The lead markets are expected to be energy, mobility, water and efficiency; a tripling of sales is also expected in material efficiency. 56 Table 5.1 Summarized prioritization and urgency timeline for selected metals with their selected applications (driving emerging technologies) PRIORITARY AND URGENCY REGARDING TIMELINE SHORT-TERM (WITHIN NEXT 5 YEARS) + rapid demand growth + serious supply risks + moderate recycling restrictions MID-TERM (TILL 2020) + rapid demand growth and + serious recycling restrictions or + serious supply risks + moderate recycling restrictions LONG-TERM (TILL 2050) + moderate demand growth + moderate supply risks + moderate recycling restrictions Source: UNEP and Öko-Institute 2009; EC 2010c METAL APPLICATIONS AND DRIVING EMERGING TECHNOLOGIES (SELECTED) Tellurium Indium Gallium Rare earths Lithium Tantalum Palladium Platinum Ruthenium Germanium Cobalt Solar cells and flash memories Displays (LCD), thin layer photovoltaics ICT, Thin layer photovoltaics, LED Catalysts, magnets (magnetic refrigeration) Batteries, ceramics/glass, hybrid electric vehicles Micro capacitors, medical technology, airplane turbines Automotive catalysts, seawater desalination Fuel cells, automotive catalysts, LCD and fibre glass Electronics, hard disks, gas-to-liquid technologies (high quality fuels) Optics (fibre and infrared), PET, solar Lithium-ion batteries, synthetic fuels 5.2 | Business perspective: eco-innovation and international competitiveness Business is increasingly aware of the opportunities that come along with the eco-innovation agenda. Roland Berger Strategy Consultants (2009) expect 3.1 trillion in global sales generated by eco-industries by 2020, i.e. more than a doubling, and call eco-technologies the 21st century lead industry. While this is indeed good news for technology providers, eco-innovation clearly offers additional benefits for those improving their performance and developing system solutions over the long term. The lead markets expected are energy, mobility, water and efficiency; a tripling of sales is also expected in material efficiency (Roland Berger Strategy Consultants 2009). A trend, however, is fierce predatory competition as the first movers are accompanied by smart followers. Thus, success will depend critically on delivering real solutions for customers with verifiable sustainability achievements, as well as on suitable mass markets strategies to overcome current fragmentation and niche orientation. Such strategies seem to be supported by consumer orientation, i.e. price-conscious target groups nowadays consider ecological aspects of consumption when making product purchase decisions. Indeed, certainty about future market demand is a critical variable for any such trend, and willingness to pay for green products may not be as high as expected (see McKinsey 2008 in WBCSD 2010b and chapter 6 on drivers and barriers).
eco-innovation observatory The most frequently cited benefits that firms expect from eco-innovation relate to improved business outcomes: the ability to attract and retain customers (37%), improved shareholder value (34%) and increased profits (31%), according to a survey done by the Economist Intelligence Unit in 2008 (PWC 2008). Managing eco-innovation from a cost/profit perspective may be pursued via the following seven steps (Lettenmeier et al. 2009): ● Step 1: Form a team ● Step 2: Choose a product and determine the service it is providing ● Step 3: Identify the product chain ● Step 4: Assess the current status of the product ● Step 5: Estimate the MIPS (Material Intensity Per Service unit) of the product ● Step 6: Optimize the product and implement eco-innovation ● Step 7: (Re-)design the product service-oriented Redesigning products service-oriented clearly requires intense communication with customers from all relevant target countries internationally. It might overcome the uncertainty about future markets (see Chapter 6 on barriers according to Eurobarometer) and lead to new business models of user-led innovation and social entrepreneurship. Seen from a comprehensive perspective (Bleischwitz et al. 2009, Petrie 2007), new business models for base metal industries might emerge, which could position the industry at the heart of global material value chains. This is a horizontal task which clearly transcends vertical production patterns, for example, it cuts across the automotive chain. Within networks and partnerships of integrated material flows management, the base metal industry can demonstrate stewardship and leadership. The challenge will be to overcome the attitude of a primary production company delivering basic materials in favour of a fully integrated material flow company network, with high knowledge intensity, customer orientation, worldwide reverse logistics, high-level recycling and a long time horizon; such future companies will manage products, flows and stocks along certain materials or groups of materials. With strong locations in the South, those new material flow companies may also help to heal the current North–South divide of low value added in the South and high value added in the North. Eco-innovation, however, clearly goes beyond materials: in line with EIO’s visions, the economics of ecosystems and biodiversity report for business (TEEB 2010) features how ecosystem services, currently not accounted for, might be turned into business opportunities. As part of these efforts, markets for certified agricultural and forestry products are estimated to increase by a factor of ten to twenty by the year 2050, with further opportunities in areas such as water management and ecosystem service provision. Worth noting, the EIO’s visions of industrial symbiosis and carbon recycling are not yet conveyed in. Certainly, this needs more in-depths analysis about trade-offs and sustainable pathways. Encountered with these unleashed opportunities, business will need to take leadership, form partnerships and integrate business strategies with risk management and wider responsibility strategies. Mining companies, for instance, need to work out biodiversity strategies with long-term objectives while also providing transparency. Annual Report 2010 57