Seven Predictions for Sustaining Innovations in the New Year

Wednesday, January 2, 2013

    

Depending on your perspective, last year’s cup was either half-full of advances, or half empty. What does 2013 hold in store for sustaining innovations? Here are my predictions…

 

Looking back on the last year, where sustainability met innovation there was nothing less than a great confusion - a muddling and a melding together of many disparate currents. Cost reductions in solar power competed for headlines with unconstrained fracking; better school nutrition requirements competed with the defeat of GMO (genetically modified organism) food labeling; pioneering state and federal policies on carbon emissions and energy efficiency competed with a historic "do-nothing" congress.

I see more of the same in 2013. My prognostications for life in this great confusion don't include any new technologies, sudden calamities, or bold policies. More of the same, maybe, but even more so. Take heart, great leaps forward don't happen until after these confusions, when the dust settles and we start adjusting to our new realities, so there will be plenty of action.

1. Transparency will continue its dance of the seven veils.

If CEOs thought 2012 was a bad year for keeping secrets, just wait. Viral videos of the inhumane treatment of slaughterhouse cows and Romney's ill-timed "47 percent" are the tip of an iceberg of conversations, chemical formulas, and standard operating procedures that may have seemed normal (or at least "trade secret") will suddenly become liabilities. What's on my wish list? The ingredients of fracking fluids, the use of pharmaceuticals in livestock, and corporate political contributions. Expect more veils to fall in 2013.

2. The corporatization of clean tech

The initial sound and fury of clean tech entrepreneurs and breakthrough technologies will continue its ride into the sunset. In their place are coming the large corporations - GE, IBM, Siemens, Honeywell, Johnson Controls, Toyota - who have acquired, copied, or simply dusted off the clean technologies with the best opportunity for broad market adoption. This is not bad. The biggest obstacle to clean energy right now is supportive policy, something that only large corporations and their lobbying prowess can accomplish effectively. Expect to see more innovative policies come from the backroom lobbying of BigCo's in 2013.

3. The schizophrenia of natural gas will increase

Driven by increased transparency (see #1), greater awareness of the environmental impacts of hydraulic fracturing will increase pressures to regulate and limit its rapid spread. At the same time, the threat of future regulation will speed its current adoption. And as more infrastructure comes online to exploit the new abundance of natural gas, our dependence will grow on this fuel and the fracking that makes it cheap. In other words, nothing may be able to slow down this juggernaut, but tensions around it will surely rise.

4. The end of disruption in Electric Vehicles

Dreams of disruption in the auto industry will come to an end, leaving us with the sobering reality that hard policy work and incremental advances are our only options available. While Tesla's new sedan wins awards, the adoption of EVs remains at roughly 1 percent of new cars sold. Meanwhile, this administration's raising of the fuel efficiency standards coupled with a host of incremental technical improvements to the internal combustion engine will be our best hope of reducing emissions. This is okay. Historically, such improvements often generate immediate and significant gains, buying the time needed to build an EV infrastructure.

5. Adaptation (and suffering) will pass mitigation as the driver.

There are three options for dealing with climate change: mitigation, adaptation, and suffering. After 30 years spent flogging industry, policy makers, and consumers alike with the need for mitigation, we seem to have rounded into a new landscape of extreme weather and its four horsemen: conquest, strife, famine, and death. That changes the game. Adapting to this new reality, more than mitigating against prophecies, will drive demand for sustaining innovations in entirely new directions.

6. Local starts to look better

The economic benefits of a globalized supply chain has run smack into the costs of managing a far-flung enterprise subject to flooding, fire, lead paint, toxic effluent, labor abuses, political strife, water scarcity, public relations fiascos, and the rising costs of transportation. Companies from GE to Apple to Wal-mart are recognizing the benefits of local (in this case, domestic) manufacturing. Shorter lead times, less inventory in shipping, fresher produce, and closer connections between engineering and manufacturing are just some of the perks that companies will "rediscover" in the coming year. Make way for small, local, sophisticated, and connected manufacturing - and the benefits it brings to communities.

7. Food gets personal again

On the supply side, industrial agriculture's intensive use of petroleum, pesticides, and water, creates its own transparency problems while improved organic and sustainable practices make alternatives more affordable. On the demand side, consumers (and grocers and chefs) are increasingly asking what's in their food and where it came from, and will spend more to align their menus with their values. The missing link has been connecting sustainable supply with demand - the kind of logistical challenge that mobile, enterprise, and Internet technologies were built for. In other words, transparency will have a bright side as well.

 
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AndrewHargadonAndrew Hargadon is the Charles J. Soderquist Chair in Entrepreneurship and Professor of Technology Management at the Graduate School of Management at University of California, Davis. Hargadon's research focuses on the effective management of innovation, particularly sustainable innovation, and he is author of numerous articles, essays, and the book How Breakthroughs Happen: The Surprising Truth About How Companies Innovate (Harvard Business School Press).

Read more about Andrew Hargadon
 

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