How Smart Devices Will Impact the Minerals Supply Chain

Connectivity is the theme of the 21st century. Smart devices are a mainstay of everyday life. Everyday technology - cars, cellphones, watches and more - use sensors, actuators, network connectivity and software to gather information about the world around us.

Investment in connected devices is due to expand considerably over the next several years. According to Machina Research, the total number of objects connected to the internet will rise at a compound annual growth rate of 16 percent over the next nine years, reaching 27 billion devices by 2025. Research firm Gartner also predicted that, in 2016, there would be about 6.3 billion smart devices connected to the web.


Identifying Conflict Minerals in a Smart Device 


The smart devices used to create smart factories, buildings acting on machine-learning algorithms and other technological wonders aren't going to appear out of thin air. Behind every sensor is a complex supply chain, with dozens of minerals moving across oceans, borders and factories.

Assuming manufacturers will use the same minerals in smartphones, laptops and other electronics to produce smart devices (barring any major innovations that could be implemented tomorrow, they will), demand for conflict minerals may increase dramatically over the next several years.

In an ideal world, tech companies would be capable of cost-effectively identifying the origins of the minerals they procure. However, such an endeavor is not as easy as the layman would assume. International Business Times reported that U.S. companies currently spend millions conducting due diligence on their supply chains and disclosing whether their materials may have originated from conflict regions.

What options do tech companies have? Current solutions involve contracting independent third-parties to conduct due diligence, verifying smelters and gathering detailed information regarding their supply chains. Such partners often have the resources and technology required to either confirm or reasonably estimate the origins of one's products. Source Intelligence, for example, continuously updates a massive database of smelters throughout the world, enabling its clients to access this portal to verify their own supply chain practices.


Exploring Alternative Options 


The Dodd-Frank Act's stipulation that companies must disclose their use of conflict minerals may encourage tech enterprises to leverage their procurement practices as a competitive advantage.

Consumers are becoming more cognizant of how their decisions in the market impact individuals across the globe. Theoretically, a business could take advantage of this awareness by integrating its due diligence efforts into its external communications and appeal to consumer sentiments. However, the company in question would have to prove it has taken extensive measures to identify and remove conflict minerals from its supply chain, which is no easy feat even with assistance from due diligence partners.

Another option is to invest heavily in research and development in hopes of discovering more sustainable smart device designs. For example, an engineer could design a sensor architecture that requires a fraction of the tantalum needed to manufacture current devices.

The ethical benefits of R&D go beyond smart device architecture design. Scientists are going one step further by researching how to use alternative materials in smart device manufacturing. Such efforts could ultimately eliminate demand for select conflict minerals, removing the risk of procuring such materials entirely.


Current Innovations and Prospects 


One of the factors motivating tech companies to research new materials is the prospect of increasing devices' computing power while decreasing the amount of energy required to support those machines. A possible consequence of this investment could be a transition away from conflict minerals.

For example, AKHAN Semiconductor, a company based in Illinois, is developing CPUs made of synthetic diamond instead of silicon and other minerals. If successful, AKHAN's technology could cause a massive shift in the industry. In addition, because the diamond is produced instead of mined, such an industry may not encourage mining in conflict-ridden regions throughout Africa.

The innovation doesn't stop with AKHAN. Optical computing, which uses photons to process data instead of electrons, could decrease demand for conductive materials such as gold, tantalum and tungsten. Optalysys, a U.K. enterprise, successfully developed an optical processing system capable of performing calculations used in aerodynamics simulation, genomics and financial analysis. The company noted its solution is at Technology Readiness Level 4 - NASA's scale for deducing a product's maturity.

The incentives that drive the IT industry will change based on the innovations that arrive on the market. However, banking on such innovations isn't enough.  The demand for conflict minerals mitigation is immediate, and the urgent call for supply chain transparency is expanding to new materials every year. To effectively manage these rising expectations from consumers, investors and non-profits, companies need to ensure that they dedicate sufficient resources to collecting and validating information on their supply chains. That's where Source Intelligence can help. Click the button below to learn more about our conflict minerals solution!


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