The Future Of Innovation ... Planned And Managed Change

Mr Mats Larsson

 

Global Energy Transformation - Planning and market based change

Planned and managed change is the key to innovation in the future. In Global Energy Transformation I argue that, if the transformation of global energy systems on a large scale is to succeed, market based change needs to be complemented by managed and government financed change. More people from all walks of life need to read "Is War Necessary for Economic Growth?" by the late Economics Professor Vernon W. Ruttan. He argues that large scale and long term projects financed by the government are necessary in order to develop new "general purpose technologies". Professor Ruttan analyzed the development of technologies in six areas: space, aviation, computer, Internet, nuclear and the US type production system, and found that in all these cases government funded projects have been key in the development of technologies. Without government financing development had been slower or it may not have happened at all.

Global oil production will soon reach its peak, much earlier than experts have previously expected. There is a strong correlation between global economic growth and increasing access to energy and there is no ready alternative to oil in the transportation sector. With a reduced supply of oil we will not be able to expand the global economy, in the way that we have done in the past. We will need to run large scale planned projects that will help us develop the technologies, and the large scale systems of society that make it possible for us to reduce our dependence on oil.

Energy, especially large volumes of energy for transportation, will be our key area of technology innovation in the future. But also in other energy areas, we will need to develop new technology on a large scale. Among them are electricity production and distribution, industrial processes, the built environment, agriculture (a very high dependence on oil as a fuel and as a raw material for fertilizers and pesticides) and behaviour and work life change.

As Ruttan argues, large scale planned and government financed projects have been an important feature of innovation in the past, especially in the key areas, upon which we build our key production, distribution and information systems. If we look at other areas than the ones that Ruttan studied, various governments appear as important financiers and customers of new technologies. In research we need to rapidly build competence to understand how government financing has complemented the market in the development of new technologies. We do not need new planned economies or socialism (as in public ownership of resources and a lack of individual incentives to innovate). We need strong and long term financing of large scale planned innovation projects.

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Article © 2009 Mr Mats Larsson. All rights reserved.

about the author...

Mr Mats  Larsson

Mr Mats Larsson

affiliation:   Global Energy Transformation Institute

position:  Director

country:  Sweden

area of interest:  Energy Transformation

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other books and writings by

Mr Mats Larsson

Global Energy Transformaton

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Overcoming Overuse: Energy Transformation for a World Gone Fad

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