The Rapid Response Institute

Tag: economy

  • Innovation: The Key to the Global Future

    Innovation: The Key to the Global Future

    Henry Ford, the Founder of Ford Motor Company is famously attributed to this statement.  “If I had asked people what they wanted, they would have said faster horses.”  In other words, most of us think linearly.

    One wonders if this line of reasoning is the best way during the current situation.  Perhaps, non-linear mindsets are more appropriate.

    Challenges

    Currently, many define an existential threat as Climate Change.  Additionally, the global economy, the War in Ukraine, bad actors and other ills make the daily news.  We are also told the time is of the essence.  However, it appears the window will close before the appropriate linear responses can come online.

    As the pandemic unfolded in early 2020, we penned a piece on the role innovation would play addressing the global scourge. We put forth some points we believed salient at the time such as:

    • The rise of remote work
    • The ability to scale quickly, i.e., vaccines, ventilators, et. al.
    • Changes in Clinical Trial protocols

    From the same blog, this pundit has long advocated that, “the use of knowledge enabled by technology can reduce project cycle time dramatically.  It can also significantly reduce project cost as well.”

    As we look back on that period, the collective global ‘we’ accomplished a lot.  A plethora of useful materials were developed and published by all manner Subject Matter Experts (SME) as well as those with ‘life knowledge.’  We chose to capture and repost materials (Covid-19 Business Continuity Resources) that could of use to those business executives struggling with work force issues.  These materials remain available.

    Regrettable, the term SCIENCE was terribly misused, including by medical professionals and professional scientists, all of whom should have known better.  This discussion is further developed in our blog, They Blinded Me with Science.   For interested readers, the piece develops the concepts of science and pseudo-science as well as a brief methodology all can use to help them assess what they are being told about major issues.

    Actual Science has moved humanity out of the caves and into our modern world.  Likely, it can help us address current and future global challenges.  The proven innovative use of the Scientific Method is one path forward.

    SpaceX – NASA

    Elon Musk is in the news for a number of reasons.  He is perhaps one of the best know billionaires.  In the opinion of this pundit, the partnership between his company SpaceX and NASA appears to be one of the most productive Public-Private Partnerships (PPP).  Perhaps this good or best practice could be emulated by others seeking new ways to innovate.

    Realistic Energy Transition

    Energy Transition is all the rage with all manner or organization jumping on board.  Somewhat reminds me of the late 1990s dot.com era.  According to Wikipedia, after the ensuring bust, “the NASDAQ-100 had dropped to 1,114, down 78% from its peak.”  Makes one wonder that this might not be the first rodeo for the latest ‘change the world shinny object.’

    Previously, we noted that the replacement of a major highway ramp in Houston, TX USA is slated to take two years.  Additionally, according to McKinsey, “The goal is to install 500,000 public chargers—publicly accessible charging stations compatible with all vehicles and technologies—nationwide by 2030.”  Message: infrastructure development takes a certain amount of time.

    Also from McKinsey, “Capital spending on physical assets for energy and land-use systems in the net-zero transition between 2021 and 2050 would amount to about $275 trillion, or $9.2 trillion per year on average, an annual increase of as much as $3.5 trillion from today.  To put this increase in comparative terms, the $3.5 trillion is approximately equivalent, in 2020, to half of global corporate profits, one-quarter of total tax revenue, and 7 percent of household spending.”

    As of this writing the global stock markets appear to be in freefall.  Some believe, including this author that a Recession is imminent.  This begs the obvious.  How will this linear effort be paid for and what will be the return on this huge investment?

    There must be a better way.

    Innovate, Innovate, Innovate

    In his recent book, False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet noted climate change advocate, Bjorn Lomborg expresses concern regarding linear type scenarios and investments being made reduces climate change to Net Zero.

    He argues that regardless of efforts made such as described herein, we will not defeat global warming.  The temperature will rise anyway.

    If this is the case, then the ROI from a $275 trillion dollar commitment may in fact be negative.  This might spell economic disaster at a sustained level.

    Lomborg makes the case that innovation is key.  His perspective seems to be more on university led research supported by governments.  There is a role for government to fun basic research and many have for decades.

    Entrepreneurs have been advancing humankind for hundreds of years.  With proper market signals, we can expect a new generation to rise to the occasion addressing the energy transition and ultimately climate change.

    The author is aware of a number of ‘Green’ efforts underway to encourage the development of new commercial technologies.  While not advocating for investment in an Incubator or Accelerator, it seems reasonable that start-up organizations addressing these challenges be encouraged.

    What Role Does Innovation Play in Your Firm’s Approach to Climate Change?.

    For More Information

    Please note, RRI does not endorse or advocate the links to any third-party materials herein.  They are provided for education and entertainment only.

    The author’s credentials in this field are available on his LinkedIn page.

    Disclaimer, the author has no personal or business relationship with Bjorn Lomborg or his publications other than reading and commenting on his latest book, False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet.

    For those start-up firms addressing energy challenges, the author is a member of Global Energy Mentors which provide no-cost mentoring services from energy experts.  If interested, check it out and give us a shout.

    For more information on Cross Cultural Engagement, check out our Cross Cultural Serious Game.  You can contact this author as well.

     

     

  • Beware The Guns of March?

    Beware The Guns of March?

    Readers know that as of this writing there is geopolitical and military tension in eastern Europe.  Hopefully, the situation will resolve peacefully.

    This piece is not about those politics.  Rather it is about the potential for accidental engagement and how that risk can be mitigated.

    President Kennedy is famously cited for the comment that referred to the origin of the War to End All Wars, “Perhaps the greatest contribution historians have made to humanity, at least as historians sometimes tell it, came during the Cuban Missile Crisis when Barbara Tuchman’s book, The Guns of August, saved the world from nuclear war.  The book is Tuchman’s narrative of the origins of the First World War, an account that, in President John F. Kennedy’s reading, showed how miscalculation and inflexible military planning could force great powers into catastrophic conflicts against their leaders’ wishes.”  We might add, against the wishes of the populations that must endure the unbearable cost of stupid interventions.  As noted by Herbert Hoover.

    “Older men declare war. But it is the youth that must fight and die.”

    While the Cuban Missile Crisis worked out well for both parties, including the world in general, it was not necessarily a given.  Miscalculations such as the US lack of knowledge regarding nuclear weapons onboard Soviet submarines or the ‘launch’ upon the invasion of the island of Cuba order could have been disastrous.

    Misunderstanding during the 1983 military exercise Able Archer is another example of a near nuclear catastrophe.  And then there all the Broken Arrows,  nuclear weapon incidents (that we know of).

    Complex Systems’ Behaviors

    This blog series has commented on complex interconnected systems a number of times.  The  Risk Profile is dramatically increased in such systems.  Geopolitical and military systems must be viewed through this lens as well.  However, we know complex systems can be properly managed and thus reduce the likelihood of major global impact events.

    This process is grounded in High Reliability Management (HRM).  Wikipedia defines, “A high reliability organization (HRO) is an organization that has succeeded in avoiding catastrophes in an environment where normal accidents can be expected due to risk factors and complexity.

    This author believes that geopolitical and military complex systems can benefit from this model.  Given that the cost of these type failures is incalculable they certainty fits HRM profile.

    Folly Revisited

    In the 1930s Brinksmanship did not end well.  Following historical patterns, especially from World War I, Europe plunged into the abyss for the second time in two decades.  Miscalculations on the side of multiple parties in both conflicts let to unthinkable destruction and loss of life.

    Today’s militaries are much more powerful than ever.  Hopefully, from Shakespeare, “Beware the ides of March” does not portend this year.

    Geopolitical miscalculations, brinksmanship and other aggressive negotiations can go badly.  This is especially the case when adversaries are not in direct and frequent communication with all parties.

    Even then cultural differences put discussions at risk.  Temperance, communication and though is what saves the world from the unthinkable.  Hopefully, cooler heads will continue to prevail during the current crisis.

    Cross Cultural Negotiation

    The importance of cross cultural understanding cannot be overstated as geopolitics and businesses deal with complex, multi-faceted issues across many nations, ethnicities and cultures.  Old international negotiation models are no longer relevant.

    Behavioral Economics is foremost today.  All parties dealt with are by definition diverse.  They are composed of different genders, ethnicities and ages etc.  This is a more accurate model that reflects the reality of organizations today.

    Also, keep in mind that no nation is homogeneous.  Each is composed of separate regions, cities, with local backgrounds, cultures and more.  So when one talks about two or more geopolitical entities to be at odds over an issue(s), that model is too simplistic and can lead to greater risks as described earlier.

    These are more contributing factors for misunderstanding and miscalculation.  Most of us never ‘step in the other’s shoes.’  However, we can recognize the differences in perspectives, behavior and cultures.

    Changing the Playing Field

    We have often discussed the Relationships, Behaviors and Conditions (RBC) construct among economic actors.  The model argues that new Conditions or Situations and Behaviors change the Relationship among parties.  This applies at all levels of human interactions from two individuals to many nations.  It is applicable here as knowledge to help diffuse difficult situations.  For an in-depth review of the model, check the linked blog.

    No Guns this Time?

    The cascading events following the assassination of the Austrian, Archduke Franz Ferdinand by a small terrorist group is widely believed to have led to the beginning of World War I.  The sceptic must put forth, “you have got to be kidding me.”  Yet, it did happen.

    Our point here is that it does not take much to launch the horrible.  How many American doughboys died for that nonsense?  It can happen again and most likely will at some point given human nature.

    Business Contingency

    Geopolitical risk has always been one component of an organization’s risk profile.  What will be the impact on your business if the unthinkable happens in Europe again?  Other risk mitigation tools include social media.

    In 2013 we published ” Mitigating Operational Risk Using the Power of Social Media” that identified a methodology to better understand the beliefs and behaviors of local populations.  From the footnoted piece, “Large global enterprises can augment existing security and risk management with the same solutions used by the government entities in the defense sector at commercial price points.  The real question is not why, but why not?”

    Since that time, there have been significant advances in these capabilities.  Other readily available tools can assist as well.  Use inexpensive technology to protect global stakeholder interests.

    How Robust is Your Firm’s Contingency Plans for Geopolitical Uncertainties?

    For More Information

    Please note, RRI does not endorse or advocate the links to any third-party materials.  They are provided for education and entertainment only.

    For more information on Cross Cultural Engagement, check out our Cross Cultural Serious Game.  You can contact this author as well.

    Footnote

    Kuiper, Marcus A. and Shemwell, Scott M. (2013, February). Mitigating Operational Risk Using the Power of Social Media. Petroleum Africa Magazine. pp. 28-31.