What Sustainable Innovation Might Look Like in 2021 To tackle some of the biggest challenges we face today, like climate and health, we'll need to fundamentally rethink our approach to innovation.
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur Europe, an international franchise of Entrepreneur Media.
The saying "hindsight is 20/20" will take on a new meaning following this year. Without doubt, we are collectively facing some of the biggest challenges the world has seen. The pandemic's second wave is taking lives and livelihoods across Europe, healthcare systems are collapsing under the strain, and the destructive effects of climate change are being felt across our planet.
There is reason for optimism though: The speed in which a series of promising Covid vaccines have emerged shows what can be achieved when organisations across the globe put their collective weight behind a shared mission. But if we seek to return to how life was before, we have failed not just future generations, but those living today, too.
As we move toward 2021 we are at a crossroads, and if we don't act now, it might be too late to solve the health and climate emergencies we face. We need to deliver impactful, sustainable, and meaningful innovations. Without them, we will soon run out of road. But what does sustainable innovation look like in 2021 and beyond?
People are increasingly looking to entrepreneurs to drive the changes the planet needs. Two-thirds of researchers and academics believe tech entrepreneurs will make a bigger contribution to solving social challenges in the years to come than governments in Europe, according to Atomico's State of European Tech report.
That's a huge responsibility. But passion, drive, and creativity alone are not enough to make this a reality. To tackle these challenges we need to fundamentally rethink approaches to innovation, business models, and the relationship between entrepreneurs and corporate organizations.
Time and time again, startups and entrepreneurs come undone when they try to scale up their transformative ideas into a sustainable and impactful business model. Why? Because they lack the necessary muscle (in terms of finance and resources) and networks (to navigate legislative and regulatory requirements).
Corporate enterprises have a lot of the ingredients necessary to drive innovation and deliver real impact. They have the assets, resources, and networks. But they often have the wrong corporate governance structure in place, limited board involvement in the innovation process and are missing the talent needed to not just conceive, but to execute and scale digital business ideas successfully as well.
Too often, corporate resources are focussed on tools to create innovation, like incubators and accelerators. These are fine for driving new value through product and service innovation, but do not deliver the transformative change and new business models that are needed in 2021 and beyond.
To achieve this, we need to shift our collective thinking on to which investment types create the right framework for innovations to scale and become sustainable. The true transformative power lies in moving beyond building new products and services, and towards creating new sustainable, impactful and digital business models. It is only by changing the way we innovate that we can begin to tackle the major issues of climate and health.
Corporate Venture Building: A potent solution.
That's why in 2021, we will see corporations increasingly team up with top entrepreneurs to collaborate and drive a new wave of sustainable innovation. This approach, which enables both parties to harness their relative strengths and create new digital business models is called Corporate Venture Building (CVB).
CVB is a new asset class, designed to tackle the problems that occur in highly regulated and complex markets like health or climate. It helps corporations to effectively rethink and redeploy existing assets and capabilities to fundamentally transform its business model and create long-lasting, positive and impactful change.
That is what CleanTech startup Solytic set out to achieve when it was co-created and scaled together with Swedish multinational energy giant, Vattenfall, using the CVB approach. Solytic puts an end to the waste caused by the inefficiency of solar PV systems and maximizes its overall performance, by combining unused resources with the needs of service providers.
By identifying and eliminating sources of error and optimizing utilization, Solytic increases the efficiency of solar PV systems by up to 30 percent. The benefit it delivers means within two years of its creation, the startup has expanded into 60 countries and has connected over 100,000 solar plants to its AI monitoring platform.
Solytic has only been able to achieve this scale and impact within the highly regulated energy industry, because it used the CVB model and drew on the resources and knowhow that Vattenfall has been able to provide. Moreover, it has demonstrated that by rethinking innovation and combining the entrepreneurial spirit with the resources and existing assets of an established corporation, creating new digital business models that have a real impact is possible.
For many people, and many reasons, 2020 has been a year to forget. But it's important we learn from this shared experience, and recognise what can be achieved when we embrace digital technologies and collaborate effectively. In the whole of human history there has never been a more urgent need for sustainable innovation, and by changing our mindset and approach, we can deliver it in 2021, and beyond.