The future of innovation - etsEQ

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6 that try to infl uence policy do so from experience – a seat at the table does not come for free. Gamlen explained that the EIRMA group used input from the International Energy Authority and the Pew Center to explore three future scenarios, and their impacts on business R&D. In the story of ‘Economic Man’, where developments are driven by business, market and economic considerations, energy costs will continue to increase, companies will buy options in green technology, and with little government support or guidance there will be a lot of market uncertainty. In this scenario, the CTO’s informed leadership on strategic decisions becomes even more crucial for business success. R&D organisations need to be fl exible to adapt to an uncertain marketplace, and will get little help from industry clusters and alliances, which will be few and far between and generally formed to improve profi ts. It will also remain diffi cult to attract and retain the right talent. In the second scenario, of ‘Political Man’, the issue will be whether political pressure comes from local or global sources. Local pressure can create quick local actions; global pressure is slow and hard to achieve. The driving infl uence will be self-interest. The advantages of local skills, talent and resources in business R&D will be severely tested. It’s likely that governments will provide more money for R&D, but will expect more of companies, perhaps constraining innovation or forcing collaborations. In the extreme, governments may simply reassign commercial resources to tackle climate change. Industrial R&D will be reshaped by internal and external forces. In the third scenario, of ‘Global Mankind’, social pressure for immediate action will demand a global, rather than local, response. There’s a danger of unstructured responses on many fronts, which governments and companies are slow to shape. In this scenario, wealth generation is no longer the prime motivation for companies. Business R&D will be seen as a vital part of the solution, but the capacity to apply technology Economic Man Political Man
will depend on communicating well with the public. Industry will also come under pressure to help direct public funds and priorities towards feasible solutions. The three scenarios suggest that business R&D organisations will need to have a very clear message about how they can help with climate change, and will need to communicate it very clearly. They’ll need to fi nd the right partners for this new world, seeking them out for the value they bring both individually and in clusters. This world will also demand new skills and there’s a question as to whether the education system will be able to provide them. The treatment of IP may have to change: will patents still be relevant in such a complex system of cross-licensing and alliances, formed in a hurry? Finally, if climate change becomes globally recognised as an immediate threat, business R&D organisations will need to learn to work well with many local groups and governments, as well as international and global efforts. Gamlen concluded that the development of responses to climate change is accelerating. Industrial R&D will be a key player in mitigating or solving the issue, but it is likely to take new organisational and business models to meet the challenge. IBM is already taking advantage of the business opportunities through its ‘Big Green’ innovations, such as using information technology (IT) to ensure the best use of power and water in enterprises, industries, and countries, drawing on its computational, science and technology resources. Kaiserswerth said: “Having IT widely distributed in the power grid and at the users’ premises makes it easier to analyse and optimise their energy use. It’s possibly the next phase of the industrial revolution.” Learning from the developing world At the other end of the development scale, the increasingly global nature of innovation is leading to breakthroughs in emerging economies that challenge ideas from the developed world. When IBM brought more than 150 000 people together through web-based tools to come up with new business ideas, one of the best was to develop branchless banking to serve those in developing countries who are currently without bank accounts. Kaiserswerth explained that opening an account at a Western bank costs around $60 to $70, which is too much for microcredit customers in developing markets. “Why does branchless banking makes sense for IBM? It’s a question of corporate citizenship and also driving innovation: doing this means doing things in a different way,” he said. “A lot of the innovation being done in developing countries will spill back to us. The challenging thing is to do this with fewer resources. And it can be profi table.” According to data from the Microcredit Summit Campaign report of 2005, there could be 475 million potential customers for micro-credit by 2010. Other developing world innovators challenging the developed world status quo include Bharti Airtel India, which is offering mobile phone calls at two cents The future of innovation Global Mankind “A lot of the innovation being done in developing countries will spill back to us.” Matthias Kaiserswerth, IBM 7
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