Accelerating Clean Energy Innovation
Bringing a new energy technology to market at scale requires, but often confuses, these three critical processes, each of which requires a differing set of skills and rewards a different set of characteristics.
1. “Intentional Invention” – is the toughest part; developing new solutions to very specific problems, often in a compressed time frame. This is quite different from “accidental” invention. This process, while essential, rarely produces attractive IRRs for investors, which is why much of it occurs in university and national laboratory settings. Most of what the venture community really does is to finance the innovation that follows the key inventive step.
2. “Insightful Innovation” is what Silicon Valley does really well. It is the process of using a critical insight combined with entrepreneurial skills to create, scale and commercialize products consumers want. It tends to be a deterministic process focused on build it, test it and fix it and functions best in a “divergent competition” world where there can be many winners. Also works better for software and business model innovation than hardware innovation.
3. “Rapid Incremental Improvement” is innovation at scale. It is what big companies do well but is also the core of contract manufacturing as practiced by Flextronics, Foxconn, et al and has been a big part of the growth the Chinese economy. It tends to be a process where the availability of capital, core technology skills, manufacturing capabilities and access to supply chain all play a big role. Particularly in energy, the role of this part of the ecosystem has been underestimated by the innovation ecosystem.