Fear of Sputnik led to Internet

Industries such as automotive and aerospace are investing heavily in "ebusiness" technologies. Now it's coming to agriculture. What is it? How will it impact agriculture? What will it cost? Will it mean lost jobs?

Business has long sought to collect information from multiple independent sources. Is my ship on course? Is it heading for an iceberg? What captain of industry would rely on a single indicator to answer these questions? The question highlights not only the value of multiple sources of information but also the value of getting quick answers and quickly communicating decisions.

The complexity of shipboard communication systems and the time it takes to change the course of a large vessel are analogous to the complexity of business communications and the time it takes to communicate a strategic re-direction through a company. Understandably, business holds that the more information you have to analyze the situation and the faster you can get that information and effectively communicate decisions based on analysis, the better off you are. Its primary tool to realize all of this has become the networked computer system. When business adopted the Web, the network became global and that changed everything. As the dust settles, business is investing heavily in "ebusiness". Before we look at ebusiness and what it can mean for Agri-food, let's look at how we got here.

The Internet and the Web

Never before had so small and so harmless an object created such consternation.
- Daniel J. Boorstin

It weighed 1831bs and was about the size of a basketball. In October 1957 it flew over Americans at an altitude that was beyond the reach of their defense systems. Sputnik scared America. The military wanting to ensure it could maintain control of missiles and bombers after a nuclear attack, financed the design of a network that would figure out how to get data from one computer to another, even though much of the network might be destroyed. That initiative became the Internet we know today .(1)

During its first thirty years, the Internet grew to connect over a million computers. It was used primarily by military and academic institutions and it was at a research facility (CERN Switzerland) that Tim Berners-Lee invented, in 1990, the technologies that today enable the "Web". Where the Internet had addressed how to move data, Berners-Lee created the tools for any computer to present data in a visual way - the first "browser" - and standards for creating "links" from one electronic document to others, creating a "Web" of data on the Internet.(2)

CERN didn't immediately see the potential in what Berners-Lee had created. Others did. Mark Andreessen and Eric Bina at the US NCSA created Mosaic - a more powerful browser that could display pictures - worth a thousand words. Of all the changes, this, when combined with a worldwide cheap network, was what drew the attention of business - it was simply a great marketing vehicle. Over 10,000 copies of Mosaic were downloaded within weeks of it being made available (free) in early 1993.(3) In late 1993, there were about 500 computers serving information that could be viewed with a browser. A year later, there were 10,000 such Web servers and 10 million users! Two thousand of the servers supported business applications. The Web began to shape the future. In February 1995, it was the main agenda item at the meeting of the G7 in Brussels. But ebusiness needed more than a global network and data links.

Privacy and Identity

Barring that natural expression of villainy which we all have, the man looked honest enough.
- Mark Twain

Business relies on trust between buyer and seller. Know your customers. Know your suppliers. The Web is changing the way business is conducted; yet trust remains a prerequisite. Following on the work of Berners-Lee and Andreessen, the Web was embraced by business as an advertising medium. And rightly so - it was a cheap way of getting information about a business' products and services to a large, worldwide and rapidly growing community. The next step: take orders. For that, one needed a means of private data exchange and the ability for each of the transacting parties to confirm the identity of the party at the other end of the communication line.

Mary, Queen of Scots - a casualty in a contest that provided private electronic communication

The science of cryptography had progressed to the point where it could address these requirements. Cryptography has an intriguing history: a contest between the encoders - those who design methods of concealing a message - and the code breakers - those who determine methods to disclose a hidden message. A code breaker provided the evidence of conspiracy that led Elizabeth to execute Mary Queen of Scots. Polish mathematicians broke the German "Enigma" code allowing the allies to gain the upper hand in WWII. But encoders took a giant step ahead in the late 70's with "Public Key Cryptography" and there are no indications that code breakers will catch up in our lifetimes.4 PKC is used both to encrypt data transmission and to identify the source of the transmission - privacy & identity. But PKC requires a lot of computation. Again, it was in the 90's that personal computers caught up and could quickly encode messages and decode received messages using PKC.

So the stage was set - we had the Internet, the Web, commercial cryptography and the processing power of a personal computer which was greater than the Pentagon had when Sputnik flew over America.

Ebusiness ,Ecommerce, EDI

The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.
- George Bernard Shaw

Ebusiness is the work of unreasonable men who hold that business should be more efficient. The term was introduced by IBM to distinguish its ecommerce products and services from those of competitors. Ecommerce/ebusiness encompasses any initiatives to convert manual and paper-based business processes to automated electronic processes. EDI, Electronic Data Interchange, is one of the oldest such initiatives, dating back to the 60's. When discussing ebusiness, it is important to understand the processes that are being made electronic and the methods by which automation is effected. In the Web era, the methods have advanced considerably.(5) Much of the focus today is in the area of supply chain automation.

Those familiar with the Web will also be familiar with "Google". Google is the most popular Web search engine - a tool to find information on the Web. It serves to illustrate this fact: the Web has become the largest collection of human knowledge ever assembled and it's publicly available for the price of an Internet connection and home computer. It has become the primary resource for academic and business research and it continues to grow at an unprecedented rate.(6)

Business sees the opportunity to establish similar cumulative knowledge bases at an industry level. Fierce competitors in the automotive industry (Ford, GM, Daimler-Chrysler et al) have collaborated to form a single ebusiness facilitator to serve the industry. The facilitator enables private secure data exchange between trading partners and alliances throughout the supply chain. The facilitator centralizes the work of connecting any one business to the industry communication network - containing the cost while distributing the communication benefit to all. Key byproducts of the data flow include a central online registry for supply chain participants and a data goldmine that can be searched for statistical data -"Google the industry". Let's look at what this can mean for Agri-food.

What would you like to know?

Computers are useless. They can only give you answers.
- Pablo Picasso

I not only use all the brains that I have, but all that I can borrow.
- Woodrow Wilson

In Agri-food, an ebusiness facilitator can make it easy for buyers and sellers to exchange data electronically between their computer systems - automating the flow of orders, invoices and payments while reducing human error and its associated costs. The facilitator will focus on common data types exchanged in volume between participants - weigh tickets, purchase contracts, storage receipts, acres planted by crop, purchase transactions, payments etc. A single facilitator maximizes the aggregate statistical data value. The facilitator can also make sensitive data (e.g. product traits and pricing) available to and only to the intended parties. Imagine......

An ebusiness facilitator enables efficient intercompany dataflow and creates a shared industry knowledge base.

As a producer, being able to examine the history of your transactions with any buyer - the acreage of a particular commodity planted within a 100 mile radius - the average farm gate price of a commodity in your county, this month, this week, today - how many tonnes of a commodity are in storage...

As a grain elevator operator, being able, from office or home, to examine the history of your transactions with any producer or buyer - the acreage planted of a particular crop within a specified area - target input pricing information to producers based on scheduled crop rotation...

As any supply chain business, the elimination of most of the paper-based processing and associated human error and the ability to electronically contract, transact and pay securely and with financial guarantees. It's an old promise, but, with Web era technology, only participation separates Agri-food from this reality. Participation drives value - inform and be informed. The premise is that it is better to have, than not have, information.

The Web is also an excellent tool for collaborative work. Imagine, as a producer, being able to view the profiles of consultants, contract with one for services and assign that individual access to your draft Nutrient Management Plan. The completed joint-effort would be filed electronically, as would field reports that attest to compliance or non-compliance -the record would be maintained online available to you and to the regulatory authorities equally.

In a similar fashion, where produce can be segregated through multiple stages of processing, the parties involved can add to a single record detailing where and how the produce was processed. That is, to the extent that "field to fork" tracing is implemented in physical processes, a parallel data record can and should be maintained via an ebusiness facilitator.

Job Threat or Job Security?

Change is the constant, the signal for rebirth, the egg of the phoenix.
- Christina Baldwin

Supply chain automation requires the participation of key players in the supply chain - or the large buyers that dominate the industry may drive it, as has been the case in the automotive and aerospace industries. It is difficult if not impossible for a small intermediary player to independently move toward supply chain automation - they can only economically justify leveraging a network that is already in place. But once the initial investments have been made, it can be surprisingly economic to join in.

The cost in jobs is another matter. Automation causes change and often means that roles that currently employ people will not employ those people tomorrow. The jury is out on whether automation reduces jobs. America's international competitiveness is attributed to its level of automation, creating jobs in America that would otherwise disappear overseas. If automation truly makes a business more efficient, is that business really doing its employees a favour by not adopting it?

What will happen to your business when a competitor adopts the automation process? And they will. If a business persists in falling behind, it will eventually not employ anyone. If a business is to survive and employ over the long term, it must perform efficiently as part of the supply chain. This does not mean that a business must be the lowest cost competitor. It is how efficiently it operates as part of the supply chain that determines its success. A business may charge more for its products or services than competitors, but if its interaction with suppliers and customers is automated so as to reduce their costs, it may be part of the best value supply chain. Supply chains are implementing Ebusiness to this end.

Because the Web is global, it is crossing trade barriers and the push for globalization has brought protectionist policies under pressure. Canadian Agri-food is familiar with the impact of international competition on trade. If the barriers come down we will need to be as efficient as we can possibly be. What is needed in Agri-food is an ebusiness facilitator that is guided by and responsive to representatives of each supply chain constituency - producers, grain elevators and other intermediaries, terminals, food processors, financers - one that respects their rights of data ownership and provides equal benefit to participants. What is needed is participation.

For more information about Eleview (formerly Agri-eBusiness Group) visit www.eleview.ea

(1) Today, with over 15 million servers connected via numerous high-speed phone and satellite networks, bringing down the Internet would mean bringing down all telecommunications.
(2) Berners-Lee now heads the W3C (World Wide Web Coalition), which governs development of Web technologies.
(3) In March of 1994 Andreessen left NCSA to form Mosaic Communications Corporation, which became Netscape. Up to that time, it was difficult to imagine a scenario that would threaten Microsoft's dominance of the computer-user interface. Netscape became the first serious threat to that dominance.
(4) The U.S. Government lists PKC technology under munitions and restricts its export because they can't break it. Commercial applications of PKC are legal in North America and as far as the rest of the world is concerned, the cow is out of the barn.
(5) A key development is XML - an important advance over EDI standards. Where HTML describes to browsers how data is to be presented visually to people, XML presents data in a form that computers can process - a key technology for ebusiness.
(6) A Google search I ran just now, for example, for information on "Inventory Management" produced almost 1 million result links in about 1/1 Oth of a second.