Economics of Supply Chains with Application to Water

• Agricultural Economics Workshop

Date and Location

Thursday, November 17, 2022, 4:10 PM - 5:30 PM
Online Meeting, Zoom

Abstract

I'll present our recent PNAS paper, where we analyze the transition from innovative ideas to final marketed products. This transition occurs through two synergetic supply chains for innovation and products. Basic concepts are developed, tested, upscaled, and introduced to commercial use in the innovation supply chain. Then, the products are produced and delivered to the consumer through the product supply chain. We argue that product markets trace their birth to product innovations. These markets tend to start as noncompetitive, which rewards innovators. Credit access and risk determine the reliance on contracting and product diffusion over space and time. This understanding will help the development of policies to address the challenges of climate change and food security, among others. We apply this framework to analyze the supply chains of innovation affecting water (pumps, irrigation systems) and surface and groundwater supply chains. We argue that water innovations result from public and private collaboration and are affected by political/economic considerations. Government policy objectives, public finance, and economic parameters have affected water distribution systems and are evolving over time. The history of California's water innovation and supply chain illustrates our conceptual framework.