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Back in the late 1980s and early 1990s, one thing Ron Pernick learned
while working with large Japanese corporations such as Sharp and
Osaka Gas & Electric was the art of long-term thinking.
Some people call this “thinking like a mountain,” and
Pernick believes it should be a key tenet for companies, governments,
investors and others striving for clean tech success. The idea is
that significant monumental shifts rarely happen in days or weeks,
but take years or decades to materialize. In this world-view, it
takes the perspective of a mountain—something that has been
around for millennia—to put human activity and natural systems
into perspective.
In the just-released book, The Clean Tech Revolution, coauthors
Clint Wilder and Ron Pernick reveal why clean tech markets are finally
hitting their stride, building momentum and—most importantly—going
mainstream.
“When industry giants such as GE, Toyota, and Sharp and investment
firms such as Goldman Sachs are making multi-billion dollar investments
in clean technology, the message is clear,” they wrote. “Developing
clean technologies is no longer a social issue championed by environmentalists;
it’s a money-making enterprise moving solidly into the business
mainstream.”
The authors show how clean tech is penetrating both Wall Street
and Main Street. They argue that clean technology is here to stay
and that it offers the greatest opportunity for wealth creation
in a generation.
The global energy industry provides a great example of the need
for long-term thinking. It took coal nearly 100 years to bypass
traditional energy sources, such as the burning of wood, to become
the world’s primary energy source. Another 100 years passed
before oil surpassed coal usage. Natural gas has been in development
for a century and now represents about 20 percent of the global
primary energy use. Similarly, it will take new renewable energy
sources, such as wind, solar, and biofuels at least 10, 20, or 30
years to catch up with coal, oil and natural gas. Based on that
reality of energy markets, it’s clear why long-term thinking
is so critical in the realm of clean tech.
There is a clear opportunity to take advantage of this revolution.
Clean tech is actually 30 to 50 years in the making; the first conversion
of sunlight to electricity in a solar PV cell took place at Bell
Labs in 1954, and the first large-scale wind farms started churning
out power three decades ago.
Unlike the Internet, which experienced a rapid boom-and-bust cycle,
the transition to new energy, transportation, advanced materials
and water technologies will take much longer to peak. There will
be occasional irrational exuberance and some highly-touted and promising
companies will fail. But with the right combination of policy, capital
and technology, the exploding global market for clean tech will
not abate anytime soon.
Clean Edge, a research and consulting firm that helps companies
and society understand and profit from clean technology, recently
conducted research on what efforts must be made to wean the U.S.
off Middle East oil. The company’s analysis estimates that
at least $15 billion per year must be spent on clean energy and
efficient technologies over a decade to accomplish the goal. This
kind of investment could lead to the replacement of 25 billion gallons
per year of gasoline by 2018—the equivalent of today’s
imports of Middle East oil.
Over the next 25 years, the world will need to produce 10 to 30
terawatts of new energy. Meeting their need will require the equivalent
of adding 100 new ExxonMobil-sized companies to the economy. Future
Carnegies, Rockefellers and Mellons will likely come from such clean
tech industries as wind power, solar photovoltaics, biofuels and
biopolymers, rather than the extractive, resource-depleting, polluting
industries of old.
Leading Japanese companies have understood and embraced the concept
of long-term thinking better than most of their global corporate
counterparts. Toyota and other Japanese firms have 10-, 50- and
even 100-year strategic business plans. These plans will allow Toyota
to plan decades ahead to become the world’s hybrid leader
and Sharp to focus for years on solar domination.
Other companies are starting to follow suit. In The Clean Tech Revolution,
Wilder and Pernick profiled multinationals including 3M, ADM, Applied
Materials, DuPont, FPL Energy, GE, Iberdrola and Wal-Mart—all
companies that are taking leadership positions in this technological
renaissance. They also looked at startups such as GridPoint, Imperium
Renewables, Sun Edison and Suzlon, which are all embracing new models
and creating vibrant businesses.
Business news headlines over the past couple of months provide a
further glimpse into this transition. Goldman Sachs announced the
sale of its Horizon Wind Energy development group to Portugal-based
EDP for more than $2 billion. Tyson Foods and Conoco Philips said
they plan to pair up to turn animal fats into biodiesel. SolarWorld
and Vestas, two global leaders in solar and wind respectively, announced
plans to develop multi-million dollar production facilities in the
U.S.
Governments and non-governmental organizations are playing a central
role as well. With cities, states and nations around the globe planning
to generate at least 20 to 30 percent of their total energy from
clean energy sources within the next few decades, and the need for
potable water and reliable electricity for billions of people in
the developing world, clean tech will be a dominant force well into
the 21st century.
Clean tech represents the biggest win-win opportunity of an era,
and long-term thinking will be a critical tool for those participating
in this massive industrial transformation. The future health of
our collective economies and environment depends upon it. |
