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GQ’s Luke Darby’s article, “Billionaires Are the Leading Cause of Climate Change” makes the compelling point that 100 corporations produce 70% of the global greenhouse gas or GHG emissions.
Upon reading that, the first thought that comes to my mind is that climate change should be easy to address, simply because only 100 boardrooms need be convinced to change their ways. Darby argues it won’t be so easy.
Next, I think that corporations have zero incentive to produce GHGs unless consumers are buying up products derived from or requiring emission of GHGs. GM presumably sells lots of Suburbans that gets only 15 miles per gallon in the city because people buy them. There is an easy way for us to stop GM from producing Suburbans—stop buying them.
And, let’s note, that a Suburban carrying eight people on a long road trip where the massive vehicle impressively logs 22 miles per gallon is arguably more efficient per passenger (about 176 miles per gallon per person) than my electric Nissan Leaf when I’m driving it alone (99 MPGe on average).
Still, the argument that powerful corporations could do more than they are to reduce GHG emissions is almost undeniable. The argument—and we need to have it—should be how much more and how quickly should they do more. Such an argument falls outside my Forbes-sanctioned “swim lane” so look to someone else to lead that discussion.
Darby points out that we have only about 12 years “to prevent the worst, most catastrophic elements of [climate change] from wreaking havoc on the world’s population.” He may be right that gambling on large companies to move quickly enough to address these problems is betting against the house.
Instead, I wish to make the point that Harvard’s Clayton Christensen explained more than 20 years ago what is likely to happen in his seminal work, The Innovator’s Dilemma. Startups will innovate and displace behemoths that fail to do so—and real innovation within the massive organization of a large corporation is painfully difficult.
Ford still has a market capitalization of $31.4 billion as I write this. GM’s is even larger at $46.55 billion. Tesla, however, is still larger still at $54.2 billion, despite producing a small fraction of the cars produced by the U.S. auto giants. We seem to be watching the feature film version of The Innovator’s Dilemma playing out in a sort of real-time slow motion. (Full disclosure: I own 60 shares of Tesla).
If Christensen is to be believed, over the next 25 to 30 years, we can expect to see a complete replacement of some of the world’s largest companies, especially those tied to high GHG emissions, like oil and gas companies and some players in the auto industry. While most if not all of them are making investments in clean energy, the dilemma they face between profiting from their legacy businesses and innovating their replacements could be too great for them to succeed.
At the same time, startups with nothing invested and nothing to lose in the production of GHGs, can innovate around them. It will be billionaires who provide at least some of the funding for these startups that provide the economic fuel for their success.
For an example you’re less likely to recognize, Renewlogy is a startup based in Salt Lake City that converts even the lowest quality plastics, including both high-quality plastics that have been degraded by floating in the ocean for years and low-quality plastics like grocery bags that typically aren’t recycled into either diesel fuel or the raw material for food-grade plastic.
Innovation in the renewable energy space is certainly more than I can keep pace with, but I’ve written about solar energy advancements in almost every phase of their design, production, distribution, installation and operation.
Wind energy is already the cheapest source of electricity (but without batteries can’t yet be relied upon for baseload power to the grid). GE, it should be noted, has helped lead innovation in wind turbines and is a major producer—proving that all is not lost for the incumbents.
There are startups in the wind-power arena who are working on affordable rooftop and backyard turbines that could work alongside or in place of rooftop solar where there is too little sun.
Since he published The Innovator’s Dilemma in 1997, much of Christensen’s work has been focused on helping large companies innovate. I hope the 100 big GHG emitters Darby mentioned have Christensen on retainer. They’re going to need him.
In the meantime, I will look to social entrepreneurs to lead the innovations that will solve climate change. Remember, we don’t have to solve climate change with yesterday’s technology or even today’s. The financial incentives have never been bigger. You can count on entrepreneurs and inventors to keep right on innovating in 2019 and beyond—and there is no bureaucracy preventing them from succeeding.
December 22, 2018 at 07:39PM
Forbes – Entrepreneurs