Unfortunately, sometimes it takes a disaster to spur innovation.
There are probably hundreds of niche businesses that realize the role they can play in the wake of a disaster. For example, a New England-based manufacturer is donating a bunch of its radiation-sensitive identification tags to the US military assisting in earthquake-ravaged Japan. The tags change color to indicate the level of radiation exposure. Another example is the company that developed the winch system that pulled out the Chilean miners who were trapped underground last year. I imagine we'll see more of these tags and rescue systems being used in countries where they're needed.
Events in the Middle East are an opportunity for green technology companies to shine. Replacing fossil fuels with alternative sources of energy should be an imperative for any country dependent on the Middle East for oil. Materials shortages are also facing companies, and businesses in the European Union recognize this.
The following press release was issued on the European Union's Website today:
- The competitiveness of European businesses is increasingly vulnerable to growing materials scarcity which causes price volatility. A Eurobarometer survey published today and presented at the 10th European Forum on Eco-innovation in Birmingham, UK, shows that 75 percent of European businesses have experienced an increase in material costs in the past five years, while 90 percent expect price increases in the future. To tackle this challenge, small and medium-sized businesses are looking to eco-innovation as their answer. However, many businesses are still not fully aware of the potential effects of natural resource scarcity on their future operations.
The Eurobarometer survey aimed to analyse the attitudes of European entrepreneurs towards eco-innovation. Eco-innovation is a term to describe products, processes or other solutions that can contribute to environmental protection or a more efficient use of resources.
Almost a quarter of managers surveyed said that 50 percent or more of their company's total costs consisted of material costs. Three quarters said material costs had increased moderately or dramatically in the past five years.
More than half of the SMEs surveyed said they had introduced technologies to improve materials efficiency in the past five years as a response to the challenge. Eco-innovations related to processes – as opposed to technologies, products, organisation or marketing – were the most popular in the agricultural, water and manufacturing sectors. Companies in the construction sector preferred to invest in green products or services, whereas food service companies tended to implement higher amounts of organisational innovation.
Most importantly, the EU is encouraging local governments to help finance these innovations:
- There are a number of obstacles preventing businesses from investing in eco-innovation. The most significant barriers are linked to economic and financial constraints, notably uncertain demand from the market and the lack of external financing.
Public authorities have a crucial role to play in helping SMEs to overcome these barriers and adopt eco-innovation. The Commission supports the uptake of eco-innovation by businesses through various tools including financing. The Commission is planning to put forward an Eco-innovation Action Plan by this summer that will further help business develop and invest in eco-innovation.
Both government and private investors are understandably leery of financing small or developing businesses in this uncertain economy. But the unrest in the Middle East and the earthquake in Japan have highlighted problems awaiting solutions. It's the tech industry's opportunity to shine.
The tragedy in Japan will have some yet-to-be-fully-determined effects on the electronics supply chain and financial markets. Join us here at 12:00 p.m. ET tomorrow for a live discussion of this developing situation with Malcolm Penn, CEO and President of research and analytic firm Future Horizons.