The sustainable innovation paradox

The technological advance in business and society is at a growing speed. Some say the technological advance is at an exponential growth speed based on Moore’s Law which refers to the doubling of computer processing speed every 18 months. When we think of the possibilities that can happen when 3D printing, robots, nanotechnology and artificial intelligence are really taking off, many things will fundamentally change. This is in particular good news for those working on more sustainable innovations and solutions and for society where we can also expect more positive impact at a greater speed.

Also from a government side we see more policy efforts to stimulate sustainable technologies. However on the other side new technologies are hindered by regulatory policies designed to protect public safety. Which actually means that older and less sustainable technologies are favoured. Hall et al. (2018) call this the paradox of sustainable innovation.

The good thing about the growing technological progress for a more sustainable society is that there will be better solutions for every circumstance and for every business niche. However when technological progress is growing at an exponential speed, complex and stringent regulatory approval may hinder the fast development of applications that could provide benefits for our society and our planet. Especially for niche markets were there are limited financial means, the regulatory costs can be significant. So where technology is driving costs down (Moore effect), regulatory and other commercial costs are growing. Hall et al. (2018) introduce the term “Eroom”-effect (Moore’s law backward) where improved price performance due to technological advances are outweighed by increasing costs of regulatory approval and other commercialization costs.

Does this mean that sustainable innovations can only advance as fast as the regulatory system and financial means allows it? Probably not I would say. In my experience the succes and the speed of sustainable innovations are dependent on the capabilities to manage all stakeholders (clients, personel, suppliers, competitors, regulators etc.) and all aspects of a product/service. Managing means: to keep all stakeholders at the same speed. And last, but not least, to keep innovation itself at the right speed. While if technology is advancing at an exponential speed, the sustainable innovation you are working on today could be outdated when it comes to market.

Norbert Bol

Literature

Hall, J., Matos, S., Gold, S., & Severino, L. S. (2018). The paradox of sustainable innovation: The ‘Eroom’effect (Moore’s law backwards)Journal of Cleaner ProductionPages 3487-3497.

Photo by Daniel Ari Friedman on Foter.com / CC BY-NC

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