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innovation innova innovation Green and Competitive V. S. John Ly
Green and Competitive <ul><li>… ending the stalemate on environmental control and prevention—e.g. air and water pollution,...
Advantages of Being Green <ul><li>Pollution & Waste  = inefficiency in production process or product design </li></ul><ul>...
Process Benefits <ul><li>Materials savings  from more complete processing, substitution, reuse, and recycling of productio...
Product Benefits <ul><li>Higher  quality , more consistent products </li></ul><ul><li>Lower  product costs  (e.g. from mat...
innova Environmental Regulation <ul><li>Misconceptions of environmental regulation: </li></ul><ul><ul><li>High cost, proce...
Environmental Regulation 1 1  Porter, M.E., et al.  Green and Competitive: Ending the Stalemate .  (1995)  Harvard Bus Rev...
Environmental Regulation 1 1  Porter, M.E., et al.  Green and Competitive: Ending the Stalemate .  (1995)  Harvard Bus Rev...
The Dutch Flower Industry <ul><li>Problem </li></ul><ul><ul><li>Pesticides, herbicides, and fertilizers were leeching into...
Do We Still Need Regulations? <ul><li>Necessary to  create pressure  and encourage companies to  innovate </li></ul><ul><l...
innova 3  West, L. “Should the United States Ratify the Kyoto Protocol?” About: Environmental Issues.  http://environment....
innova 1  Porter, M.E., et al.  Green and Competitive: Ending the Stalemate .  (1995)  Harvard Bus Rev .  Sept Issue:120-1...
6  Design e2: The Green Apple .  (2006)  PBS .  Accessed on Dec 10, 2006, http://www.pbs.org/designe2/ Design: e2 <ul><li>...
Design: e2 <ul><li>Boston tunnel project: The Big Dig </li></ul><ul><li>Cost of $14.6B to improve transportation and exten...
Concluding Remarks <ul><li>Taking care of the environment is crucial to our livelihood and standard of living. </li></ul><...
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Green And Competitive

MBA course project on innovation.

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Green And Competitive

  1. 1. innovation innova innovation Green and Competitive V. S. John Ly
  2. 2. Green and Competitive <ul><li>… ending the stalemate on environmental control and prevention—e.g. air and water pollution, waste reduction, recycling, and renewable energy. </li></ul><ul><li>Opponents of environmental control and prevention: ( Static Thinking ) </li></ul><ul><ul><li>Increases cost of production or service </li></ul></ul><ul><ul><li>Leads to higher consumer prices </li></ul></ul><ul><ul><li>Reduces competitiveness </li></ul></ul><ul><li>Proponents of environmental control and prevention: </li></ul><ul><ul><li>Leads to long-term cost savings </li></ul></ul><ul><ul><li>Decreases pollution and waste </li></ul></ul><ul><ul><li>Improves quality by reducing defects (TQM) </li></ul></ul><ul><ul><li>Promotes innovation in technology </li></ul></ul>1 Porter, M.E., et al. Green and Competitive: Ending the Stalemate . (1995) Harvard Bus Rev . Sept Issue:120-134 1 innova
  3. 3. Advantages of Being Green <ul><li>Pollution & Waste = inefficiency in production process or product design </li></ul><ul><li>… in other words, it is economic waste </li></ul><ul><li>Cost reduction in pollution and waste control (via resource productivity ) </li></ul><ul><ul><li>Expenses in handling, storage, and disposal of waste </li></ul></ul><ul><li>Revenue increase in pollution and waste prevention (via innovation ) </li></ul><ul><ul><li>New markets </li></ul></ul><ul><li>Success stories: </li></ul><ul><ul><li>Improvements in resource productivity – e.g. Dow Chemicals </li></ul></ul><ul><ul><li>Innovation in preventive measures – e.g. 3M </li></ul></ul>1 Porter, M.E., et al. Green and Competitive: Ending the Stalemate . (1995) Harvard Bus Rev . Sept Issue:120-134 1 innova
  4. 4. Process Benefits <ul><li>Materials savings from more complete processing, substitution, reuse, and recycling of production inputs </li></ul><ul><li>Increases in process yields </li></ul><ul><li>Less downtime through careful monitoring and maintenance </li></ul><ul><li>Better utilization of by-products </li></ul><ul><li>Conversion of waste into valuable forms </li></ul><ul><li>Lower energy consumption during production process </li></ul><ul><li>Reduced material storage and handling costs </li></ul><ul><li>Savings from safer working conditions </li></ul><ul><li>Elimination of cost activities involved in discharges or waste handling , transportation , and disposal </li></ul><ul><li>Improvements in the product as a by-product of process changes (e.g. better process control) </li></ul>1 Porter, M.E., et al. Green and Competitive: Ending the Stalemate . (1995) Harvard Bus Rev . Sept Issue:120-134 1 innova
  5. 5. Product Benefits <ul><li>Higher quality , more consistent products </li></ul><ul><li>Lower product costs (e.g. from material substitution) </li></ul><ul><li>Lower packaging costs </li></ul><ul><li>More efficient resource use by products </li></ul><ul><li>Safer products </li></ul><ul><li>Lower net costs of product disposal to customers </li></ul><ul><li>Higher product resale and scrap value </li></ul>1 Porter, M.E., et al. Green and Competitive: Ending the Stalemate . (1995) Harvard Bus Rev . Sept Issue:120-134 1 innova
  6. 6. innova Environmental Regulation <ul><li>Misconceptions of environmental regulation: </li></ul><ul><ul><li>High cost, process downtime, reduced competitiveness </li></ul></ul><ul><li>In reality, however, regulation in… </li></ul><ul><ul><li>Environmental control, such as pollution reduction, decrease cost </li></ul></ul><ul><ul><li>Environmental prevention (through innovative design) improves quality and competitiveness </li></ul></ul><ul><li>Examples: </li></ul><ul><ul><li>Survey of 29 chemical companies identified 181 waste prevention activities, only 1 resulted in a net cost increase 1 </li></ul></ul><ul><ul><li>3M’s P ollution P revention P ays, Chevron’s S ave M oney A nd R educe T oxics, Dow Chemicals’ W aste R eduction A lways P ays 2 </li></ul></ul>1, 2 1 Porter, M.E., et al. Green and Competitive: Ending the Stalemate . (1995) Harvard Bus Rev . Sept Issue:120-134 2 “Save a Pound and save a planet.” (1990) Economist . Vol. 316 Issue 7671, Special Section pp. 6-9.
  7. 7. Environmental Regulation 1 1 Porter, M.E., et al. Green and Competitive: Ending the Stalemate . (1995) Harvard Bus Rev . Sept Issue:120-134 innova
  8. 8. Environmental Regulation 1 1 Porter, M.E., et al. Green and Competitive: Ending the Stalemate . (1995) Harvard Bus Rev . Sept Issue:120-134 innova
  9. 9. The Dutch Flower Industry <ul><li>Problem </li></ul><ul><ul><li>Pesticides, herbicides, and fertilizers were leeching into groundwater </li></ul></ul><ul><li>Innovation </li></ul><ul><ul><li>Grow flowers in rock wool platforms, not soil </li></ul></ul><ul><ul><li>Water recirculation </li></ul></ul><ul><li>Benefits </li></ul><ul><ul><li>Lowered need for pesticides and fertilizers </li></ul></ul><ul><ul><li>Handling cost </li></ul></ul><ul><ul><li>Product variation, improved quality </li></ul></ul>1 1 Porter, M.E., et al. Green and Competitive: Ending the Stalemate . (1995) Harvard Bus Rev . Sept Issue:120-134 innova
  10. 10. Do We Still Need Regulations? <ul><li>Necessary to create pressure and encourage companies to innovate </li></ul><ul><li>Improve environmental quality </li></ul><ul><li>Alert and educate companies about resource inefficiencies </li></ul><ul><li>To level the playing field during the transition period </li></ul><ul><li>Barriers to change are numerous – culture , arbitration </li></ul><ul><li>Good regulation is needed to create a maximum opportunity to innovate </li></ul><ul><li>Bad regulation focuses on cleanup and not prevention </li></ul><ul><li>The current system discourages risk and experimentation </li></ul>1 Porter, M.E., et al. Green and Competitive: Ending the Stalemate . (1995) Harvard Bus Rev . Sept Issue:120-134 1 innova
  11. 11. innova 3 West, L. “Should the United States Ratify the Kyoto Protocol?” About: Environmental Issues. http://environment.about.com/od/kyotoprotocol/i/kyotoprotocol.htm The Future of Regulations - Kyoto Protocol <ul><li>Signed by 180 nations on December 1997 </li></ul><ul><li>Goal: cut emission of greenhouse gasses from 2008-2012 by 5.2% below the 1992 levels </li></ul><ul><li>U.S. refused to sign = biggest contributor of green house gasses </li></ul><ul><li>Lead to US economic losses of $400 billion and 4.9 million jobs </li></ul><ul><li>Arguments against: purely political, no scientific justifications </li></ul>3
  12. 12. innova 1 Porter, M.E., et al. Green and Competitive: Ending the Stalemate . (1995) Harvard Bus Rev . Sept Issue:120-134 4 Gartner, J. “Automakers Give Biodiesel a Boost.” Wired News, Sep. 23, 2004. http://www.wired.com/news/autotech/1,65054-0.html US Automotive Industry <ul><li>Innovate or face extinction 1 </li></ul><ul><li>Chose to fight regulations - US Clean Air Act in 1990 </li></ul><ul><ul><li>less emission and better fuel efficiency </li></ul></ul><ul><li>Early Movers = Japanese and German automakers 1 </li></ul><ul><ul><li>Honda and Toyota popularized use of Hybrids </li></ul></ul><ul><ul><li>VW introduced diesel Jetta </li></ul></ul><ul><li>Different fuel alternatives: Ethanol, Fuel Cell, Diesel, Biodiesel </li></ul><ul><li>Increase popularity of biodiesel 4 : </li></ul><ul><ul><li>Consumption grew from 15M gallons (2002) to 25M gallons (2003) </li></ul></ul>1, 4
  13. 13. 6 Design e2: The Green Apple . (2006) PBS . Accessed on Dec 10, 2006, http://www.pbs.org/designe2/ Design: e2 <ul><li>Buildings </li></ul><ul><li>40% of world’s energy </li></ul><ul><li>50% of greenhouse gases </li></ul><ul><li>25% of landfills </li></ul><ul><li>Innovations and benefits: Bank of America, NY </li></ul><ul><li>Building material </li></ul><ul><ul><li>Use of frit (ceramic dots) in glass windows </li></ul></ul><ul><ul><li>Mixture of glass furnace slag + concrete </li></ul></ul><ul><li>Water reclamation system </li></ul><ul><ul><li>50% water conservation </li></ul></ul><ul><ul><li>5 yr payback </li></ul></ul><ul><li>Air filtration and recirculation </li></ul><ul><ul><li>95% of particulate air </li></ul></ul>6 innova
  14. 14. Design: e2 <ul><li>Boston tunnel project: The Big Dig </li></ul><ul><li>Cost of $14.6B to improve transportation and extend open space </li></ul><ul><li>Waste from buildings, bridges, roadways </li></ul><ul><ul><li>20,000 tons of concrete </li></ul></ul><ul><ul><li>38,000 tons of steel </li></ul></ul><ul><li>Innovations and benefits: </li></ul><ul><li>“ Adaptive reuse” of Big Dig waste material </li></ul><ul><li>Concrete slabs and exterior beams </li></ul><ul><ul><li>Cost savings in material </li></ul></ul><ul><li>Water reclamation system </li></ul>6 Design e2: Gray to Green . (2006) PBS . Accessed on Dec 10, 2006, http://www.pbs.org/designe2/ 6 innova
  15. 15. Concluding Remarks <ul><li>Taking care of the environment is crucial to our livelihood and standard of living. </li></ul><ul><li>Companies should, and are beginning to, realize that environmental regulations promote resource productivity and innovation , resulting in reduced costs and improved quality . </li></ul><ul><li>Managers should continually improve processes and product development that preserve the environment . </li></ul><ul><li>Governments should pass “ good” regulations which promote innovation. </li></ul><ul><li>Paradigm shift : be more environmentally conscious. </li></ul>innova

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