San Diego Innovators Can Be Leaders in Realizing Global Sustainability

(This post originally appeared in the CleanTech San Diego website:  http://cleantechsandiego.wordpress.com/2014/04/25/san-diego-innovators-can-be-leaders-in-realizing-global-sustainability/  and is reprinted with permission of the author.) 

In early April, CleanTECH San Diego was represented at the first Global Solutions Summit in Washington, D.C. The conference follows the Little Rock Accord, signed December 2012, between Club de Madrid, an organization of former heads of state, and the P80 Foundation, comprised of many of the world’s largest public pension funds. 150 people attended from 14 countries, eight embassies, four federal agencies, the World Bank, major universities, and 20 NGOs. What could motivate so many people to travel so far – several from halfway around the world – for yet another conference about sustainable business solutions? The answer: a big vision and an unwavering belief that through collective action that vision will be realized in the near future.

Participants shared recognition of the need to globalize sustainability, combined with dispassionate acknowledgment of the barriers to achieving such a result. When we consider these global conversations, especially in conjunction with recent reports from the United Nation’s challenging world leaders to act more collectively and aggressively on climate change solutions, what are some takeaways relevant to what we are all working on and thinking about in San Diego?

Firstly, none of this is easy. Traditional patterns of thinking and doing business stand in the way of accelerated commercialization and deployment of proven technologies. The consensus was that while governments are starting to “get it,” and philanthropic investors are becoming increasingly engaged, global corporations are not investing their large cash reserves to a meaningful degree. It’s widely understood that for scale to be realized, economic viability must be proven – a founding principle of CleanTECH San Diego. But proving also requires significant capital. This “chicken and egg” problem exists at all levels of sustainable technology deployment worldwide.

At the same time, there is a strong belief that new disruptive and transformative technologies will soon create enormous opportunities to improve human life and the world’s environment. Historically, when transformational change occurs, legacy companies locked in their old worldviews and operating models do not respond and often disappear. This history is a challenge to the leaders of these legacy companies, and, more importantly, a reason to expect new companies will emerge with currently unimagined disruptive innovations. This science-technology-business progression is a San Diego strong suit and a great opportunity for our region.

Many discussions involved sustainable energy, a sector that is relatively mature. Renewable technologies, such as solar, are being deployed at scale in our region by the likes of Sullivan Solar and Soitec, among others. San Diego is a major market for companies like Car2Go and NRG eVgo, securing our role as a national leader in electric vehicles. Forward-thinking energy-efficiency projects underway regionally are putting San Diego on the map as a leading “smart city.” Energy creation and demand reduction represent unimaginably huge market opportunities. The surface has just been scratched, and clearly San Diego companies are well positioned to participate.

While energy gets most of the attention, food and water security are recognized as the key to the quality of human life. There is serious concern that traditional ways of producing and delivering food, especially animal-based proteins, are simply unsustainable. So how does a growing world population with more disposable income get fed? Algae technology is promoted as a very real option, with food grown vertically using little potable water, or in brackish water on non-farmable land. As home to powerhouse algae companies like Sapphire Energy, Cellana, Synthetic Genomics, and many others, San Diego is a world leader in algae research and development.

Perhaps trumping it all for disruptive potential is the increasing ability to understand and manipulate the genome of all living things. In less than a decade, analyzing the human genome has gone from a million dollar undertaking to affordable. There is optimism that through genomics the world’s food resources will dramatically increase in a sustainable, close-to-market manner. Or even that the destruction of the world’s coral reefs could be reversed by new strains of algae designed to thrive in the oceans of the future. Thanks to the incredible work of our local universities, and the extraordinary vision and leadership of Dr. Craig Venter, San Diego is on the leading edge of this technology revolution.

It might be possible to become discouraged at a conference like the Global Solutions Summit. The majority of presentations were about false starts, barriers, and failures. But discussing what isn’tworking helps design what will work. The global sustainability problems we face canbe solved, just not necessarily in ways we can imagine today. There is no doubt that innovative and visionary San Diego institutions and companies, working collaboratively with counterparts around the world, will have an important role to play in that future.

 Jim Waring, Executive Chairman,
CleanTECH San Diego

I was recently approached by a young African entrepreneur who was seeking advice from me and several others about how to build an entrepreneurial ecosystem in his home country.  We both agreed that a dynamic entrepreneurial ecosystem is the sina quo non for sustainable development. Without it, none of the other official aid programs stand a realistic chance of generating long term, inclusive prosperity or having a transformative impact on the economy and society.  We also agreed that building an entrepreneurial ecosystem should be a broad-based inclusive process – one that includes, to the greatest extent possible, university students and other members of the millennial generation; members of the Diaspora and expatriates who can combine familiarity with local customs and business conditions with knowledge of international technology, finance and business practices; experienced business executives from local companies and multinational corporations; members of the financial community; and a broad swathe of local residents and the public at-large.  

But then I asked, “What kind of companies are we trying to nurture in this entrepreneurial ecosystem and what are we trying to accomplish with this ecosystem?”  

Start Up weekends, boot camps, and accelerators have perfected many of the techniques for nurturing entrepreneurial start-ups. But these efforts generally focus on "asset lite" companies devoted to app development, ecommerce, gaming, social media, etc.  Of course, there are also large numbers of development-oriented app developers emerging from hackathons and elsewhere who are working in such important fields as mobile money platforms for Diaspora remittances, telemedicine and remote diagnostics, disaster mapping, crowd sourcing reports of corruption and other manifestations of bad governance, and providing marketing and crop management information to local farmers, to name just a few.  But these efforts too generally depend on asset-lite companies.  

As useful and/or profitable as these services may be, entrepreneurial ecosystems that support these endeavors do not address such basic development needs as electricity for all, the provision of clean drinking water, food processing, and the provision of other essential services. The challenge for ecosystem builders in emerging markets, I believe, is to apply the lessons generated from start up weekends, bootcamps, and accelerators to these more asset-intensive activities. Put slightly differently, how can we take the lessons learned from start-up weekends and accelerators to develop entrepreneurial ecosystems that can build reliable businesses around the technologies featured in the Global Solutions Summit and the work of the Global Technology Deployment Initiative (GTDI). 

None of these technologies were developed with emerging market customers in mind.  Quite a few, in fact, were developed for the US military which needs new ways of generating off grid renewable energy and clean drinking water for its forward operating bases.  But many of these same technologies have large and rapidly growing potential markets in emerging markets.  Unfortunately, the entrepreneurs who developed these technologies know how to sell to the US Department of Defense or other governmental entities.  They do not know how to sell to emerging market customers, even though they acknowledge that this is a new and potentially lucrative source of business. 

To help the technology deployment process operate more smoothly, these technology companies need reliable local partners who can (i) incorporate these proven technological solutions into viable local businesses and (ii) tailor these services (clean water, renewable energy, etc.) to the customs and financial capacity of the local population.  Building entrepreneurial ecosystems to support these local entrepreneurs should be the next priority task for entrepreneurial ecosystem builders. Without these ecosystems, neither the Millennium Development Goals nor the post-2015 Sustainable Development Goals will be achievable.

Fortunately, some interesting work is taking root in precisely this area.  In India, for example, the World Bank’s Development Marketplace is striving to build entrepreneurial ecosystems that can nurture “ non-state providers of basic services” such as clean drinking water and rural microgrids.   Also in India, the Lemelson Foundation and others are supporting Vilgro, “an Indian non-profit organization that incubates, funds and supports early stage innovative social enterprises that impact the lives of India’s rural poor.”  In the Maghreb, GIST is sponsoring a Green Start Up Boot Camp for 35 Moroccan and Tunisian green entrepreneurs.  And in Africa, Asia, and the Caribbean, the infoDev network of Climate Innovation Centers are sponsoring boot camps and other activities designed to build entrepreneurial ecosystems that will support the development and deployment of green technologies developed by local innovators and entrepreneurs. 

These and the many similar programs that were not mentioned here are modest, but essential, first steps. However, the key to sustained sustainable development and shared prosperity will require finding ways to scale up these programs so that they extend to many more countries, regions, and villages.

Note: If you know of additional programs, please post additional information in the comments section, including the website address and other salient details. 

Following the annual meeting of the G-77 in Santa Cruz, Bolivia on June 14-15, 2014, the assembled Heads of State and governmental leaders issued the Declaration of Santa Cruz entitled, "For a New World Order for Living Well."  To say that this is a comprehensive document is an understatement.  The more than thirty section headings are an exhaustive and valuable compendium of the development issues that are likely to occupy the time, attention, and finances of the global community over the next several decades. They include such items as eradicating poverty, reducing inequality, internet governance and privacy rights, employment creation, reforming the financial architecture, global economic governance, industry and infrastructure, women in development, trade, migration, climate change, forests, oceans, and biodiversity among others.

Tucked into the middle of this list is a section on “Technology transfer, science and innovation for development.”  Since the subtheme of the Global Solutions Summit was “Technology Deployment for Emerging Markets,” I was especially interested to see what the G-77 had to say on the closely related issue of technology transfer for development.  Alas, the two discussions couldn’t be further apart in tone and substance. 

The GSS focused on private sector mechanisms to finance, organize, and manage the deployment of proven technologies for renewable energy, clean drinking water, food security, and low cost, high quality health care delivery.  The main thrust of the G-77 Declaration, by comparison, is a call for governments and new supranational “mechanisms” to organize, manage, and support technology transfer to developing countries.  “We call on developed countries to implement their commitments to transfer technology to developing countries and provide access to technology on favourable terms, including concessional and preferential terms, to enable the developing countries to shift to a more sustainable development path….We call for the early establishment by the United Nations system of a technology facilitation mechanism that promotes the development, transfer and dissemination of clean and environmentally sound technologies, including cleaner fossil fuel technologies.” (Paragraphs 159-160)

These polar opposite emphases represent more than a clash of ideologies.  They represent divergent views about technology transfer: who actually transfers technology, the pragmatic nuts and bolts of how this happens, what obstacles are currently impeding the smoother flow of technology, and which organizations, institutions, and “mechanisms” are best placed to address these issues and handle these tasks.  Despite the call for intensified government action, the G-77, for example, never explains what specifically developed countries should do to transfer technology “on favourable terms.  More importantly, the G-77 never explains who the developed countries would transfer this technology to and how the recipients would use this technology to produce and deliver clean energy, clean drinking water, etc.  

In short, this portion of the G-77 Declaration displays a profound misunderstanding of how technology is transferred – from whom, to whom, and in what form -- the limited role of developed country governments in this process (with the possible exception of certain pharmaceuticals and vaccines), the role of the private sector, or any of the financing, technology deployment and business model issues that we discussed at the GSS.  

To cite just one critically important fact of life, developed country governments rarely own the technology (photovoltaic cells, conversion of waste to energy technologies, smart electronics and battery packs needed to reduce diesel fuel consumption in diesel generators, wind turbines, nano filters for water purification, etc.) that developed countries need to address such pressing development needs as enhancing access to sustainable energy and clean drinking water.  Calling on developed countries to “transfer technology” without specifying who owns the technology, to whom the technology will be transferred, how the technology transfer process will function, and how the transferred technology will solve real development problems makes for good rhetoric but ineffective policy.

Take the case of off-grid, distributed energy which figures prominently in the UN's Sustainable Energy for All initiative and President Obama's Power Africa initiative.  Virtually all the items and technologies that would be needed to set up a network of rural or peri-urban solar micro-grids -- solar panels, inverters, meters, etc. -- can be purchased off-the-shelf from electrical supply stores on every continent.   Each of these items may contain bundles of embedded IP, but that is no different from my laptop, e-reader, and printer.  Seen from this vantage point, technology transfer in the case of both rural micro-grids and consumer electronics is primarily a matter of going to the store, knowing what to purchase, purchasing it, and organizing all the parts into a coherent system.  

If that's the case and if everything is so easy, why don’t rural micro-grids spring up across the G-77, much like McDonalds hamburger franchises sprang up across the US several decades ago?  I would argue that the answer has less to do with technical and bureaucratic impediments to technology transfer per se and much more to do with putting in place appropriate organizational, financial, and business mechanisms to facilitate the transfer of readily available technology.  More specifically, someone has to buy the equipment, organize the microgrid, finance the equipment purchase, install the equipment, develop billing and payment mechanisms, maintain the grid, establish sales and customer service mechanisms, and scale up the business from one village to several hundred villages.  

A similar argument can be made in the case of clean drinking water. There is no shortage of innovative, reasonably priced water filters fabricated from everything ranging from high tech nano materials to lower tech mixtures of clay and powdered rice husks.   But simply purchasing a  filter from one of the many vendors active in the market is not the same as putting in place a financially and organizationally sustainable mechanism for distributing clean drinking water to millions of customers.  Once again, the binding constraint has less to do with technology transfer in the narrow sense of the terms and much more to do with financial, organizational and business arrangements. 

There is no shortage of interesting, innovative technologies and business solutions which can go a long way toward addressing many of the development challenges outlined in the G-77 Declaration and new technologies are coming online at an accelerating pace. With the exception of some vaccines, we are generally not technology constrained, as a quick perusal of the solutions generated by USAID's Grand Challenges for Development, USAID’s Development Innovative Ventures program, the innovative ventures incubated at the Unreasonable Institute, the "moonshots supported by Solve for X, the social entrepreneurs incubated at Santa Clara University’s Global Social Benefit Incubator, and the companies featured in the Artemis Water Tech Top 50, the Global Cleatech Cluster Association's Global Top 10 Winners, and the US Department of Energy and US Navy's Energy Excelerator program, among others will bear out.   What’s needed are effective mechanisms to scale (i.e., transfer) those technologies and solutions so that they impact a 100 million or more people in the short to medium term. Simply transferring technology from developed to developing countries and establishing a new supranational mechanism as the G-77 advocates, won't begin to address the real obstacles impeding effective technology transfer.

In the next installment of this blog, I’ll discuss some of these real obstacles and possible ways to surmount them.

The purpose of this blog and website is to explore in more detail the broad array of issues discussed at the Global Solutions Summit as well as the many important, related issues that simply could not be discussed to the limited time available. The website and blog are also designed to provide a community forum in which you are welcome – indeed invited and encouraged -- to share your opinions about recent blog posts and, more importantly, to post your own views on related issues, news of upcoming events, book and article reviews, and announcements about new initiatives, technology breakthroughs, etc. 

The GSS was based on the premise that capitalizing on the business opportunities generated by rapid population growth, rising incomes, and increasing rates of urbanization in emerging markets will require new private financing mechanisms, new business models to deploy proven technologies and business ideas from one part of the world to other communities, regions, and continents, and new approaches to designing goods and services tailored to the tastes and needs of these new consumers. 

Alas, developing new initiative is generally more easily said than done.  However, in the course of organizing the GSS, I was encouraged by the diverse array of imaginative financial, business, and technology initiatives that have been developed already.  And I have been heartened even more by the knowledge that there is an even deeper reservoir of promising initiatives that were not discussed at the Summit, either because we simply didn’t have time to discuss everything or because so many wonderful initiatives never made it onto my radar screen.

The Summit, therefore, was a brief, moment-in-time snapshot of a relatively small number of promising initiatives.  With your collaboration and assistance, this blog and website will, I hope, provide a deeper exploration of those issues that made it onto the Agenda as well as the many related, equally- deserving issues and initiatives that were not discussed at the inaugural Summit.

With your collaboration and assistance, I am convinced that we can inspire readers to expand their sense of what is possible and help them use this knowledge to change the world for the better.