Businesspeople like to complain about things, a lot. To be fair they are people, and that is something we people like to do. As such, it is always interesting to see when things that may seem like complaints to some turn out to be boons to innovation. What then are a few unexpected friends to innovation?
Lack Of Infrastructure
A lot of times businesspeople get really excited about positive infrastructures. Things would be so much easier if there were great infrastructure to build upon. This is often an important point, but far from always. One of the most interesting things we see is the takeoff of innovations driven by the lack of infrastructure. While this may seem a bit odd at first glance if you think harder it makes sense. People with less sometimes have to be the most inventive — ‘necessity is the mother of invention’.
Even going beyond individuals if you are launching a new innovation the lack of a competing traditional infrastructure can help. One reason mobile phones took off relatively quickly in many less economically developed countries is that there weren’t many landlines. If the new innovation is competing with landlines it needs to be better than that. Of course, mobiles are better than landlines and so have displaced a large many landlines even where excellent landline infrastructure exists. But the benefits if you don’t have a landline are much larger. The mobile phone isn’t competing with landline tech which, while clunky, does still get you in touch with people. Instead, if there is no landline infrastructure in place this means the mobile is often competing with lack of communication. The case for a mobile phone is just much more compelling an offering. Not everyone can afford a mobile but if you can somehow make a mobile phone work with your budget the benefits are massive.
The Possibility Of Green Tech
That innovation can take off with a strong infrastructure can be a massive positive from green technology. The new green tech gives hope that we can help people have a better standard of living while doing much less environmental harm than the currently richer countries have done on their way to wealth.
…many of these countries lack well-developed infrastructures. This creates and opportunity to leapfrog browner technology and to be considerably greener from the start.
Lenox and Chatterji (2020) page 108
It isn’t everything but it is a source of hope.
Information Helps And Other Unexpected Friends to Innovation
Information can be vital to making the world better. This is one reason why certifications can be useful.
Here regulation can help. Well-respected government information-based regulations can help inform the consumer and let them make better choices. Want an energy efficient appliance? The EPA has a certification for you. Government can require information sharing and information is fundamental to a free market. Government actions, like Energy Star labeling, actually facilitate the market. The regulation isn’t causing a problem — it is actively helping the market. It is exactly what government should be doing. There are many cases where the free market works well only because the government gets involved.
They also note a story of how a regulation to limit effluent being dumped actually helped the business. It encouraged the business to revisit its procedures. To stop the pollution the company tightened it procedures and unexpectedly saved money on the chemical inputs.
Uncompelled by regulation, they had never thought about analyzing their waste stream, but once they turned their attention to it, they discovered cost-saving opportunities.
Lenox and Chatterji (2020) page 86
The world can be better, and business can be part of it. Simplistic notions of what spurs innovation don’t always apply.
For another book by Michael Lenox see The Path To 2050
Notes on a book about frugal innovation Simple And Smart Solutions
And my thoughts on non-GMO labelling see GMOs Forget The Science
Read: Michael Lenox and Aaron Chatterji (2020) Can Business Save the Earth? Innovating Our Way to Sustainability, Stanford University Press
