Why Not Rent? Vertical Farming and the As-A-Service Model
By Mark Horler *Original image - Illumitex FarmedHere
I’m a bit of a futurist at heart, and a bit of a utopianist one at that. I believe that technology can be used to radically change the way we do things, and that by utilizing the right organizational models with those technologies, we can make our world better. As someone who works in the vertical farming movement, this should not perhaps come as much of a surprise!
But it extends beyond just that. I like to keep my eye on many technologies and especially on changes to those systemic organizational models. One result of this, is that I find myself reading ever more articles making the claim that ownership will eventually become obsolete. The basic idea is that we will move to a model where instead of going out and buying things we need, we will simply rent them temporarily, when we need them, and then give them back. The concept is explained well in this article.
Essentially, we overproduce stuff now, so that everyone can have any given thing. We have been sold the idea of consumption and market-driven lower prices, as a democratization of ownership. The result of this, inevitably, has been massive over-consumption. We all have a cupboard full of stuff we rarely if ever use, or a drawer full of obsolete phones. We all have cars, in which we sit in traffic jams, caused by the overabundance of cars! The list goes on. Most importantly, we don’t account for externalities in the cost of this consumption, so we are putting ever more pressure on the ecosystems upon which we ultimately all rely.
However, many people argue that we are now reaching the point where technology can provide this new model. The most often referenced early signs of this exist in services such as Uber, where we pay for taxi services on demand from wherever we may be. It has been pointed out that in combination with self-driving cars, this will enable us to mostly give up having cars in urban areas - we just call for a self-driving car whenever and wherever we need it, and then it goes on without us to the next job thereafter. This model can be extended to all sorts of areas, of which there are just too many to list them here.
It is also argued that, as we switch to building things for rental, rather than ownership, the whole way we make things has to change. It’s not just that we would make far less things, because the same item can be used temporarily over and again. Once we start doing that, it becomes imperative to make products that last. The company that can make an item that can be used 100 times, will ultimately bear less cost than the one producing an item only good for 50 uses. Suddenly built in obsolescence becomes entirely undesirable. Quality becomes the driving factor of success, not quantity.
So how does all this relate to vertical farming? Well, this is where it gets a bit odd. It is well known that arguably the biggest obstacle to starting a vertical farm is the high capital cost of setting up the farm itself - that is to say, the price of buying the kit. Where farms do invest that money, they have to get it from lenders of one sort or another (few have the resources to buy it up front). That means pressure to get profit, to repay that investment and the interest upon it. That in turn, limits what it is possible to do with vertical farming. Vertical farmers have little choice but to grow only the most premium products for the most premium markets. At the same time, companies producing this equipment and these systems have to accept that the large prices limit the amount of sales they can make. A limit is therefore placed on the ability of the industry to expand.
So we find ourselves in the unusual position, whereby an industry at the cutting edge of technology, is reliant upon an outdated business model, that stops that whole industry from fulfilling its potential.
*Original image - Illumitex FarmedHere
Yet the answer is right there in front of us, in the form of the as-a-service economy. If these systems can be manufactured, they can be rented. This is great for the growers, because suddenly they can start a business without a massive financial obstacle to overcome. It’s also great for the manufacturers of the equipment, because they get a regular revenue stream from a much larger number of customers. Additionally, there would inevitably be contracts for maintenance, for example, which could create a whole new wave of skilled jobs.
It’s surely time for vertical farming to embrace this as-a-service, on-demand model, at the very least as a viable alternative to the conventional ownership model.
