SUSTAINABILITY AND INNOVATION
Innovating in Uncertain
Markets: 10 Lessons for
History shows that the road to technological innovation is long
and winding, but lessons from successes and failures with other
emerging technologies offer managers a helpful guide.
BY GEORGE S. DAY AND PAUL J.H. SCHOEMAKER
TALKING ABOUT “GREEN TECHNOLOGY” gets people excited. It’s thrilling to think
that a new wave of inventions and discoveries will revolutionize the way we live, halt the degradation of our planet and conserve resources for future generations. And it’s more than just talk:
Investors are committing real dollars. By one estimate, the global market for alternative energy
sources (for example, wind, solar energy and biofuels) will reach $315 billion by 2018. In the past
few years, the number of “significant investments” has grown by more than 30%. 1
As the level of activity increases, however, discussions about green technology raise as many questions as they answer. Let’s say we start plugging our cars into a smart electric grid: Who will make the
batteries, using which technologies, and what energy sources will we use to charge them? Similar
debates arise over biofuels. Should we produce biofuels from algae? Will it become a more promising
feedstock than corn or sugar cane? Can we produce a type of cement that releases considerably less
carbon dioxide into the air — or should we begin developing alternative materials to replace it? Will
energy management software spur U.S. households to regulate their peak load use — or is it simply
too difficult to change people’s behavior?
Addressing these questions is complicated by the fundamental uncertainties that are at the heart of
the green technology market. The evolution of this market space depends on forces that are beyond
green technologies learn
in other technologies?
; Take the time to
study the market
don’t expect growth
to be predictable or
; Craft a flexible strategy that will help
; Build an organization that can
as well as opportunities, and adapt
Innovations often follow the path of LED technology: beginning at the periphery before becoming more widely adopted.
SUMMER 2011 MIT SLOAN MANAGEMENT REVIEW 37