The U.S. National Academies are researching current trends in innovation policy and how best to develop leading-edge technologies. To get the most valuable results, they have established an international dialogue on innovation programs and best practices. So far, the Academies have been working with Japan, India, and the Belgian region of Flanders. More recently, a high-level conference in Washington, D.C. took a closer look at U.S.-German innovation policy.
Life often is a zero-sum game: if I get a bigger slice of pie, you will get a smaller one; I win, you lose. The amount of pie is unchanged. In situations that are “win-win,” however, cooperation leads to benefits for both parties. Take the example of sponsorship: company X profits from being an official sponsor of the soccer World Cup, because it will raise sales and improve its image. Meanwhile, the world football association, FIFA, rakes in a huge amount of money. Both win.
But what about triple-win scenarios? A prominent example of a “win-win-win” situation is investing in the green movement. Not only does our planet profit from reduced greenhouse gas emissions, but the industry that invests in green technology also profits, as will a country’s energy security. A transition to renewable energy can promote energy security because the less energy a country imports, the more independent that country is, and the higher its energy security is.
In a national energy mix with a high share of renewables, net imports of electricity will increase in the medium term (due to low-priced electricity generation abroad), but overall imports of fossil fuels such as oil and coal will decline significantly. Projections indicate that in the Germany of 2020, more than 20 billion Euro will stay in the country –annually!—due to reduced energy imports. This number is expected to increase to 40 billion Euro in 2030. At the same time, a massive job market emerges from growth in renewables. In Germany alone, some 340,000 green jobs have already been created over the last few years.
So what is needed to create triple-win situations? Innovations! But what does this mean? Conference participant Bernhard Milow, with the German Aerospace Center (DLR), explained it this way: whereas the goal of research is to gain knowledge and to develop inventions, the goal of innovation should be marketable products. His colleague, Klaus Zimmermann with the German Institute for Economic Research, is even convinced that the performance of a country’s economy, and in particular its export sector, is driven heavily by innovation.
Innovations in the energy sector are various. In our ReVolt series on innovations in the climate and energy world, we have reported on third-generation biofuels from algae, a Chinese futuristic bus that would glide above automobile traffic, the use of Managed Print Services to reduce the use of paper and ink in offices, and new cooling methods using Concentrated Solar Power (CSP).
At the innovation conference, attention quickly turned to electric vehicles. Patrick Davis with the U.S. Department of Energy (DOE) introduced the Battery Initiative for Electric Vehicles, which aims to put 1 million plug-in hybrid electric vehicles (PHEVs) on U.S. roads by 2015 and to lower the battery cost per kilowatt hour from $1,000 to $300 by 2014. Furthermore, DOE wants to establish a complete value chain for lithium battery manufacturing that includes the R&D, technology, design, manufacturing (from material to cell), recycling, as well as the charging infrastructure. As Richard Steinberg with automaker BMW noted, “Electrification is the only answer!”
Broader innovations were also discussed, such as the Transatlantic Climate Bridge (TCB). German Ambassador Klaus Scharioth observed that the TCB is an “excellent illustration” of promoting innovative ideas and said that he was very proud of the close German-U.S. cooperation in the area of environmental and climate policy. John Holdren, Assistant to the U.S. President for Science and Technology, highlighted the transatlantic cooperation in science, technology, and innovation—in particular the U.S.-EU Joint Consultative Group (JCG)—as well as the flourishing institute-to-institute cooperation as illustrated, for example, by collaboration between the U.S. National Renewable Energy Laboratory and Germany’s DLR. In California, transatlantic cooperation has resulted in plans for a 1 GW CSP park (Blythe Solar Power Project), the largest solar energy project on U.S. public lands. The park will be installed by a German-American joint venture: Solar Trust America and Solar Millenium LLC.
This leads us to the question of how innovations are implemented. On the U.S. side, hubs seem to be the perfect solution. The DOE’s Energy Innovation Hubs are multidisciplinary and multi-institutional research centers that bring together the expertise of academia, industry, and government. Ginger Lew, Senior Advisor to the White House National Economic Council, also highlighted the importance of entrepreneurship, small and medium-sized businesses, and regional innovation clusters where shared capacities render work more productive and effective.
Triple-win situations can only be achieved with the right policies and considerable investments. But as both the 2009 McKinsey report Pathways to a Low-Carbon Economy and the widely cited 2006 Stern Review on the Economics of Climate Change show, investments will pay off: starting a green revolution and combating climate change will cost 1 percent of global GDP each year, whereas the costs of non-action would rise to 5 percent of global GDP annually.