KNOWLEDGE CAPITAL AND THE RESOURCE CHALLENGE

V11OV

Summer 2012

This article explores the material resource challenge facing the food industry – a challenge which is increasingly termed the need to ‘produce more with less’.

It outlines how businesses involved in the production of food i.e. farming, processing and manufacturing, will need to change if the supply chain is not only to rise to the production challenge but also in ways that deliver ecological sustainability within a framework where economic sustainability remains front and centre. Regular readers of VIEW will be well aware that in order to meet global demand for food, supply will have to rise by 70–100 per cent by 2050.

This forecast is based on the important assumption that the entrenched positive relationship between rising per capita incomes and the consumption of meat and livestock products will continue in developing countries. The challenge in meeting this demand is that the food industry will not be able to rely on the same rate of increase in non-renewable material resources e.g. oil, water and commodities that has enabled it to meet the growth of demand to date.

KEY POINTS
Figure 1: Total factor productivity growth
Figure 6:  Using knowledge capital for business success
Using knowledge capital for business success

Contributors to Knowledge Capital

We have sought in this article to raise the importance of knowledge capital to food companies in meeting the challenge of sustainable production and procurement as businesses face volatile prices and greater risks in the procurement of material resources. Investment in fixed capital will continue to play a major role in translating technological advances into sustainable production but investment in the capture of information and thereby the creation of knowledge capital will not only be critical but also is more likely than fi xed capital investment to create competitive advantage.

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