How should industrial innovators approach the challenge of sustainable industrial production?

Industrial companies across all sectors are planning reductions of CO2 emissions and environmental pollution. Not by reducing their business, but by innovating to increase the sustainability of their activities. This approach, which goes beyond symbolic measures, is a response to societal, political, and regulatory pressures.

Eliminating industrial activity would the simplest way to satisfy these pressures, and this is what would happen in a world without open economies and technological innovation. But we live in open economic systems, and this openness makes it possible to relocate industrial activities to less regulated areas, at least temporarily. A questionable, but an understandable choice. On the contrary, technological innovation aims to reconcile industrial production with sustainability. A riskier, but more noble approach.

Assuming they adopt this innovation-based approach, how should industrial innovators approach the challenge of sustainable industrial production? At Presans, our conviction1 is that we must begin by clearly specifying the nature of the challenge of sustainability. It is in this spirit that we are going to show in the following why sustainability poses a challenge of systemic complexity to industrial innovators to which they must respond through entrepreneurship and technology.

 

The environmental sustainability of industrial production represents a challenge of systemic complexity

There are four aspects to environmental sustainability:

  • Conservation and regeneration of natural resources2
  • Reduction of pollution
  • Reduction of CO2 and greenhouse gas emissions
  • Protection of biodiversity

Reducing pollution and CO2 emissions can also have a beneficial effect in terms of resource conservation and biodiversity protection. Generally speaking, environmental sustainability is the result of the interactions between many factors within a complex system.

Sustainability issues can quickly become perplexing and generate confusion:

  • Part of the population of developed countries is convinced that de-growing our system is necessary to slow down global warming3;
  • Another part of this population considers, from a largely apocalyptic perspective, that salvation, or at least salvation for a chosen group, lies in the technological acceleration towards transhumanity and the abolition of economic scarcity.
  • According to the opinion of a third group, the environmental sustainability objectives of our system must integrate considerations of redistributive social justice. This position is in intellectual continuity with several more or less radical criticisms that have accompanied the evolution of the capitalist system since the nineteenth century.

These different perspectives can be combined in various ways. One can, for example, conceive of Singularity for some, and systemic collapse for others. But even among those who believe that the real issue is first and foremost to reconcile industrial production and sustainability, some issues may provoke disagreement:

  • Can traditional methods, especially in agriculture, compete with or even surpass the productivity of industrial methods and technologies4?
  • What should be included among green technologies? Is nuclear power a green technology?

Every industrial innovator fundamentally aims to move now from a highly productive but unsustainable system to one that is both highly productive and highly sustainable. In the terms of the table below: to go from the bottom line to the top line, but staying in the left-hand column. And without waiting for the occurrence of the Technological Singularity to rid us of all our systemic worries.

High productivity

Low productivity

High sustainability

 
  • Industrial production with green technologies;
  • Traditional production with high productivity.

Controlled degrowth of the economic system.

 

Low sustainability

 
  • Industrial production with unsustainable technologies (fossil fuels, nitrogen fertilizers, cement, petroleum-derived plastics).

The uncontrolled collapse of the economic system.

Building a sustainable industrial production system requires an individual or collective entrepreneurial approach

Closing or relocating plants is one way to minimize the cost of sustainability. With this type of approach, a firm’s dominant position can at best make it possible to absorb the cost of sustainability. To be able to respond differently to the sustainability challenge, it is necessary to turn sustainability into a business: to really make money with green technologies. This requires disruptive innovations and therefore an entrepreneurial approach. Easier said than done.

For many players in industrial innovation, this observation leads to considering two possibilities: going it alone, or becoming part of a group. A complex entrepreneurial choice. Companies that go it alone are rather rare nowadays. Tesla comes to mind, with its high degree of vertical and horizontal integration (synergies with SpaceX in particular). In a world of expanding industrial synergies, the question everyone is asking is how to do breakthrough innovation like Elon Musk when no Elon Musk is available.

Within a group of industrial innovators, particular attention must be paid to having an efficient coordination interface capable of managing conflicts and advancing the common interest. But in any case, it is a matter of moving from the bottom line to the top line of the following table:

Low competitive position

 

Strong competitive position

Sustainability is a business

 

Develop by regrouping

 

Prosperity

 

Sustainability is a burden on activity

 

Reduce activity

Maintain activity

 

The challenge of industrial sustainability involves complex technological choices

Technological breakthroughs in sustainability are based on complex technological choices:

  • Should an alternative technology or a technological substitute be developed or adopted? Should a circular system be set up?
  • What are the intensity of the impact and the industrial maturity of a technology? What is the overall sustainability balance of a technology within a sector?

Applying these criteria synoptically to a given sector is a complex task because the technological landscape is in rapid evolution. In this sense, sustainability issues contribute strongly to placing scientific and technical expertise at the center of innovation5. Today’s technological choices determine the sustainability of tomorrow’s industrial system.

 

From technology to entrepreneurial synergy, and from entrepreneurial synergy to sustainable industrial activity

Presans’ conviction is that building a sustainable industrial system requires the rigorous identification of the best technologies and the setting up of the right industrial groupings to develop these innovative technologies. Entrepreneurship and breakthrough technologies are two essential weapons to successfully meet the challenge of sustainable industrial production.

Notes

  1. Based on the analysis of about ten projects in 2020 coordinated by Presans and involving 6 major industrial groups.
  2. At the outset, sustainability is a requirement inherent to any regenerative resource exploitation activity. The formalization of sustainable management starts historically in the field of silviculture.
  3. This is Jean-Marc Jancovici’s position, who considers that high productivity of the system is not plausible without an abundance of dense energy vectors.
  4. Cf. Sustainability Out of the Past: How Archaeology Can Save the Planet, E. Guttmann-Bond, World Archaeology 42: 355-366 (2010).
  5. Cf. The Expert is once again at the heart of industrial innovation, J. Knight, open-organization.com (2020), and the Presans white paper Experts Create Problems.

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