1new sustainable innovation

(c) Martin Charter (2004)

BCSD - TAIWAN30th September 2004

Taipei, Taiwan

Professor Martin Charter Director

The Centre for Sustainable Design

Martin Charter & Associates

Sustainable Innovation


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


Terminology


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


• Product/services/technologies• Process• Organisational


Types


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




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




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




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




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




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



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



Product-Service-Systems (PSS)



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


http://www.suspronet.org


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



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



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



• Product/services/technologies• Process• Organisational


Types


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



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]

mailto:[email protected]

http://www.cfsd.org.uk

mailto:[email protected]

1new sustainable innovation

Business

martin charter

productservicestechnologies

philips approach

martin charter

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sustainable

design programmes

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