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Two Steps Forward

The VERGE Scenarios

<p>We recently convened a panel of visionary systems thinkers to explore what the technology convergence called VERGE might look like under two divergent scenarios.</p>

For much of 2011, we’ve been talking about VERGE, the convergence of energy, information, building, and transportation technologies, and the potential for disruptive innovation and radical efficiencies it can bring to business and society. We view this convergence as a vast and growing business opportunity that can address climate, energy, and other sustainability challenges while it ushers in a new generation of products, services, and solutions.

Lofty talk, to be sure. But what’s really possible, and how far can this go, especially in challenging economic climes?

Last week, in the GreenBiz Group offices in Oakland, Calif., we assembled a small group of visionary systems thinkers to help us ponder such questions. It was an extraordinary day that helped us envision two divergent VERGE scenarios over the next five years. Along the way, it confirmed our thesis that VERGE frames a significant opportunity for business and the world. 

It was a timely conversation. Last week, we announced our next VERGE event: a three-day conference in Washington, D.C., March 14-16. At that event, we’ll be bringing together corporate executives, policymakers, and thought leaders to examine what it will take to accelerate the VERGE opportunity. 

The March conference will be the beginning of an ambitious VERGE agenda we have planned for 2012, and follows on our initial efforts in 2011 — the three VERGE executive roundtables we held in June, in Shanghai, London, and San Francisco. (Video highlights here.) In 2012, in addition to the DC event, we’re planning:

  • VERGE events again in London and China
  • VERGE executive roundtables at Rio+20 and in New Delhi
  • VERGE roundtables adjacent to the Democratic and Republican national conventions, in Charlotte, N.C., and Tampa, Fla., respectively
  • a VERGE Campus event, to be held at a major U.S. university next fall
  • a research paper on the business implications of VERGE, co-authored with PwC, to be published in the first quarter of 2012

All of the events will live year-round in a virtual conference environment that we're building online.

With that agenda in mind, we convened 10 people to help us think through two VERGE scenarios: what this technology convergence might look like in five years in a healthy, growing economy, with significant market “pull” from corporate, governmental, and institutional customers as well as individual consumers. And how VERGE might fare in an economy that looks more like our current one, or worse: weak or declining, with few public-sector resources to fund or implement VERGE technologies, and with little customer or consumer demand for VERGE products and services. Given the relatively compressed duration of our workshop, we focused both scenarios on the United States, even though VERGE is a global opportunity.

The assembled group was a powerhouse. It included, alphabetically, Nicole Boyer, Managing Director or Adaptive Edge; Stephan DolezalekManaging Director and Group Leader, CleanTech at VantagePoint Capital Partners; Lisa Gansky, marketect, serial entrepreneur; and author of The MeshMichael Kleeman, affiliated with the University of California San Diego, IGCC and others; Tim O'Reilly, founder and CEO of O'Reilly Media; Rodrigo Prudencio, Partner at Nth Power; Stephen Selkowitz, Department Head, Building Technologies at Lawrence Berkeley National Lab; Dan Sturges, a sustainable mobility pioneer and designer of GEM cars, the first mass-produced electric vehicle; and Lorie Wigle, General Manager, Eco-Technology Program Office at Intel. Robert Shelton, Managing Director, PwC's PRTM Management Consulting, facilitated the workshop.

What did we find? I can't do to justice to the entire workshop in a few hundred words -- the conclusions will be woven through our 2012 agenda of conferences and research -- but the outcomes of even the "worse-case" scenario were encouraging: Even in a down economy, given the trajectories of energy, information, building, and transportation technology trends, the convergence can still have a salutary effect on energy, waste, climate and pollution -- all while improving buildings, cities, and lives. For example, car-sharing and ridesharing -- both of which provide mobility on demand without needing to own vehicles -- will increase even in tough economic times, driven (as it were) by the need for individuals to reduce expenses and by cities' need to reduce the costs and impacts of congestion.

One of the big players in VERGE -- arguably, the biggest -- will be the U.S. military, which already is aggressively pursuing a range of technologies that fall under the VERGE umbrella. Which makes perfect sense: military bases are, in effect, self-contained cities that need efficient and reliable power, and for which waste and inefficiency hamper their critical mission. The Defense Department has initiated a number of programs piloting intelligent buildings, microgrids powered by a diversity of renewable and nonrenewable energy resources, energy storage technologies, self-driving vehicles, and more. (We'll be hearing about some of these at our D.C. event.)

In a challenging economy, large companies and institutions like governments and universities will be key buyers of VERGE technologies, which will help them cut costs and streamline services. Large, incumbent technology providers -- the GEs, IBMs, and Fords of the world -- will be dominent players; smaller, innovative start-ups will travel a tougher road to market. Capital-intensive infrastructure projects -- smart roadways, for example -- will be harded to fund. The turnover of assets -- buildings and vehicle fleets -- will be slower, hindering market uptake of newer, smarter replacements. 

But the demand for efficiency is nonetheless likely to grow, even accelerate, when times are tough. Retrofits of buildings and infrastructure will take precedence over building new ones. So-called "collaborative consumption" businesses -- which typically utilize information technology to increase the utilization rates of everything from cars to clothing to power tools to vacation homes -- will gain traction among tight-fisted consumers.

And when times get better? There's a rich palette of opportunities from which to paint a rosy scenario: intelligence embedded in just about everything (the so-called Internet of Things), engendering radical efficiencies while fomenting new products and services. Intergrated mobility systems, from mass transit to neighbood electric vehicles, that enable efficient, door-to-door transportation solutions while reducing congestion and pollution. Products and services that emphasize relationships and experiences over ownership and consumption. Cities that more efficiently utilize space while creating healthy, more livable environments.

It may sound a bit pie-in-the-sky. But a decade ago, who'd have imagined streaming motion pictures to our telephones, or that electric vehicles would be forthcoming from every major auto company?

Such developments, surprising or not, stem from the same kinds of developments our scenario workshop participants foresee for VERGE: the inexorable march of technological progress, innovative collaborations between unlikely allies, increasing demands for radical efficiencies, the proliferation of smarter and interconnected devices, and insatiable appetites for new and better experiences, and for the next, next thing.

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