For anyone who buys a $40 chicken over the internet to eat, authenticity is important. Whom or what you trust to do the authenticating is one of the many questions Xiaofei Wang asks in her 2020 book "Blockchain Chicken Farm and Other Stories of Tech in China's Countryside".
I like this book. It provides a feel for rural China and the changes that are in store for it. It also contains unresolved questions involving life, technology, and government. Weirdly there are also three short chapters containing recipes presented as if the author had a time machine and had brought us to the near future.
I didn't take the recipe chapters very seriously as they seemed to have the flavor of bad science fiction. On the other hand I found it well worth my while to think about many questions that Wang brings up without providing direct answers.
Described below, blockchain tech is often presented as a way to avoid needing to trust anybody. Wang asks whether that is really true or do we have to trust the blockchain developers? Why should we consider the developers more trustworthy than a government?
This last question got me asking myself: why we distrust government so much? A new (for me) answer came to mind: when a government makes a serious mistake it cannot walk away from that mistake whereas when private industry makes a serious mistake it can. If necessary private industry can even create a new brand or a new company. The result is we remember government mistakes.
Here are the examples Wang uses as sources for thought.
a chicken farm that relies on blockchain technology
a pig farm that relies both on both artificial intelligence and biological technology
a self educated operator of agricultural drones and an urban high school that offers online education to self-motivated rural students
a village hoping to attract tourists
a village that produces costumes for the world
urban policing of migrants which like American policing concentrates on those who haven't been assimilated into the mainstream
a village that produces pearls for the world
a lo tech rice growing cooperative
Ali Baba makes a constant appearance in this book. Its Amazon-like shopping platform, Taobao, has twice as many customers as Amazon does. In many villages one can buy raw materials and sell products through Taobao. Villages which only recently got their first paved road to connect them to the rest of the world are now producing products sold elsewhere including in the U.S.
China has had some serious food scandals: counterfeit baby formula, adulterated pickled vegetables, counterfeit alcoholic drinks, and soy sauce made from human hair. In a country where 98% of the farmers work on a land area of less than two football fields the distribution system is complex and therefore fraudulent intermediaries find it easy to insert themselves.
From an American viewpoint an authoritarian government ought have no trouble cleaning up such problems. We are wrong. What we do not understand are the difficulties of governing a country much of which is rural and backward and where a third of the 1.4 billion people belong to various minorities that do not have Mandarin as their native language.
Americans are used to relying on brand names as a way of guaranteeing quality. In the online markets of Amazon and Ali Baba relying on brand names can be problematical because of the ease in which fakes can be inserted.
Although they may not think of it in just this way, some Chinese producers are creating brand names and protecting them with blockchains. The blockchain chicken farm whose English name is GoGoChicken is an example of this.
Blockchains help protect the GoGoChicken brand name because they provide certificates that can be copied but not altered or faked. This is done with encryption technology. But having an unalterable block or certificate is not enough. Ask yourself "who's going to provide the certificate for upscale chicken meat?" The GoGoChicken farm cannot do it because the unalterable certificiate might be substituted somplace during the complex chain of middlemen. Retail vendors cannot do it because they need assurance that their previous suppliers have not been compromised. This is where the "chain" in "blockchain" comes in. Each certificate or block is linked to an earlier one. All intermediaries are covered, back to the original farm.
Of course there has to be a link between the certificates and the chickens they certify. On the farm each chicken is given an ankle bracelet with a QR code that a smartphone can use to access its blockchain. Accessing the QR code provides the key necessary to read the most recent certificate in the blockchain. The dead, plucked chicken is delivered with ankle and bracelet intact.
Because each step of the chicken's path from chick to the customer's door is documented in a way that can be accurately traced, the blockchain makes fraud much more difficult and so customers of GoGoChicken can have the same kind of product certainty that we Americans are used to getting from our grocery stores.
Ali Baba has created general stores that control their supply chains. These stores are named Hema. You can buy with confidence at Hema stores if you live in some Chinese cities but you will pay for the privilege.
As China transitions from a from a third world economy to a modern economic power, it needs to better educate its people and in particular its villagers. Ali Baba helps with digital literacy as it sets up ecommerce in villages. Over 3,000 villages are buying, producing, and selling through Tabao.
In addition a few rural residents are acquiring tech skills on their own. The drone operator interviewed by Wang is an example of this.
But a modern society needs good formal education and in China’s rural areas this is no where near present. The one effort in this direction Wang writes about is at best a mixed success. High school #7 in the city of Chengdu has set up an online education program for over 70,000 students. In its first year of operation the program’s only accomplishment seems to have been to show rural teachers and students how far behind they are. However by year three a few students were using the program successfully. In that year the number of rural students in that area who passed the gaokao university entrance exam had risen from only a couple to 88.
Almost certainly those 88 students are quite exceptional and China will benefit from their future contributions. But it is far from clear that the average rural student benefits much.
To change the subject while still talking about exceptional individuals, there is a probably apocryphal story about Bill Gates and Steve Jobs that supports one of Wang's major points. It seems Jobs was complaining to Gates that Microsoft stole the graphical user interface Apple had introduced with the MacIntosh. To this Gates said something like: "That's not the way I remember it. What I remember is going to Xerox Parc to steal their GUI but I found that someone had been there before me."
The point is that innovation requires us to be able to copy and improve on what already exists. Intellectual property laws inhibit this process. We have been told these laws exist to reward disruptive innovation but the real goal may have been to let large corporations make their money by owning things rather than creating them. A line from a Leonard Cohen song comes to mind here: "looking for a card so high and wild, he'd never have to deal another".
Not only have we Americans created intellectual property laws to protect disruptive innovation from incremental improvements by others but we tend to look down on incremental innovation.
Not so in Asia where incremental innovation is admired. Wang describes this kind of innovation as building "on each other's work, co-opting, repurposing, and remixing in a decentralized way."
In her book "The Girl at the Baggage Claim, Explaining the East-West Culture Gap" Gish Jen distinguishes between the Western genius, who does disruptive innovation, and the Asian master, who does incremental innovation.
In actuality both types of innovation are needed. Apple is an interesting example. The point and click GUI developed at Xerox Parc was disruptive but it took Job's incremental approach to make a better PC with it. Later Steve Job's concept of the IPhone was disruptive, but the manufacturing of that phone depends on China's incremental innovations in production.
Henry Ford is another example. He didn't invent the automobile. His disruptive innovation was the way he organized a factory for building one.
Caught up in adulation of the disruptive genius we tend think that the incremental innovation popular in Asia isn’t innovation at all. In so doing we are turning our noses up at something that is quite valuable. Wang interviewed a Chinese-American analyst for a venture capital firm who explained the advantage of good incremental innovation this way: "I have American apps that I open once a month and delete. But there are some Chinese apps that I open multiple times a day."
With these thoughts in mind I did not find it surprising when Wang pointed out that American tech companies have not done well in China whereas Proctor and Gamble, Kentucky Fried Chicken, and Coca Cola have. If you check out the three Forbes references below below you will see that those three companies expect their executives to master the consumer markets in which they operate. Their innovation adds products incrementally from that knowledge. No wonder they fit into Chinese culture.
Not only does the world need both disruptive and incremental innovation but the innovations created by Jobs and Ford indicate that both kinds of innovation depend on what already exists. Locking up what already exists with ever more stringent intellectual property laws does not help innovation. Wang wants us to understand that the Chinese may be more right about this than we are.
The examples in this book show China is remaking itself with incremental innovation. The last example of the rice farming cooperative was thrown in to show how China has always been developing incrementally. The rice cooperative has a very clever way of treating its members fairly and protecting common property. But it is lo tech and took years (probably centuries) to develop.
More
Use this button to share this post with a friend
Or copy the link to this post
https://cogitamus.substack.com/p/blockchain-chicken-farm
Cogitamus Home Page
Other Posts (With Comments)
References
"Blockchain Chicken Farm and Other Stories of Tech in China's Countryside", Xioawei Wang, published by Farrar, Straus, and Giroux, 2020 (available in paperback and ebook formats)
"The Girl at the Baggage Claim, Explaining the East-West Culture Gap", Gish Jen, published by Knopf, 2017 (available in hardback, paperback, ebook, and audio book formats)
https://www.forbes.com/sites/paultalbot/2019/04/26/inside-coca-colas-marketing-strategy
https://www.forbes.com/sites/aliciakelso/2019/07/22/a-look-at-the-menu-innovation-driving-kfc-globals-sales-momentum
https://www.forbes.com/sites/kimberlywhitler/2019/04/13/how-pg-ventures-is-dispelling-the-big-company-myth