Innovating to Drive Change in the Transportation Sector
The movement of people and goods is more critical than ever in today’s interconnected global economy. Whether traveling for work, visiting friends, or using products shipped from another country, we rely on transport to go about our daily lives. However our roads, train stations, ports and airports are busier than ever as populations grow and we increasingly move into cities.
Globally, the transportation sector is expected to continue growing, with a geographic shift of demand and manufacturing to developing economies. But with this growth, environmental concerns are also increasing. Presently, more than 60 percent of the 87 million barrels of oil consumed every day power the world’s transportation sector, and liquid fossil fuels account for 94 percent of the energy supply to the sector.
If the transportation sector is to be successful in reducing its impact and if it is to contribute to the limiting of global warming to less than 2°C, it cannot continue to develop under a business-as-usual scenario.
According to the predictions of the World Business Council Sustainability Development’s Vision 2050 report – which lays out a pathway toward a global population of 9 billion people living well within the resource limits of the planet by 2050 – universal access to low carbon transport is expected by 2050. An 80 percent reduction in energy use by light-duty vehicles is also forecast, along with a 50 percent drop in energy usage within shipping/freight transportation.
These changes will create challenges and opportunities for all those companies operating within the sector. If suppliers are to respond effectively to these trends, they need to focus on bigger, bolder innovations that can substantially improve sustainability and deliver better value for customers.
The transportation sector needs these sustainable solutions. And if companies are to develop them, they need to recruit and retain the very best people – pioneering chemists and engineers; strategists with acute insight into the markets, needs and global trends that will shape our world. Naturally, businesses need to commit to investing the necessary funds to identify and implement these sustainable solutions. At my company, despite challenging economic conditions, we have actually increased our R&D spend in recent years. Over $500 million was invested in research and development last year, two-thirds of which was focused purely on sustainability.
It is also important for companies to recognize when they need to work with others. An “open innovation” approach is being employed increasingly by corporations who realize that they can no longer rely solely on internal resources to maintain a competitive edge.
Businesses need to fully embrace the model of open innovation. Why? Simply because, in a world whose pace is getting faster and faster, it’s difficult, if not impossible, for companies to have all the knowledge, skills and know-how available in-house to take ideas into the marketplace quickly or cost-effectively enough.
Organizations need to work up and down the value chains with others who have complementary capabilities to their own – suppliers with whom they can work to develop more sustainable raw materials; customers and end users who can guide them in their market needs and trends; and universities of course that can help them identify emerging sciences that can be developed into useful technologies.
In summary, incremental improvements will not be enough if we are to successfully tackle the sustainability challenges facing the transportation sector. It is only by delivering radical solutions and developing big and bold innovations that we will be able to drive significant change. Companies that can provide this will ultimately stand to benefit.
André Veneman is corporate director of Sustainability for AkzoNobel.
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