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Green innovation: cleaning up industry or cleaner industry?

28/07/2011

  • Europe
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Sustainability and green growth were major issues at the 2010 European Business Summit (EBS), the leading forum for business leaders and decision makers in Brussels on 30 June and 1 July.

Sustainability is becoming a buzzword globally, and with good reason: “In the 20th century we enjoyed phenomenal resource-intensive growth,” said Environment Commissioner Janez Poto─Źnik. “In what has been called the ‘great acceleration’, we experienced a four-fold growth in population accompanied by a 40-fold growth in economic output. But in the same period we also increased our use of fossil fuels 16 times, our fishing catches 35 times, our water use nice times and our carbon emissions 17 times”.

It is therefore not surprising that sustainability is one of the cornerstones of the European Commission’s 2020 Agenda and that, in the USA, President Obama’s administration has earmarked $100 billion for research into greener industry.

However, one of the issues raised at the EBS, is that research alone is not enough. Sustainable solutions must be turned into commercially viable products if Europe is to recover from the economic downturn. In one session, Phillip Vandervoort of Microsoft noted that he had seen a shortage of people with the ability to transform ideas into products.

Two types of challenge

The thought leaders and business decision-makers at the EBS identified a number of key challenges to the EU in the area of sustainability, which broadly fall into two categories:

  • Greener business: how can companies reduce their own environmental footprint? What new processes will make business more energy and resource efficient?; and
  • Green technology: what innovative new products and technologies can be developed that, by their nature, put less strain on the environment.

It is this second category which holds out the hope of meeting society’s needs long into the future and, according to the WWF, will become one of the world’s main industries by 2020 1 .

Recent studies show that, while Europe is a world leader in energy efficiency, it is less successful in developing breakthrough technologies. Therefore many EBS panellists agreed that there must be an increased emphasis on eco-innovation. An INSEAD study on greening the economy in 2008 revealed that the EU lags some way behind North America in terms of venture capital investment in clean technologies.

New eco-innovation focus

Steps are being taken to address this issue. The EU Environmental Technologies Action Plan (ETAP), which was launched in 2004 aims to stimulate eco-innovation and the take-up of environmental technologies on a broad scale to protect better the environment and contribute to competitiveness and growth as well as addressing the key societal challenges of the 21st century. A reinforced action plan is being developed to address these evolving challenges.

“We must consider what our resources are,” explained European Environment Commissioner Janez Poto─Źnik. “Energy is already established as the primary resource in most people’s minds, but resource efficiency is not only about energy efficiency. We must also consider all our material such as metals, minerals and food, and the natural systems which provide clean water and air.”

Finding funding

But innovation is expensive and many of those at EBS discussed the need for better communication between researchers and business. Small and medium-sized enterprises (SMEs) in particular need more information on what funding is available to them in the early research stages as well as a more in-depth understanding of the EU patent system and how it is applied across the EU Member States.

In the next phase of innovation – product development – a lack of available venture capital of sufficient scale was identified as a major problem in the EU. The USA appears to lead strongly in this area. Other challenges faced by would-be entrepreneurs in Europe include compliance and marketing. The latter often requires a budget to educate the public on how a product works, what it is for and its benefits. Business leaders at EBS agreed that consumers do want greener products, but not at the expense of functionality.

The right people for the job?

One discussion panel identified particular problems in recruiting staff with sufficient skills in areas related to sustainability. Astrid De Lathauwer of Belgian telecommunications’ operator Belgacom said that recruiting technical staff was a major issue and called for greater communication between government and industry to resolve the problem. Meanwhile Phillip Vandervoort of Microsoft said that industry needs people with the ability to transform ideas into products.

Panellists also highlighted concerns about the demographic situation. In order for businesses to be successful and sustainable into the future, companies need to ensure that their workforces will be able to meet future demands and to adapt to new ways of working. There was a broad agreement that the desirability of social responsibility and stability are now at the core of the corporate objective. Vandervoort highlighted the high level of motivation among younger people, combined with their high level of technical competence, as a future asset for industry.

Looking to the future, the focus of European sustainability initiatives will have to be on research, innovation and education. Some of the important groundwork has already been done and plans such as ETAP are taking a lead, but there is no room for complacency and more business leaders must also get involved.

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