Sustainable Innovation

        BCSD - TAIWAN
      30th September 2004
        Taipei, Taiwan


    Professor Martin Char...
Sustainable Innovation

Terminology
No common understanding
- Products (Eco-innovation – Fussler et al)
- Technologies
  -...
Type 4:
                                                                                             System
              ...
Sustainable Innovation

Types
• Product/services/technologies
• Process
• Organisational




                   (c) Martin...
Sustainable Innovation
Barriers to sustainable innovation

Background
• Weak understanding and knowledge over how to integ...
Sustainable Innovation

Barriers to sustainable innovation

Markets
•    Green often seems to suffer from a poor perceptio...
Sustainable Innovation
Barriers to sustainable innovation

Organisational
• There is a lack of senior level vision and com...
Sustainable Innovation
Barriers to sustainable innovation

Entrepreneurship and funding 1
•    Poor linkages between exper...
Sustainable Innovation

Barriers to sustainable innovation

Entrepreneurship and funding 2
•   Sustainable technologies/pr...
Sustainable Innovation

Barriers to sustainable innovation

Marketing
•    Weak interaction between marketing and sustaina...
Sustainable Innovation

Opportunities for sustainable innovation 1
• ‘Producer responsibility' laws in Europe and Japan ma...
Sustainable Innovation

Product-Service-Systems (PSS)




          (c) Martin Charter (2004)
Sustainable Innovation


PSS: strategies
Product - oriented services
• Service integration e.g. additional functionality
•...
Sustainable Innovation
Opportunities for sustainable innovation 2
Product Service Systems (PSS) are a promising new busine...
Sustainable Innovation
Opportunities for sustainable innovation 3

Organisational: lessons from Philip’s approach to
eco-d...
Sustainable Innovation
Opportunities for sustainable innovation 4

Organisational: lessons from Philip’s approach to
eco-d...
(c) Martin Charter (2004)
(c) Martin Charter (2004)
Sustainable Innovation

Types
• Product/services/technologies
• Process
• Organisational




                   (c) Martin...
Sustainable Innovation
Action plan
•   Senior level commitment
•   Director with responsibility
•   Project director
•   T...
(c) Martin Charter (2004)
Contact Details
Professor Martin Charter
Director

The Centre for Sustainable Design
Tel:    00 44 1252 892772
Fax:    00 ...
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1new Sustainable Innovation

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1new Sustainable Innovation

  1. 1. Sustainable Innovation BCSD - TAIWAN 30th September 2004 Taipei, Taiwan Professor Martin Charter Director The Centre for Sustainable Design Martin Charter & Associates (c) Martin Charter (2004)
  2. 2. Sustainable Innovation Terminology No common understanding - Products (Eco-innovation – Fussler et al) - Technologies - contaminated land remediation - air pollution - monitoring and control - waste management - recycling - noise and vibration - energy management - consultancy (c) Martin Charter (2004)
  3. 3. Type 4: System 20 Sustainable innovation level Eco-efficiency improvement/ Type 3: Function organisational complexity innovation Type 2: Product redesign Type 1: Product improvement 5 10 20 Tim (years) e Eco-efficiency curves (c) Martin Charter (2004)
  4. 4. Sustainable Innovation Types • Product/services/technologies • Process • Organisational (c) Martin Charter (2004)
  5. 5. Sustainable Innovation Barriers to sustainable innovation Background • Weak understanding and knowledge over how to integrate sustainability into innovation policies • Lack of clear drivers for sustainable innovation • A focus on eco-efficiency and dematerialisation will not deliver sustainable innovation • To move towards higher levels of sustainable innovation (systems) will require long-term, strategic change in societies • Existing focus on incremental improvements or (eco)re-design, rather than functional or system innovation • Limited uptake of sustainable product/eco-design outside of transnationals • Value and supply networks are increasingly geographically disparate (c) Martin Charter (2004)
  6. 6. Sustainable Innovation Barriers to sustainable innovation Markets • Green often seems to suffer from a poor perception • Most markets are still dominated by price • Green markets are still niche markets • Lack of green mass markets • Awareness:action gap • There is a wide variation of awareness of sustainability/ environmental issues • B2C customers tend to be wedded to ownership • Developing countries lack good quality information • 3 billion people live on less than $2 per day (c) Martin Charter (2004)
  7. 7. Sustainable Innovation Barriers to sustainable innovation Organisational • There is a lack of senior level vision and commitment to sustainability • Nervousness over taking a pioneering or leadership role on sustainable innovation • Sustainability is not seen as area of business opportunity • Green is generally seen as a threat-based, compliance agenda • Sustainability issues are rarely included in the corporate strategy, business development and/or the ‘opportunity search’ process • There is a lack of awareness of sustainability/environmental awareness amongst key business functions • Organisational systems and procedures are often inflexible • Product designers and design consultancies still have a poor understanding of sustainability (c) Martin Charter (2004)
  8. 8. Sustainable Innovation Barriers to sustainable innovation Entrepreneurship and funding 1 • Poor linkages between experts, investors, entrepreneurs and inventors • Lack of sustainable innovation catalysts • Academia has not been successful at transferring radical concepts (e.g. functional, systems) of sustainable innovation • Need for bridges between inventors, investors, entrepreneurs and academia • Little recognition of sustainable innovation opportunities amongst • successful entrepreneurs (c) Martin Charter (2004)
  9. 9. Sustainable Innovation Barriers to sustainable innovation Entrepreneurship and funding 2 • Sustainable technologies/product/services are not viewed as major opportunities by investors: - business concepts/technologies often seen as too risky - financial returns often not seen as significant enough to justify investment - not enough successful entrepreneurs with track-records in the area • Inventors/entrepreneurs: lack of start-up funding and business skills (c) Martin Charter (2004)
  10. 10. Sustainable Innovation Barriers to sustainable innovation Marketing • Weak interaction between marketing and sustainability/ environmental professionals • Marketing's role in the product development/innovation process differs from company to company • Sustainability/environmental are rarely involved in the innovation process. • Green product failures due to a lack of involvement of marketing skills and tools • Green is integral to the brand/product/company • Responsible products/brands from responsible companies (c) Martin Charter (2004)
  11. 11. Sustainable Innovation Opportunities for sustainable innovation 1 • ‘Producer responsibility' laws in Europe and Japan may stimulate series of new (sustainable) business concepts • Emerging opportunities for sustainable/greener technologies/ products/services in B2G markets e.g. Japan • A smarter use of demand and supply-side government policy tools may start to create opportunities (e.g. Integrated Product Policy (IPP)) • Various companies exploring new business models in attempt to open up the market of the 3 billion people who live on less than $2 per day (c) Martin Charter (2004)
  12. 12. Sustainable Innovation Product-Service-Systems (PSS) (c) Martin Charter (2004)
  13. 13. Sustainable Innovation PSS: strategies Product - oriented services • Service integration e.g. additional functionality • Product extension e.g. upgrades and repairs Use - oriented service (selling function) e.g. leasing or rental of computer and office equipment Result - oriented service • Product-substituting service e.g. virtual answering machine • Vertical integration e.g. downloadable music Source: www.suspronet.org (c) Martin Charter (2004)
  14. 14. Sustainable Innovation Opportunities for sustainable innovation 2 Product Service Systems (PSS) are a promising new business development approach that may help create more sustainable solutions. However, - Business do not recognise the terminology of PSS - PSS are not developed in a systematic and structured manner - PSS often means a closer focus on: - customer needs - maintaining good customer relations - PSS will require a shift in corporate culture from ‘product- orientation’ to ‘service-orientation ‘ - Sustainable PSS solutions are likely to industry/need specific - Defining the sustainable/environmental performance is complex due to lack of good quality lifecycle data and information - PSS does not always deliver sustainability benefits - There are a lack of successful sustainability-driven PSS cases (c) Martin Charter (2004)
  15. 15. Sustainable Innovation Opportunities for sustainable innovation 3 Organisational: lessons from Philip’s approach to eco-design management 1 • Focus on the eco-design management process • Product-level environmental considerations should be left to Business Units (BUs) to determine • Clear demarcation of responsibilities of: - Corporate - BUs • Both Corporate + BUs need a shared vision of the proposed outputs of the process e.g. Green Flagship products • Systematic and continuous integration of environmental considerations into the Product Creation Process (PCP) • Sell the commercial benefits of eco-design in the language of different business functions (c) Martin Charter (2004)
  16. 16. Sustainable Innovation Opportunities for sustainable innovation 4 Organisational: lessons from Philip’s approach to eco-design management 2 • Mechanisms to share and communicate information/knowledge throughout global value or supply chain or networks • More mature eco-design management systems are likely to produce more eco-innovation Organisational: lessons from SC Johnson’s approach to eco-design management • Innovation tends to be frequent e.g. month-to-month and incremental • Internal branding of sustainable product/eco-design programmes e.g. Greenlist ™ • Institutionalise sustainable product/eco-design programmes through integration into existing processes (c) Martin Charter (2004)
  17. 17. (c) Martin Charter (2004)
  18. 18. (c) Martin Charter (2004)
  19. 19. Sustainable Innovation Types • Product/services/technologies • Process • Organisational (c) Martin Charter (2004)
  20. 20. Sustainable Innovation Action plan • Senior level commitment • Director with responsibility • Project director • Taskforces: technology/product/service; process; management • Define ‘opportunity zones’ • Complete research + pilots • Selection process • Launch sustainable innovation culture • Develop strategy, programmes, responsibilities • Implementation, monitoring and control (c) Martin Charter (2004)
  21. 21. (c) Martin Charter (2004)
  22. 22. Contact Details Professor Martin Charter Director The Centre for Sustainable Design Tel: 00 44 1252 892772 Fax: 00 44 1252 892747 email: mcharter@surrart.ac.uk web: www.cfsd.org.uk Martin Charter & Associates Tel: 00 44 1252 722162 Fax: 00 44 1252 722162 email: martincharter@compuserve.com (c) Martin Charter (2004)
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