speech for a group of consumer packaged goods packaging, you know, experts. And the challenge there is that their products because packaging is a physical thing. It's harder for them to understand how this applies to them.

But then, you know, we show them companies like QuickBooks. Which has production facilities all over the world and for about 4000 cup customers in in defense and in medicine, they'll produce small runs of digitally 3 d printed little parts, and they can turn it on, and they can print you a hundred and 10 5 consonants or whatever. It gets not 10 consonants. About in 5 consonants. And so the question then becomes, okay.

So how do we do packaging there? Because we're used to packaging and delivering it to central Now we're gonna have to deliver to multiple locations all around the world. Right? So that takes a little more to get your head around is or physically heavy companies, but it's coming.

Robert Wolcott: I love the example of QuickBooks, by the way. But I I'd love to give credit where credits do. The obvious 1, Amazon. They Jeff Bezos doesn't call it proximity, but that was in his head from the very beginning, and he's explicit about it. He's always said, we do whatever it takes.

To get the customer what they want, wherever they want it, and do it faster than everybody else. I mean, think about think about 10 years ago. If you got something delivered in 2 days, you thought that was pretty pretty amazing. And these days, if it's 2 days later, you're checking your app to figure out what app. And it they're maniacal about it.

Stuart, you remember I don't know. It was before COVID, Amazon announced they were experimenting with drone delivery. And the initial reaction from everybody was kind of, oh, it's fa. It it's a joke. They're doing it for fa.

They weren't doing it for fa. They were experimenting and prototyping way before most other companies. And while we don't see drones flying around here in New Jersey, suburban, New Jersey delivering things. I have seen them in action in developing countries. Early this year, we were I was with a twin world innovation network group in Rwanda.

And they have drone delivery of medical supplies and blood, etcetera, that is able to access the entire country in a matter of hours. And that's something that would have taken decades of infrastructure development in order to be able to do in the industrial age, they can conquer the problem, and they did conquer the problem in a matter of months. And so it's operating right now. And that and that's also exciting to me, Stewart, because it shows that developing countries can use proximity to leapfrog developed countries.

Stuart Crainer: Isn't it? It's interesting that Amazon is kind of underestimated. Isn't it? It's kind of It's so ubiquitous that the brilliance of its well, Jeff Bezos is vision in the first place, but the brilliance of their execution is kind of it's taken it's taken big granted. This is bizarre.

Robert Wolcott: It sometimes it's even terrifying depending on who you are in the value chain.

Kaihan Krippendorff: I think you see a lot of elements of what they've been doing also in most of many of Elon Musk's companies as well. You could explain a lot of the counterintuitive choices that both Amazon and Tesla's SpaceX have chip made from the lens of proximity. They make sense.

Robert Wolcott: Well, actually, that's a great 1. Think about charging infrastructure. People have this notion that we need to have charging infrastructure all of the country just like gas stations. And then I'll buy an electric that's actually wrong. It's completely wrong.

That's taking the new thing and cramming it into the old paradigm, and we do it over and over again. Why is it wrong? Well, because many of us can plug our are in in our garage. And in the morning, it's fully charged. So a number of other companies in the publicly traded, like, ChargePoint have just collapsed because they have the wrong model.

Their model was we're gonna put thousands of these nodes all over the place, and people are gonna go to work and plug their car in. And it's been a disaster. On the other hand, Tesla's supercharger network makes tons of sense. Why is that? Because Tesla places them on for long drives.

And so if I'm gonna take a 200 mile or a 500 mile drive, I need to stop every once in a while to do a supercharge. But I don't really need that charging port at my office. In most cases. And so Elon Musk and team have looked at the new technology on its own terms. And recognize it creates, it enables brand new models.

And so we're we're seeing that play out right now in in electric charging infrastructure, and there are there are lots of people losing hundreds and millions of dollars on bad bets in the past.

Stuart Crainer: A phrase used in the subtitle of the book is just in time. So the subtitled is how coming breakthroughs in just in time transform business society and daily life. Just in time was 1 of those ideas that was fashionable in the 19 nineties. Toyota, but your incarnation of just in time, the proximity, interpretation of just in time is completely different.

Robert Wolcott: It's applied to absolutely everything. And by the way, Stewart, the fact that we didn't do more with Justin's time back in the nineties wasn't because we didn't want to. It's because we couldn't. The technology capabilities didn't exist to do it the best way and increasingly now it does exist. You can think about it as on demand everything.

So our sort of punch line for proximity is anything anywhere, anytime. And that's where everything's trending for the rest of at least our lives.

Kaihan Krippendorff: Yeah. Maybe you could also say, until now, Justin Time has meant getting it there just in time. And now what we're saying, it is actually creating it just in time.

Stuart Crainer: Yeah. Important differences. On demand everything, how does this fit in with sustainability? It seems to contradict it in fundamental.

Kaihan Krippendorff: It can go a different way we hope and if we manage it well, it can really help with sustainability. You know, for example, going back to packaging, when we need to source and produce things closer to where they're needed, it forces us to look at things like there are a couple interesting British companies that take Seaweed, and from Seaweed create packaging that looks and behaves a lot like plastic, but is biodegradable and edible. Or can take stone or mushrooms that can be locally produced. And that reduces our dependence on long supply chains, but it also Not coincidentally, but casually also shifts us away from plastic. So when we make the right choices, we can make a decision that improves proximity and reduces environmental impact.

And just imagine not having as much stuff flying through the air or working their way across oceans burning fuel that pollutes. What if we have less of that? So there is a great opportunity, and we have to manage it now to make sure we achieve that.

Robert Wolcott: So to build on that, we can do it right or we can do it wrong, and we're seeing both right now. To give a specific example, everybody's talking about is it Taimu and sheen or shine? I don't even know how to say these things. But yeah. You can go on and get that cheap sweater, and they'll make it for you and China and brought on a cargo jet and send it to you, isn't that amazing?

It's a version of proximity in the sense that it brings that battery in China far closer to your specific home when you want that 1 sweater. But it also is putting a lot of stuff on cargo jets. And that can't be great for the environment. And do we really need that kind of responsible? By the way, Stewart, there's another thing embedded in Taimo's model and peculiority of trade law called de minimis, and the fact that they're sending packages that are left worth less than, I think, it's 800 dollars.

Means they are absolved of trade tariffs. So III will bet that sometime in the next couple years, that problem will be will be perhaps resolve. But that said, that's an example of proximity, but it's delterious to the environment. On the other hand, Consider the fact that the entire global textile industry, every year assumes that 30 percent of everything they produce is gonna go into a landfill. By the way, what I'm not saying is that later after Rob wears the thing and throws it out, what we're saying is 30 percent of everything produced by the global textile industry each year.

They assume will be in a landfill before it's ever owned by anybody. It's just by any consumer. They're gonna produce it, and it's gonna go straight into a landfill. So you wanna talk about opportunities to dramatically decrease waste and improve sustainability textiles and food are too big.

Kaihan Krippendorff: 38 percent of food that we grow is wasted, and yet people are starving. And a lot of that is wasted as the food makes its way through meandering channels to hungry mouths. And it rots on the way.

Stuart Crainer: What timelines are we talking about here with proximity? If you look 5 years ahead, 10 years ahead, 20 years ahead, What do you see? How is it gonna play out? Do you think?

Robert Wolcott: Great. Well, in some things, we're already there. Think about video streaming. You can watch any video anywhere, any time. Now we take it for granted.

Now it's like, oh, yeah. That's old news. But that's proximity writ large, and it's already there because that content is 100 percent digitalized. What isn't, for instance, though, is the production of that content. And that happens months or even years in advance.

But what are we seeing now with generative AI? The beginning of content that can be created from whole cloth real time. Responsiveness to Stewart creators needs desires that are or moment. And we're just at the very beginning of that. So the production of video content is rapidly becoming approximate possibility.

Look in different industries, the timelines will be very different. But, Stewart, 1 of the reasons that Kaihan and I feel confident to make this this bold assertion that proximity is coming for every industry, the rest of our careers, is that the 2 horizons of the 20 first century for humanity. Space and virtual reality. We've never been there before. Space and virtual reality are 100 percent approximate.

What do we mean by this? Well, when we were doing research for proximity, I talked to Dori Dhanovial, who's a professor of space health at Baylor. By the way, that's a pretty cool title professor at Space Health. And she runs a grant program for NASA to do research in Space Health. And when I was describing proximity to her, she said, oh my god, Rob.

Everything we're doing research on investing in is to drive proximity. I didn't know that. But everything we're doing to help humans thrive in space requires props. Why is that? Because when you're on a spaceship for 7 months to Mars, You've only got what's on the spaceship.

There's nothing else. So you can't call Amazon because you forgot something, at least not yet. I'm sure Jeff Bezos team will figure that out. But space is driving us toward proximity, and a lot of the research going on there is flowing back to the earth. To change our models here on earth.

And finally, virtual reality, as VR gets better and better, gets more comprehensively experienced as quote, unquote, real, then by definition we'll be able to have any experience anywhere, anytime. And so these 2 realms of life will be entirely approximate in the not too distant future. 10:20, 30 years.

Stuart Crainer: There's a real sense in the book of a huge wealth of opportunity being presented, and there's a feeling of optimism. Am I being I reading it reading it right?

Kaihan Krippendorff: I think so. Yes. I think that what we expect the future to be is what we create, and so there is a bit of circularity to that. We believe that if we can create a future that works for humanity and the environment that if we can envision that, we'll create that. And so we are presenting at that.

But we present it because we believe it's possible. I believe it's possible.

Robert Wolcott: And also, Stuart, Kaihan and I are both optimistic, but we're also realistic. And So in each of the chapters, we spend some time talking about maybe the downsides of proximity and where these things might go. And there is a whole list of but 1 of my favourite things to do is read dystopian science fiction, the dystopian literature. Not because I love dystopian. I mean, it loves dystopian.

But because it gives us a sense for what we don't want. And so in the book, we spend some time talking about issues like how will humans cope when we can have anything anywhere, anytime. We our history is not a good 1 when we're faced with abundance if you think about things like the obesity crisis. Right? So, yes, overall optimistic, extraordinarily excited to see the future unfold.

But also with some healthy caution.

Stuart Crainer: So, proximity is out now, and it is a really good read with some fantastic examples. Hi, and Rob. Thank you very much.