Griffith Hack Clean & Sustainable Technologies

Embracing Sustainability Bears Innovation & IP by Justin Blows

A recent Harvard Business Review article, Why sustainability is now the key driver of innovation, is resoundingly convincing: Businesses that embrace sustainability will innovate and flourish.

Traditional business leaders believe becoming environmentally friendly will erode competitiveness but the reality is just the opposite. Companies that embrace sustainability are inevitably taken down the road of innovation, and consequently develop intellectual property that provides invaluable brand and technological differentiation in the marketplace. And consumers love it.

Protecting sustainable innovation, with patents for example, crystallizes the first mover advantage providing significant commercial advantage.

The authors of the article looked at 30 large corporations, and concluded that sustainability is a mother lode of organizational and technological innovations. The article is full of amazing examples.

Hewlett-Packard, for example, realized in the 1990’s the lead in solder would be phased out because of environmental concerns. Rather then lobby for weakened regulations they embraced the inevitable and developed a lead free solder. It was able to meet EU directives on lead-free solder as soon as they were passed providing an advantage over competitors. Its just one example of why its smarter to comply with the most stringent rules before they are enforced. Companies that are in the vanguard of compliance naturally spot business opportunities first.

I think will are now seeing the same opportunities in renewable energy. Governments are starting to tighten the screws with renewable energy targets, feed in tariffs and by pricing carbon, and those that embrace sustainability and innovate will be the winners.

Old & returned equipment used to cost CISCO eight million dollars a year in recycling costs. It realized that most of it still worked and started incorporating working used parts into new units. Reuse is now around 45% and recycling costs have fallen by 40%.

Reuse is going to become more important as we inevitably expend our non renewable resources. But acting now before the crunch is highly advantageous and stimulates innovation creating valuable IP.

FedEx & Kinko’s printing realized that they could significantly reduce greenhouse gas emissions, fuel and logistic costs. Instead of shipping paper document around the US, they offered costumers the option of sending the document electronically to a printer near the final destination for printing. A paper copy then need only be shipped locally. That’s innovation. Save money, save the planet, and win customers.

One notable technology that the article didn’t discuss was hybrid cars. In particular, Toyota stands out from the competition, and I would say they dominate the hybrid car intellectual property landscape. This is an auto company that acted on sustainability concerns and innovated well before governments started acting.

While US giants like General Motors are on their knees, brought their by their gas guzzling dinosaurs, Toyota has been innovating in a technology that addresses concerns about suitability and has crystallised its first mover advantage by patenting hybrid car innovation. Toyota has more patents in hybrid car technology than any one else. It does not appear that the other companies will be able to catch up, at least in the medium term.

Now that governments are turning the screws to increase the fuel efficiency of the car fleet to improve energy security and reducing greenhouse gas emissions, Toyota will reap what it has sown. United States President Obama wants national fuel efficiency to increase by 5% each year from 2012 to 2016. The United Kingdom government has confirmed it will offer from ₤2,000 to ₤5,000 to purchasers of electric and hybrid cars . The Japanese government introduced inducements worth around US$4,000 per purchased car, propelling the Toyota Prius to become the most sold car of any kind in April this year.

As the realities of climate change, resource scarcity, and the costs of pollution bite, traditional business models are collapsing. Those that embrace sustainability will innovate, protect their new IP, and flourish.

Justin Blows


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