Charting the Future Towards 2032 was the theme of our recent 15th Cleantech Forum San Francisco. Some focus was given to the idea of imagining how things might develop over the next 15 years, given our 2017 starting point, itself a result of where the last 15 years has taken us.
This three-part blog series is intended to provide some perspectives to help you get set for the year and the years ahead, drawing on my own keynote at Cleantech Forum San Francisco in January and many recent conversations with key players and thought leaders in our innovation ecosystem. Part 1 focused on sources of capital for innovation companies. This second part is focused on three industries we called out as worth keeping an eye on over the next 15 years.
There is a lot of interest in and focus on the Utility of the Future, on how the Oil & Gas majors evolve their businesses over the coming years, and on the disruption the Automotive sector faces as next-generation mobility service and autonomous technologies proliferate.
I stuck my neck out at our recent Cleantech Forum San Francisco, to argue why I think, over the next 15 years, more and more industrial sectors will feel the force of disruption and creative destruction, as more and more convergent technologies become more and more affordable, and as more and more intersect and connection points between industries emerge, allowing other players and new models to develop.
I called out three beyond the Power & Utilities and O&G industries at the Forum. But no industrial player should be complacent.
The Mining industry is challenged and ripe for innovations
Despite seeing record demand (and at times record high commodity prices) for its products over the last 15 years, profitability has not been that impressive. That is one strong reason the mining industry will need to innovate how it operates. It is an innovation laggard, investing only about 0.5% in R&D, compared to Oil & Gas’ 3%. And while the O&G majors have adopted open innovation and corporate venturing programs, Mining companies are conspicuous by their absence.
Another driver of innovation will be the unsustainable nature of its current operating methods, which may over time threaten its license to operate. Its remote sites surely represent opportunity for distributed energy and water technologies. Consider these facts Peter Bryant told us at the Forum: 3-5% of global electricity production is consumed by the Mining industry for breaking up rocks; the Mining industry is the largest consumer of diesel; and only 29 of approximately 40,000 sites worldwide use renewables. Further energy is expended pumping water to remote sites, up vertical mountains in the case of Chile, such is the water scarcity of most “water-hungry” mining sites.
Nothing new technologically is needed to address some of these issues – just a different approach. Innovation looks set to come play a strong, and possibly disruptive, role in the Mining world over the next 15 years. I, for one, will be watching with interest.
Shipping is in need of greater intelligence and efficiencies
Right now, there is a lot of attention paid to the future of transportation on land, be that through the lens of the onset of electrification, or from the angle of the rise of next generation mobility services enabled by greater autonomy and connectivity.
What is or isn’t happening in the shipping industry, which moves 90% of world trade from one place to another, is somewhat invisible to most of us. And yet, it is a massive industry that fundamentally has the same challenges as the movement of things on land. Like Mining, it is not in a profitable state as an industry, and so it is reasonable to assume a drive for ever-greater efficiency will ensue.
There is no particular reason why autonomous technologies and algorithms to optimize routes and speeds for fuel efficiency and load efficiency could not be adopted. This summer saw the release of a white paper by the Rolls Royce-led Advanced Autonomous Waterborne Applications Initiative (AAWA). Their year-long work concluded that there would likely be remote-controlled ships in commercial use by the end of the decade, offering optimization of ship use and cuts in fuel consumption.
Intelligent shipping is surely on it way, a subject we intend to look into more at our 13th Cleantech Forum Europe , this year in Helsinki on May 16-18 – a perfect location for such given Wärtsilä’s 2016 acquisition of Eniram, a Global Cleantech 100 alumnus company.
Changes are afoot for the Chemicals industry from technology to more sustainably-conscious customers
The third industry I expect to experience a great deal of change over the next 15 years is the chemicals industry. Here is an industry that, post-WWII, has been built on the drivers and principles of ever-greater centralization and economies of scale. Key trends such as personalization and localization, enabled by advanced manufacturing technologies such as 3D printing, mean that not only are small-batch, customized, or “micro” and local manufacturing now possible, but they are becoming affordable and will be in demand.
In addition, there is a much greater eco-consciousness among the millennial generation. Nielsen’s 2014 survey found that 51% of millennials globally said they were willing to pay a premium for sustainable products. This looks likely to give force to the rise of bio- and other substitute materials, often made from converting waste to value. Such shifts, as they become more mainstream year on year, would lead to a fundamental change. Supply chains would become circular, shorter and more local, in contrast to the linear, global, and mass-volume supply chains of chemical companies today.
I expect significant pressures for change over the next 15 years. Can chemical companies innovate and adapt?