Pressures to Decarbonize Poised to Create Business and Employment Opportunities

Clean technologies are disrupting the status quo driven by private innovation and public intervention. As public concern about climate change rises, pressure mounts on policy makers to take actions to drive clean technologies that do not emit greenhouse gases. Consumers are making more eco-conscious choices and are demanding green alternatives. Novel clean products and services are emerging, paving the way for new companies to compete and disrupt established players. Incumbents, as a result, are reinventing themselves to stay competitive. Companies are revisiting their business plans and investment portfolios in response to public pressure and private opportunities to be more sustainable.

To some this may look like chaos, but with disruption comes opportunity. The emerging green economy is posed to be a growth enterprise, creating new jobs and new business opportunities. If you are looking for work, these are the likely jobs of the future. This should not be surprising. Market economies have always been marked by their ability to create what economist Joseph Schumpeter referred to as the “gales of creative destruction.” The clean tech revolution is just the next in a line of major innovation epochs stretching back centuries from the steam engine to the automobile to digital computing.

book-decarbonization-imperativeIn our book, The Decarbonization Imperative: Transforming the Global Economy by 2050, we explore the potential for clean technology disruption within five industry sectors: energy, transportation, industrials, buildings, and agriculture. While it looks slightly different for each sector, there are some common markers for disruption. New technologies may perform worse on various dimensions of merit at first, but their rate of improvement can foretell a new future. The entry of intrepid entrepreneurs and diversifying players from adjacent industries can further signal that disruption may be imminent. In our book, we assess the current state of disruption by looking at these markers and make predictions on where these sectors are likely heading.

The most advanced disruption is happening in the energy and transportation sectors. In the US, renewables are the fastest growing source of new electricity generation and battery electric vehicles (BEVs) are now offered by every major car company. With the new infrastructure bill providing funding for grid modernization and more BEV charging stations, we can expect growth to continue. These two sectors are creating new jobs in solar and wind installation, battery manufacturing, systems engineering, and urban planning, among many others. Supporting industries, as well as some brand-new industries, will need employees to support these emerging clean technologies. As but one example, there is a grid edge revolution happening, bringing technology solutions to market in support of a modernized electrical grid.

Additional opportunities will likely exist in the broad industrials sector including manufacturing and raw materials. While products like steel, petrochemicals, and cement are less talked about when discussing climate change, industrials represent nearly a quarter of global carbon emissions. Public pressure to innovate green alternatives is increasing, making them prime for clean technology investment in novel technologies, new chemistries, and greener materials. Some promising alternatives include green cement, green hydrogen, and structural timber. We are in an era of ferment where there is a lot of experimentation and exploration for clean alternatives. With each promising alternative, new businesses and jobs are being created. Not all will last, but for winning technologies, huge economic opportunities await.

In the built environment, an emphasis on energy efficiency has helped slow building energy consumption for decades. Yet, to decarbonize the sector, buildings will need to be completely electrified, eliminating the use of fossil fuels for heating and cooking. In the US this largely means retrofits, which are costly and complicated due to different ownership and leasing structures. Changes to local and national building codes and regulations are allowing for alternatives. Green financing and bonds are critical drivers to get projects funded and are emerging as a new growth opportunity. At every step of the value chain, opportunities are being created for new businesses and jobs that help to deliver green solutions to meet pressure to decarbonize.

Agriculture faces perhaps the most daunting decarbonization challenge of all the sectors: how do you ramp up production over the next 30 years to feed potentially two billion more people around the world, and do so sustainably? In the US, consumers are taking notice and asking for greater transparency in where their food comes from, putting pressure on suppliers to think about their environmental impacts. Dairy and meat alternatives are experiencing incredible growth in the US and sustainable alternatives are showing up on restaurant menus. Large agriculture companies are being pressured to find more efficient and precise ways to manage herds and produce food to reduce their impact. The transformation of this industry is in its infancy, but innovation is happening at a fast clip. So-called “AgTech” is one of the hottest areas in this space creating a well-spring of new ventures looking to grow and to acquire talent.

The opportunities to contribute to this clean technology revolution are many. You don’t have to be a sustainability expert to apply. Established companies today recognize the pressures to reduce their carbon footprint. New entrepreneurial ventures are arising every day with novel solutions to meet the demands for sustainability while promising to disrupt the status quo. All are looking for talented individuals to help drive the innovation and diffusion of new products, services, and business models. The clean technology future is bright for those looking for the next great challenge and opportunity.

Michael Lenox & Rebecca Duff

Michael Lenox & Rebecca Duff

Michael Lenox is the Tayloe Murphy Professor of Business Administration and Senior Associate Dean and Chief Strategy Officer at the University of Virginia's Darden School of Business and co-author of The Decarbonization Imperative and Can Business Save the Earth? His work has been cited by the New York Times, the Financial Times, and the Economist. He has been recognized as a Faculty Pioneer by the Aspen Institute, as the top strategy professor under 40 by the Strategic Management Society, and one of the top 40 business professors under 40 by Poets & Quants.

Rebecca Duff is Senior Research Associate at the Batten Institute for Entrepreneurship and Innovation at the University of Virginia's Darden School of Business. She also serves as the managing director for the Institute's Business Innovation and Climate Change Initiative.

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