1new Sustainable Innovation
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Transcript of 1new Sustainable Innovation
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(c) Martin Charter (2004)
BCSD - TAIWAN30th September 2004
Taipei, Taiwan
Professor Martin Charter Director
The Centre for Sustainable Design
Martin Charter & Associates
Sustainable Innovation
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(c) Martin Charter (2004)
No common understanding - Products (Eco-innovation – Fussler et al)- Technologies- contaminated land remediation- air pollution- monitoring and control- waste management- recycling- noise and vibration- energy management- consultancy
Sustainable Innovation
Terminology
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(c) Martin Charter (2004)
Type 1:Productimprovement
Type 2:Productredesign
Type 3:Functioninnovation
Type 4:Systeminnovation
Time (years)
Eco-
effic
ienc
y im
prov
emen
t/or
gani
satio
nal c
ompl
exity
Eco-efficiency curves
5 10 20
20 Sustainable level
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(c) Martin Charter (2004)
• Product/services/technologies• Process• Organisational
Sustainable Innovation
Types
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(c) Martin Charter (2004)
Barriers to sustainable innovation
Background• Weak understanding and knowledge over how to integrate
sustainability into innovation policies • Lack of clear drivers for sustainable innovation• A focus on eco-efficiency and dematerialisation will not
deliver sustainable innovation• To move towards higher levels of sustainable innovation (systems)
will require long-term, strategic change in societies• Existing focus on incremental improvements or (eco)re-design,
rather than functional or system innovation• Limited uptake of sustainable product/eco-design outside
of transnationals• Value and supply networks are increasingly geographically
disparate
Sustainable Innovation
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(c) Martin Charter (2004)
Barriers to sustainable innovation
Markets• Green often seems to suffer from a poor perception • Most markets are still dominated by price• Green markets are still niche markets• Lack of green mass markets • Awareness:action gap • There is a wide variation of awareness of sustainability/
environmental issues • B2C customers tend to be wedded to ownership • Developing countries lack good quality information• 3 billion people live on less than $2 per day
Sustainable Innovation
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(c) Martin Charter (2004)
Barriers to sustainable innovation
Organisational• There is a lack of senior level vision and commitment to sustainability • Nervousness over taking a pioneering or leadership role on
sustainable innovation• Sustainability is not seen as area of business opportunity• Green is generally seen as a threat-based, compliance agenda• Sustainability issues are rarely included in the corporate strategy,
business development and/or the ‘opportunity search’ process • There is a lack of awareness of sustainability/environmental
awareness amongst key business functions • Organisational systems and procedures are often inflexible • Product designers and design consultancies still have a poor
understanding of sustainability
Sustainable Innovation
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(c) Martin Charter (2004)
Barriers to sustainable innovation
Entrepreneurship and funding 1• Poor linkages between experts, investors, entrepreneurs and
inventors • Lack of sustainable innovation catalysts • Academia has not been successful at transferring radical
concepts (e.g. functional, systems) of sustainable innovation• Need for bridges between inventors, investors, entrepreneurs and
academia • Little recognition of sustainable innovation opportunities amongst• successful entrepreneurs
Sustainable Innovation
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(c) Martin Charter (2004)
Barriers to sustainable innovation
Entrepreneurship and funding 2• Sustainable technologies/product/services are not viewed as
major opportunities by investors:- business concepts/technologies often seen as too risky- financial returns often not seen as significant enough to justify
investment- not enough successful entrepreneurs with track-records in the
area• Inventors/entrepreneurs: lack of start-up funding and business
skills
Sustainable Innovation
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(c) Martin Charter (2004)
Barriers to sustainable innovation
Marketing• Weak interaction between marketing and sustainability/
environmental professionals • Marketing's role in the product development/innovation process
differs from company to company• Sustainability/environmental are rarely involved in the innovation
process.• Green product failures due to a lack of involvement of marketing
skills and tools• Green is integral to the brand/product/company • Responsible products/brands from responsible companies
Sustainable Innovation
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(c) Martin Charter (2004)
Opportunities for sustainable innovation 1• ‘Producer responsibility' laws in Europe and Japan may stimulate
series of new (sustainable) business concepts • Emerging opportunities for sustainable/greener technologies/
products/services in B2G markets e.g. Japan• A smarter use of demand and supply-side government policy tools
may start to create opportunities (e.g. Integrated Product Policy (IPP))• Various companies exploring new business models in attempt to open
up the market of the 3 billion people who live on less than $2 per day
Sustainable Innovation
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(c) Martin Charter (2004)
Product-Service-Systems (PSS)
Sustainable Innovation
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(c) Martin Charter (2004)
PSS: strategiesProduct - oriented services• Service integration e.g. additional functionality• Product extension e.g. upgrades and repairs
Use - oriented service (selling function)e.g. leasing or rental of computer and office equipment
Result - oriented service• Product-substituting service e.g. virtual answering machine• Vertical integration e.g. downloadable music
Source: www.suspronet.org
Sustainable Innovation
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(c) Martin Charter (2004)
Opportunities for sustainable innovation 2 Product Service Systems (PSS) are a promising new businessdevelopment approach that may help create more sustainable solutions. However, - Business do not recognise the terminology of PSS- PSS are not developed in a systematic and structured manner - PSS often means a closer focus on:
- customer needs- maintaining good customer relations
- PSS will require a shift in corporate culture from ‘product-orientation’ to ‘service-orientation ‘
- Sustainable PSS solutions are likely to industry/need specific- Defining the sustainable/environmental performance is complex
due to lack of good quality lifecycle data and information- PSS does not always deliver sustainability benefits- There are a lack of successful sustainability-driven PSS cases
Sustainable Innovation
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(c) Martin Charter (2004)
Opportunities for sustainable innovation 3
Organisational: lessons from Philip’s approach to eco-design management 1• Focus on the eco-design management process• Product-level environmental considerations should be left to Business
Units (BUs) to determine • Clear demarcation of responsibilities of:
- Corporate - BUs
• Both Corporate + BUs need a shared vision of the proposed outputs of the process e.g. Green Flagship products
• Systematic and continuous integration of environmental considerations into the Product Creation Process (PCP)
• Sell the commercial benefits of eco-design in the language of different business functions
Sustainable Innovation
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(c) Martin Charter (2004)
Opportunities for sustainable innovation 4
Organisational: lessons from Philip’s approach to eco-design management 2• Mechanisms to share and communicate information/knowledge
throughout global value or supply chain or networks• More mature eco-design management systems are likely to produce
more eco-innovation
Organisational: lessons from SC Johnson’s approach to eco-design management• Innovation tends to be frequent e.g. month-to-month and incremental• Internal branding of sustainable product/eco-design programmes e.g.
Greenlist ™• Institutionalise sustainable product/eco-design programmes through
integration into existing processes
Sustainable Innovation
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(c) Martin Charter (2004)
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(c) Martin Charter (2004)
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(c) Martin Charter (2004)
• Product/services/technologies• Process• Organisational
Sustainable Innovation
Types
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(c) Martin Charter (2004)
Action plan• Senior level commitment• Director with responsibility• Project director• Taskforces: technology/product/service; process; management• Define ‘opportunity zones’• Complete research + pilots• Selection process• Launch sustainable innovation culture• Develop strategy, programmes, responsibilities• Implementation, monitoring and control
Sustainable Innovation
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(c) Martin Charter (2004)
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(c) Martin Charter (2004)
Contact DetailsProfessor Martin CharterDirector
The Centre for Sustainable DesignTel: 00 44 1252 892772Fax: 00 44 1252 892747email: [email protected]: www.cfsd.org.uk
Martin Charter & AssociatesTel: 00 44 1252 722162Fax: 00 44 1252 722162email: [email protected]