How the Canaries can benefit from digital supply chains

  • Canarian Weekly
  • 25-05-2024
  • Business
  • Photo Credit: Boluda
How the Canaries can benefit from digital supply chains

A supply chain is the provision of goods from one company to another so that they can deliver a service or product. A tomato on a supermarket shelf, for example, does not get there by itself. It has a lengthy process in the supply chain, being picked by a company, transported by another, packaged by another and then finally retailed at the end of the chain.

Yet in the digital economy, how do supply chains work? And how can they benefit the Canary Islands? 

What Is a Digital Supply Chain?

The above example of a typical supply chain operates linearly. Yet when delivering digital products, the supply chain can be described much better as a web. Instead of passing goods from one person to the next, it is often critical to know what others in the process are up to, so decisions can be made on the next step. 

Take an app development company for example. They may have many different people working on the app itself. This can involve the client, UX designers, programmers, graphics designers, and marketers. As each has an input and provides a piece of the puzzle, the supply chain becomes a web.

When a physical product becomes involved, this becomes even more complex and melds the two. Asset management, warehousing and shopping all become a part of the process. Keeping track of this stock and using data to manage the process is digital supply chain technology.

How Can the Canaries Benefit?

Whole online industries are built around extremely complex digital supply chains, and certain areas have become a hub for them, bringing in tax and revenue. One case study can be that of the iGaming industry. From game developers to casino operators, each has played a crucial role in pushing the industry forward in terms of research, development and revenue. All of this has been watched over by statistical supply chain information, on which games are being played to what offers new players prefer.

The hub of this has been Malta, an island nation with its autonomy. Not dissimilar to the Canaries, the right industry and enticement for supply chain providers could provide new revenue streams here as it has done there. 

For the Canaries, their geographical location does not lend themselves well to being the end part of the digital supply chain. They are away from Europe and Africa. This means they are more likely to benefit as the providers of digital technologies and the provision of asset management. How to attract those who create this technology to the Canary Islands is a big question. 

One way could be to create attractive schemes for digital nomads. Many of these developers operate from a laptop, and with the warm climate, it may be a great place for them to work. Other countries have adopted digital nomad policies, and the Canaries could feasibly create their own. 

Less likely would be the ability to make opening a business easier and drop the tax rate, as Ireland has done. However, this may face opposition from the wider Spanish government. If the Canaries can make provisions though, it would have a positive knock-on impact for the whole Spanish economy.