The word innovation is overused in business and economics. This is probably because few people are against the idea. It’s a word which conjures up thoughts of human ingenuity, new discoveries, and improvements to our lives. Innovation is what human beings have been doing for centuries and will continue to do as we seek new technologies to advance society.
But it’s worth taking a step back and considering not only what we mean by innovation, but how we want innovation to be tailored to fit the climate emergency.
We face a serious challenge to transform our economies and cut emissions to zero within a generation. Not only do we need to make sure that our research institutions are up to the challenge, but that they are appropriately funded. In the UK, only 1.7% of the country’s GDP goes into R&D spending. And within this only a fraction, about £0.2 billion, is spent on energy (including water). Aerospace has long been the industry of choice in the UK and continues to be one of the winners; latest figures show that, in 2018, the sector undertook R&D worth £1.7 billion, with government in part supporting the effort.
The UK lags behind other developed nations for innovation spending. The average across the OECD is 2.4%. Germany spends 3.1%, and the likes of Israel and South Korea reach an astonishing 4-5% of GDP. The UK’s position is hard to marry with a commitment to reach net-zero emissions. This needs to change quickly. There is little use in considering the nature of innovation if we are doing so little of it.
For some business leaders innovation is not about new ideas and discoveries. Instead, it’s about efficiency savings and productivity. This is lazy thinking. If we don’t put ambition at the heart of innovation, then we erode the meaning of the word. We fall back on thinking it’s about improving the number of baked bean cans which come off the factory conveyor belt. Innovation is about tackling the big ideas and problems. Growing populations, climate change, COVID 19 and future pandemics — we won’t solve any of these with more baked bean cans.
People are often astonished when they see what human beings can achieve when they act like they are in a crisis. Living under the chaos of coronavirus has been a clear illustration of this fact. Consider the F1 teams which started manufacturing ventilators, or the vending machine companies which switched to supplying PPE. Add to this the miracle of developing multiple new vaccines in a matter of months and we are starting to see what innovation can really do.
As Europe starts to recognise the fundamental changes needed to create net-zero systems, innovation will play a central part. Solar and wind power will form the backbone of our future zero-carbon energy mix, but that doesn’t mean we are done innovating with renewable technologies. Marine, floating wind, and green hydrogen could make huge strides with the help of dedicated research teams. And couldn’t the aerospace industry use some of that government funding to invent an aircraft so energy efficient it can fly around the world using only the power of the sun?
But innovating to net-zero emissions isn’t just about new technologies, it’s about rethinking how the energy system works and creating new marketplaces to support consumers. The Committee on Climate Change, set up to advise the UK government on reaching its climate targets, estimates that over 60% of the measures to reach net-zero in the UK will need behavioural or societal changes.
Not only is including consumers the right thing to do, it’s urgent and necessary. We need innovation to support the creation of a smart energy system where our homes are enabled to become mini power plants. Smart technologies will allow households to use clean power from solar panels, store it in an electric vehicle, or battery, and send back to the grid at times of low demand.
We need to make sure new policies and regulation encourages this form of imaginative innovation, and doesn’t lead with efficiency, or maintain the status quo. Making more and doing more of the same thing won’t help us create tomorrow’s net-zero society, even if we all love baked beans.