Innovation in the Wake of Disaster

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.

9 comments on “Innovation in the Wake of Disaster

  1. Anand
    March 23, 2011

    Good to hear that European Union is supporting the uptake of eco-innovation by businesses through various tools , inspite of Europe being the worst affected by recession. I am sure many more countries will soon start supporting the eco-innovation, because this is the only way they can minimise the effect of uncertanity on businesses .

  2. tioluwa
    March 23, 2011

    i agree with Rich, tough situations like this always bread inovation.

    looks like europe is running ahead in maximizing this opportunity, lets see how others follow suit.

  3. Adeniji Kayode
    March 24, 2011

    I agree with you Rich, If properly handled,destruction should bring more beauty and efficiency.Lets hope to see a new and better Japan soon

  4. Ashu001
    March 24, 2011

    More Trouble coming out of Japan….

    All major automakers in trouble today.

    Supply Chain not a problem??? I think not….




  5. maou_villaflores
    March 24, 2011

    I hope they won't take advantage of the situation by offering their services in very high cost.

  6. itguyphil
    March 24, 2011

    As a wise man once said, the best time to restructure is in crisis. It gives you a chance to think out of the box. And why not, the old norms are “gone” so to speak.

  7. t.alex
    March 25, 2011

    I strongly believe the disaster in Japan  would bring in more innovative products than before. How about new methods and technolgies that can save people from sudden natural disaster like earthquakes.

  8. elctrnx_lyf
    March 26, 2011

    There is going to be lot of new technologies which would be developed to be operated in a stable manner in the owrst of the weather conditions. But, this might actually result in a life where we are too much dependent on technology. I wonder how many calamaties in store for the humans in the future.

  9. saranyatil
    March 27, 2011


    Exactly i feel the same!! innovations may become the reasons for those natural calamities.

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