Materials’ scarcity and rising costs are fuel for a VERGE future

Materials' scarcity and rising costs are fuel for a VERGE future

The convergence of new technologies in information management, energy, transportation and building is underpinning an unprecedented wave of change in businesses and society, according to speakers at today’s VERGE conference in London, organized by GreenBiz.com.

“On the scale of human history, we are moving fast,” said Bernie Bulkin, a partner and senior advisor at venture capital firm VantagePoint Capital Partners. “It will seem fast when we look back on it in five to 10 years.”

Bulkin used the example of smart energy meters to underscore this point. “The big debate is not if we deploy them, but how smart should they be, how quickly should we install them, and how good can we make them today?”

The rapid adoption of new and more sustainable technologies is being driven not by the emergence of novel capabilities, but by pressing business needs. Neil Harris, green technology and innovation manager at technology giant Cisco, said. “We are seeing big shifts in the market, with some big brands now letting sustainability into their DNA. Has it come from legislation? No. Access to materials is catapulting the issue into the boardroom.”

In his opening keynote, conference chairman and GreenBiz executive editor Joel Makower highlighted the broad range of industries now feeling the impact of rising commodity prices and energy costs. Displaying a slide featuring around 30 different blue-chip brands, including Procter Gamble, Michelin, Unilever, Bayer, BASF, Lafarge, Dow Chemical and Bosch, Makower noted that each had been forced to restate its earnings within the last two months alone, due to rising commodity prices. “We are just beginning to see the impact of commodity costs on businesses,” he said.

Cisco’s Harris added that increasing numbers of businesses are employing technology to better measure their activities. “They are connecting energy-using devices into their data networks to try to report, control, manage and reduce their consumption,” he said. He argued that the increasing number of firms now employing executives with a dedicated mandate for sustainability or energy, often enjoying strong support at board level, is creating a powerful impetus for change.

Needs among commodity consumers are being balanced by increasingly smart supply chains and more intelligent energy distribution. Bulkin noted the transformational power of improved infrastructure, giving the example of London’s underground rail network. First established more than a century ago, the Tube now provides the backbone of a public transport network used by 93 percent of London’s commuters. Today, an equivalent platform is emerging in energy distribution in the form of a smart grid that is fault-tolerant, robust across a wide range of demand and has in-built intelligence.

Obstacles to Adoption

Judith Pollock, deputy director for the U.K. at philanthropic organisation the Shell Foundation, added a note of caution to the debate, arguing that while enabling technologies are being adopted at a rapid rate, there are few guarantees about which will genuinely support a more sustainable future.

“There is a place for technology, but the bigger thing is to deploy the right technology,” she said. “In the developing world the challenge is huge, because the supporting networks — for example access to finance — aren’t necessarily there.”

Pollock added that decarbonization is a much lower priority to most developing economies than basic issues like transport that might give access to jobs without creating gridlock.

“We must really understand the need and bring the right technology to bear, not just the smartest technology, and find partners and ways to address gaps,” she said, adding that the Shell Foundation has learned to take a business approach to the problem, in particular a more rigorous approach to planning. “Failure in the developing world is often due to the inability of the public sector to plan and implement,” she said.

Even in the Western world, risks are being compounded by a lack of realism, cautioned Bulkin. “Technology innovation is usually capital-intensive,” he said. “People focus too much on small companies raising capital, but to go from lab to commercial production requires a quantity and quality of engineers that rarely exists in small companies. They can conceive things and bring them to a pilot stage, but it’s only the big companies that can transform entrepreneurial ideas into commercial reality. Good ideas die not for lack of capital or commercial opportunity but for lack of engineering.”

Bulkin cited the example of tidal and wave energy generation: “In the U.K. alone we have 40 entrepreneurial companies working on it, but this is big engineering. The ones emerging from the pack are the ones partnering with big companies. They will be the ones to go ahead — all the rest will fall away.”

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