Sustainable technologies can be one of the sources of innovation and wealth creation that reverses the flow of jobs offshore.
Sustainable technologies can be one of the sources of innovation and wealth creation that reverses the flow of jobs offshore. There are many opportunities-most immediately in the energy sector-to roll out new classes of high-value, high-profit products and technologies that will help other businesses run more efficiently and allow us once again to export goods, rather than paychecks. But to succeed, budding eco-preneurs must learn the tough lessons that successful chip makers have mastered to let them compete and flourish in tough commercial markets.
One useful trick we can borrow from the chip industry is the art of embedding one's product deeply within the value chain. As the prices for electronic goods fall or remain flat, chip makers can maintain and even improve profits by grabbing larger chunks of the value chain by offering more functions using fewer, more innovative components. Clever designers are creating chips that absorb functions, add features and eliminate costly external passive components.
Likewise, a good green engineer can put technology to work at the heart of an application and absorb or displace other functions in the value chain. For example, Power Integrations Inc., in developing chip sets for high-efficiency power supplies that meet upcoming Asian and European sub-1-watt standby requirements, still managed to gain a larger share of a flat bill of materials by doing away with costly heat sinks and fans-and, in some cases, transformers.
I'm not clever enough to envision even a fraction of the places the electronics industry will be able to embed green technology deeply into value chains, but other fields offer great examples. Interface Inc., the nation's largest industrial carpet maker, has reengineered its products to be recyclable with a minimum of waste and toxic emissions. By ensuring a low-cost, ready-made stream of feedstock for next-generation carpets, the company has drastically cut material and energy costs. Will any computer or appliance manufacturer be bold enough to spend time studying this concept?
For another excellent example, look at the energy-efficient homes on the market this year. Several developers now offer high-efficiency designs that replace 2 x 4 studs with more expensive 2 x 6s in the walls to allow room for R-30 insulation instead of the usual R-19. The wider beams and higher-grade insulation material are priced higher than their lower-grade equivalents; but with the stronger 2 x 6s, spacing between the studs can increase from 16 to 24 inches, saving enough money by some estimates to pay for the wider framing as well as the better insulation. And the resultant reduction in HVAC system requirements for the building will save even more.
The rising energy and materials costs expected in the next decade will give innovators opportunities for eco-smart products and technologies. From the polymer-based photovoltaic roofing materials under development at STMicroelectronics to the hybrid electric cars offered by Ford, Honda and Toyota, we're just beginning to learn how to create savings for others and profit for ourselves.
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