State of Green Business: Sustainability solutions become open, distributed

State of Green Business: Sustainability solutions become open, distributed

Companies in a growing number of sectors are giving up secrecy in favor of joint sustainability efforts.

This article is part of a series of excerpts from the 2015 State of Green Business report.

In a world where information is power and sharing is the new currency, it makes sense that companies would open up the kimono to share their insights and intellectual property for solving big sustainability challenges.

That’s exactly what’s happening, and more so than most people recognize.

The idea of “open innovation” — the organized exchange of knowledge to accelerate innovation that benefits companies and markets — has been around for years; the term was coined more than a decade ago by University of California at Berkeley business professor Henry Chesbrough. It represents a paradigm shift from “closed innovation,” in which companies tightly control their own ideas, as well as their execution, which was a chief tenent of corporate strategy throughout the 20th century.

Open innovation took off initially in the software world, where systems such as Linux and Apache were built by thousands of individuals, all of who ceded ownership of the basic code, but were able to use the collective creation to launch their own products and services.

Today, that mindset is imbuing the sustainability marketplace with everything from electric cars to agriculture to water systems. And it is being employed by some of the world’s biggest companies — among them, GE, GM, Siemens and Unilever — to create the next generations of low-carbon technologies.

It’s also not just about being “open.” It’s also about being “distributed.” Industries are moving from centralized to distributed systems — think rooftop solar energy systems instead of centralized power plants, or 3D printing that can move manufacturing to wherever in the world customers are.

In many cases, open and distributed systems can drive new efficiencies, dramatically reducing time, energy, materials and waste. Perhaps more important, they can make systems safer and more resilient against a wide range of threats, from economic swings to terrorism to Mother Nature’s wrath.

Seeds of change

It is hard to overstate the potential for all of this to disrupt markets.

Consider the growing conversation over “open” versus “closed” agriculture. Indeed, the original open source entrepreneurs weren’t software developers — they were farmers. They routinely innovated and optimized crops and breeds, sharing seeds or offspring with other farmers, who similarly improved on them.

During the late 20th century, seeds and breeds became patented and privatized. This incentivized companies such as Dow, Dupont, Monsanto and Syngenta to develop innovative crops, including genetically modified varieties with unique characteristics. It also placed the agricultural genome in the hands of a small group of large companies. For some, that’s proved problematic.

Perhaps as a backlash, open-source ag platforms are sprouting. For example, the Open Source Seed Initiative, born in 2012 at the University of Wisconsin, aims to provide an alternative to the patent-protected seeds — a free exchange of seed that can’t be patented. There’s Farm Hack, an open-source community focusing on “resilient agriculture”; FarmBot, an open-source precision farming software package; and Rural Advancement Foundation International, or RAFI, which along with FarmBot created an open source online library of agricultural innovations.

Can open-source ag disrupt the dominance of a few big corporations? It’s very early in the game, but it will be interesting to watch.

Finding the next frontiers

The trend goes far beyond farming. A wide range of companies in sustainability-related industries as varied as minerals and mining, energy systems, electric vehicle charging and water management are turning to open innovation platforms for new sources of innovation and inspiration.

Philips International B.V., the Dutch electronics giant, created the simplyinnovate platform to drive new levels of innovation and efficiency in lighting products. Unilever launched an online platform offering experts the opportunity to help the company find the technical solutions it needs to achieve its ambition of doubling the size of its business while reducing its environmental impact. ABB, the Swiss-based global power and automation technologies company, is launching open innovation partnerships with universities, research institutions and others to develop an open smart grid ecosystem. Last year, GE launched an open innovation challenge aimed at improving the energy efficiency, decreasing emissions and reducing overall the environmental footprint of mining tar sands oil.

Such ideas are nearly limitless, extending beyond companies and markets.

For example, in 2010 the design firm IDEO created an online platform called OpenIDEO to help solve pressing societal challenges by engaging the masses. In 2012, Steelcase, the office furniture giant, sponsored an IDEO challenge to help cities such as Detroit find their way back from the brink. The challenge asked, “How might we restore vibrancy in cities and regions facing economic decline?” Response to the challenge was overwhelming.

Nonprofits are getting into the act. The Rocky Mountain Institute’s Project Get Ready acts as a platform for open innovation and information exchange aimed at accelerating the recharging infrastructure for electric vehicles. It has helped a network of 30 North American cities share information and identify best practices for making EV charging seamless and ubiquitous.

And then there’s Nike, whose many sustainability innovation projects have resulted in innovative tools that the company has shared widely. For example, the company launched the GreenXchange, a pioneering platform for sharing intellectual property; an Environmental Apparel Design Tool, released publicly to help clothing designers make more sustainable choices; and the Nike Materials Sustainability Index, which the company developed to select “environmentally better materials,” then released the tool to the world.

Granted, open innovation initiatives don’t always work.

The website for Nike’s aforementioned GreenXchange, launched with great fanfare at the World Economic Forum in 2010, no longer exists; it didn’t get the participation of enough other companies. Similarly, BioForge, a set of online tools for scientists to collaborate on genetic research, created in 2005 by Cambia, an Australian nonprofit at the center of open innovation in agriculture, shut down after three years. Like Nike’s project, BioForge didn’t get enough participation to create a critical mass of ideas and users. Arguably, both initiatives were ahead of their time.

Whether individual efforts succeed or fail is beyond the point. Innovation is like that. Some things work and others don’t.

What’s exciting, and potentially revolutionary, is the growing ability of diverse, distributed communities to upend the status quo, potentially making products and services cleaner, more efficient and socially equitable, all while creating profitable new markets.

Hear much more about the State of Green Business at the upcoming GreenBiz Forum 15.