Real Progress Comes from Deployment, Not Just Innovation
Author: Ben Silton
The world is climbing the steep hill that is the energy transition with more and more urgency every year, and political leaders – including the Biden administration – are devoting unprecedented resources towards the development and demonstration of newer and cleaner infrastructure technologies. In this blog post, we explore human evolution as an analogy for why urgent deployment – and not just innovation – is paramount to our long-term success.
(Author’s note: Be warned and please forgive yet another biological analogy. They just tend to make sense!)
Our current understanding of the mechanics of human evolution revolves around natural selection. Random DNA mutations over millions of years resulted in either advantageous characteristics – increasing one’s chances of survival and reproduction – or disadvantageous characteristics, resulting in premature death or otherwise limited desirability in the eyes of potential mates.
However, genetic mutations in and of themselves were not responsible for the increased survival rates, life expectancy, or reproducibility that vaulted us up Earth’s food chain. Instead, it was actually the use and mastery of these mutated conditions to our advantage that truly accelerated survivability and reproducibility.
Take, for example, opposable thumbs. The first beings with opposable thumbs could easily have continued to live their lives without any advantage, had they neglected to learn how to apply the novel appendages towards gathering food and handling objects and besting predators. Thankfully, digits that evolved into opposable thumbs accelerated our development because we figured out how to use them to our advantage, and over time we became dependent on activities and customs that required thumbs such as the use of tools and eventually agriculture.
Let’s consider technological innovations as technological “mutations” – much like human mutations, only non-random and on a much more accelerated time scale. For example, the Covid-19 vaccine is a new “mutation” of technology we didn’t have before but now lies within our collective human arsenal.
It feels obvious and trivial to say that the Covid-19 vaccine would be worthless if we couldn’t deploy it. But there is a profound principle behind the fact that technological progress is not just limited by discovery but by deployment. In other words, innovation is only valuable to the extent and scale at which we apply it to our own advantage.
We never hear about the exciting discoveries that were made and lost because they were never deployed. But history is full of important discoveries that came before we knew how to make sense of them. For example, radio waves were first theorized in 1867 – more than 30 years before radio waves were actually used in commercial applications. In a sense, this innovation was worthless – as it provided literally zero monetary value – for 30 years.
Interestingly, multiple types of solar cells were patented in the US prior to 1900 – but the first solar-powered calculators were not even introduced until 1978. That’s a lot of lost time!
Robert Solow’s classic model of economic growth indicates that long-term economic growth comes from technological growth. His equation lists just three independent variables: labor, capital and technology. If we limit technology, we limit growth – and limiting technology can come in the form of limiting discovery OR limiting deployment.
In what ways do we limit deployment? According to Andrew Herscowitz, Power Africa coordinator at USAID, corruption, mismanagement, and “sluggishness” – or adversity to change – have held back progress in expanding and modernizing sub-Saharan Africa’s power grid. We see these symptoms all over the world, including in the US: while our government is responsible for funding important discoveries (just ask Jonathan Gruber and Simon Johnson), no government is perfect in managing resources and accelerating the deployment of game-changing technologies. (Why aren’t we walking on modular sidewalks yet?!)
We also see deployment stifled by geopolitical interests. Take, for example, our disregard for renewables in favor of nuclear power for essentially the entire late 20th century. This strategy “helped” us in the Cold War effort, but failed to take into account the long-term self-sufficiency benefits of renewables or, for that matter, Small Modular Reactors, which offer benefits of carbon-free nuclear power but without the same level of safety risk.
Or – and not to belabor the point – how about the more recent example of FERC’s Minimum Offer Price Rule (MOPR), an effort that renewables proponents have criticized for protecting fossil fuels in PJM’s territory. (TLDR: new subsidized generation technologies like solar would not be allowed to undercut fossil fuels in PJM’s electricity capacity market.) Politics aside, rules that artificially “re-make” renewables expensive handicap their deployment by disarming the tax incentives and other policies intended to promote their deployment in the first place.
The argument here is fairly obvious – but in a more nuanced sense, innovation and deployment need each other:
- Deployment depends on innovation to bend our economic efficiency curve and promote competition; while
- Innovation depends on deployment to create compounding “pull forces” for – in turn – new innovations.
Throw policy and public incentives in there as non-market forces and you get a complex system of interdependent economic pillars that must both enable and feed off each other continuously. And as deployment grows, economies of scale rise and costs come down, and eventually the snowball rolls itself. So, really, it’s the early stages of deployment where we need to devote the most attention. (If this is your jam, and you have some time on your hands, check out this paper by Jetta Wong and David Hart at ITIF.)
20 years ago, PhD student Frank Geels at the University of Twente in The Netherlands wrote a paper describing Technological Transitions (TT), in which he says “TT do not only involve changes in technology, but also changes in user practices, regulation, industrial networks (supply, production, distribution), infrastructure, and symbolic meaning or culture.” Geels later argues that true technological transitions rely not just on evolving technology itself but on the resulting changes in systems that rely on those technologies. Only through the resulting structural and societal change are innovations truly embedded in – and therefore able to benefit – society at large.
Our problem today is that we’ve underweighted deployment for too long. More than five years ago, leading climate tech voice Jigar Shah made this same argument, asserting that “I am not against innovation, but we don’t need to be telling people that we need it to reach the 2 degrees milestone… What we need is deployment.” (Shah published this article just two years after publishing another call for business model innovation – as opposed to technical innovation – to accelerate the transition to a low-carbon economy.)
Shah is basically saying we’ve done a sufficient job accelerating our “technology mutations” – but we’ve lost focus on actually harnessing them for a real human evolutionary advantage. Instead, in relation to the clean technologies described by Shah, we’ve actively prevented innovations from spreading.
Of course, it’s easy to sit behind a computer and write a blog post about this; putting rubber to road requires coordination among many stakeholder groups and, frankly, lots and lots of grit. But if you belong to one of the following groups, put your two hands on the proverbial rope and add a little pull in the right direction.
|Tech Vendors||Design for scalability from Day 1. Invest in a robust business development framework. Offer limited pilots and staged roll-outs – but with defined schedules and metrics of success. Get your suppliers on your team.|
|Corporations||Complement your R&D investment with sufficiently robust end-to-end strategic support and commercialization planning. Avoid developing deadweight IP – or find a way to let someone else sell it for you.|
|Research Labs||Build a healthy licensing and commercialization program/framework, and build a network of commercial partners. MIT has built what is perhaps the gold standard, launching 25 startups in FY2019 alone. Funding sources will increasingly look for commercialization opportunities.|
|Financiers||No one wants to finance a first failure – but everyone wants their name on the market carver. Invest in – and trust – strong, experienced analysts who don’t overweight emerging technology risk and who do know strong risk-adjusted returns when they see them. Solar deployment made a lot of smart people rich in the last 20 years before the cost of capital came down.|
|Regulators||Technologies with demonstrated public benefit should never have to wait for regulatory support – nor suffer from regulatory uncertainty (think renewables ITC and PTC). Adopt performance-based regulation and phased incentive frameworks. (A great example here? Energy efficiency.)|
|General Public||It’s time to embrace slow money, with longer paybacks but more direct societal benefit. (Slow Money is a farm-focused organization, but their core concept is beautiful and translatable.) Commit some of your retirement portfolio to green bonds or support crowdfunding platforms (like NEIF, or any Kickstarter you care about). And could someone PLEASE build a platform that lets me invest my retirement savings into renewable energy and energy efficiency projects?|
At ADL Ventures, we are laser-focused on deploying innovations, and we accomplish this in several ways. If you’re a large corporation, we can help you monetize your IP by unlocking new revenue streams from outside your organization (see case study here). If you’re a promising hard tech startup, we can provide structural scaffolding and go-to-market support so you can accelerate your path from 0 to 1 (see case study here). And if you’re anything in between, we can apply our combined decades of legacy-sector and startup experience to find ways to optimize your business model, product-market fit, or scaling strategy.