Michael Lenox and Stuart MacDonald discuss the diffusion of innovations and how those trends could impact sustainable innovation initiatives.
Stuart MacDonald (00:10):
What are the headwinds around creating the disruptive innovation necessary to tackle climate change?
Michael Lenox (00:19):
There’s a couple of ways to think about this. One is just what drives disruptive innovation more generally. Anecdotally, you hear a lot of rhetoric (especially in the business community) that innovation and disruption are happening faster now than they had been in the past. There is some interesting empirical evidence that new technologies are diffusing quicker. If you think about like how long it took for the color television to penetrate the global market, versus how long it took flatscreen TVs to penetrate the market, you see much shorter timeframes. There are some worries that innovation gets harder as we explore the broader possibilities for innovation. The pharmaceutical industry is one where the rate of new drug discovery has slowed down. Part of the belief is that as we discover new drugs, there’s not that many more new ones that can be out there. These are some headwinds when we think about innovation, when we think about innovation for sustainability, for, for sustainable technologies and innovation there, it’s interesting to think about the breadth of potential innovations that are out there and the subset of those that hopefully help us to start to address some of these sustainability challenges. When I’ve talked to groups, I like to say when it comes to the energy sector, what has been the greatest innovation over the last 15 years or so has the biggest impact on the energy sector? The answer that I give is fracking. If you look at what fracking has done to the U S energy market, the global energy market, that was an innovation that had been out there for decades, but really didn’t take off until more recent times and had a huge impact on the industry and pricing and the relative advantage of renewables and other technologies. How do we direct innovation towards sustainable technologies versus more broadly? That to me is the key policy challenge. We want to increase both the rate and the direction of innovative activity towards the sustainable solutions. That’s a challenging one from policy. If you narrow (I like to think of it as guard rails) the guard rails of innovation, you’re going to prevent a lot of interesting exploration. But if you allow it too broadly, suddenly you’re perhaps innovating in ways that are less sustainable, not more sustainable.
Lenox is the Tayloe Murphy Professor of Business Administration, Senior Associate Dean, and Chief Strategy Officer at the University of Virginia Darden School of Business.
MacDonald is the Vice President of Product Development at Minneapolis-based 2DegreesCooler™.