Session 3 (30/8) Reflections

Brief Overview

Session 3 is split into two parts, the first focuses on sustainable industrial development while the second looks at innovation management. As I was on MC and did not attend class, my reflections would focus only on the assigned readings which I found most interesting.

Interesting ideas/observations

Industrial Development

The EU environment fact sheet (Reading 1) on the initiatives employed to ensure sustainable industrial development, demonstrates the systematic and comprehensive approach the EU takes towards reducing the negative impacts of industrialization. The EU is known as a leader in international climate policy and has some of the most innovative, extensive and rigorous environmental regulations. However, for newly industrialized countries such as Vietnam or rapidly growing economies such as China, are such EU-style environmental laws feasible?

Regulations limiting the amount of carbon emissions may be simple to pass but in a huge country like China, enforcing the limits will pose a challenge considering their weak institutions where bribery and corruption is rampant. An EU-style emissions trading scheme would crumble if companies can simply circumvent the emission caps and not face repercussions. Also, the developing country’s government may not be interested in adopting such environmental policies as these regulations impose costs on both the government and the industries which may hamper economic growth.

Perhaps methods such as allowing European companies to invest in emission-saving projects elsewhere to meet their commitments at home is the best way to help developing countries achieve sustainable industrialization through technology transfer. EU’s complex environmental regulations however can serve as a guide to large, developed economies such as the US and Japan.

Reading 3 (Sustainability for Tomorrow’s Consumer) highlights the need for businesses to alter their business model and be open to new ideas and opportunities in order to meet consumer demands despite resource constraints. In particular, I was struck by the point raised in the paper about how the growth of the middle class worldwide would lead to a huge strain on commodities and resources based on historic consumption patterns.

Most discussions on sustainability focus on the point of view of businesses, ways they can change their processes to use resources more efficiently etc. The reading, for example, suggests that to be successful, the consumer industry will need to balance growing consumer demand for sustainable products with demands for convenience and price sensitivity. However, it seems to be taken for granted that it is fine for consumers to carry on with their current consumption habits (the thinking is perhaps along the lines of ‘if they can afford it, why stop them from consuming’).

A quick scan of my room, cluttered with shoes, bags, books, stationery etc, causes me to think that beyond the discussion of sustainable products, perhaps consumption habits in general need to be changed. Consumers in developed countries buy things that they ‘want’ and not necessarily things that they ‘need’. In my opinion, overconsumption is an unhealthy habit that society and its consumers need to kick, but till then perhaps sustainable products is the best way to reduce the impact of overconsumption. 

Technology and Innovation Management

Reading 1 focuses on role of the US government in encouraging and guiding innovation and technological advances. The key idea seems to be that innovation cannot be control or even anticipated but an environment that fosters and supports innovation is more likely to see results. Beyond the policies mentioned in the reading, I feel that a crucial aspect of creating this environment is a strong intellectual property regime. In Singapore, our copyright, patent and industrial design laws confer rights to innovators, which allow them to benefit financially from their innovations thus providing a strong incentive.

The map showing areas of leadership (current and potential) in technology innovation (Reading 2) piqued my interest since it is something new to me. Of the four dimensions of technological capacity used to create the Technological Achievement Index (TAI), the component which measured the diffusion of old innovations (telephones and electricity were used as indicators) came as a surprise. However the explanation that technological advance is a cumulative process and widespread diffusion of older innovations is necessary for adoption of later innovation makes a lot of sense.

Key Take Away Points

• Sustainable development is a real and pressing issue which involves companies, consumers and governments.
• The government plays a big role in both sustainable and innovation management. Its policies which restrict certain activities (e.g. pollution) or encourage others (e.g. monetary incentives for research) can have a big impact on the country’s future.  
• Education and human skills are an important aspect which helps to contribute towards innovation.
• Fragmentation is a challenge facing innovation management, cooperation is essential. (Reading 3) 

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