June 25, 2013
Green companies are thriving when the economy is in recession. This is the proposition of Professor Mika Westerlund of Carleton University’s Technology Innovation Management program.
To get to a sustainable business one needs to combine social and environmental entrepreneurship with personal passion, while not neglecting the profits. A triple bottom line equals a sustainable business!
Sustainability brands are easy to build but also are easy to hurt if one is not serious about being green. It starts with mindset – after that you will see opportunities and openings in the market.
Data centres are a good example of sustainability producing measurable benefits by reducing power consumption. Same goes for Virgin Atlantic fuel efficiency, coca cola water saving and UPS reduction of left turns.
These are a great example of incremental sustainability, where the business model is not affected. However, as Piet Aarts said, technology innovation should be complemented with commercial innovation.
What will be an innovation game changer in green space? If its incremental and efficiency improving it is easy to copy. However, new companies have a significant advantage starting green.
To enable green value creation one needs to enable culture change in the organization. New business models are needed to enable systemic green change. Startups have the advantage, because they can create their own culture.
There are many challenges growing a sustainable eco-friendly company, like premium price green products, only wealthy can afford, or perceived lack of urgency. Again, culture change is easier for startups rather than large dinosaur companies.
When it comes to intellectual property, a carpet company named Interface gave their trade secrets away, yet they still had the edge. IP protection is not widely used in green innovation. The best IP protection is the slow rate at which the corporate culture changes, since large firms need more time to adapt to changes in strategy.
How can you be open transparent and green and still be profitable? According to Professor Westerlund, the focus should be on open innovation model with minimum IP protection! If licensing is used then it should be flexible and affordable.
There is increasingly stronger focus on sustainability in business models and business ecosystems, as well as open innovation. This is changing the nature of both innovation and business as we know it, creating the brand new economic and social models for the 21st century.