We chatted about this question briefly with Dr. Carlos Härtel, who was visiting Helsinki to talk at the Battle for the Future seminar at Futurice’s 20th-anniversary party.
The current discourse on sustainability tends to be dominated by disruption. People are looking for radical, new solutions to old, wicked problems. You’re coming at the problem of sustainability from a different perspective. Can you tell us a little about it?
In my opinion, we can’t really talk about sustainability without talking about waste. It’s a key issue on all levels - from individual actions to the more important question of systemic change.
If we are to really change the way our societies operate, it has to be palatable. People need to have confidence that the things they are changing in their lives are beneficial and also understand the limits and scope of the impact. On the organizational level, especially in the world of business, it’s easier to get something done when you can say, “this is good for the environment and it will also be good for your bottom line”. There is huge profit potential in tackling waste - in addition to all the other good things that come from cutting down on it.
When you talk about waste, you’re talking about a very particular kind of waste, right?
Yes. Most of the time when we think about waste, we think about the domestic waste we encounter in our everyday lives. A lot of this waste is tied to packaging and is in some sense “intended”; you just can’t have canned tomatoes without cans. This waste should be dealt with through recycling and other mechanisms.
But this is not what I like to talk about.
I’m interested in the unintended and avoidable waste that most often happens out of our sight earlier in the value chain, during production, transport, processing, storage, and delivery. There’s massive potential in this area for going from waste to value.
So, it’s a question of evolutionary improvement, rather than revolutionary?
Yes, but the potential for change is massive in this area. You can call the approach gradual or evolutionary, but the results are revolutionary.
Let’s look at agriculture - obviously a very important industry and one with a massive impact on the world. A full one-third of agricultural produce is lost or wasted. So, to put it bluntly, we really already hold the key to solving world hunger. We just need to eliminate waste.
Obviously, many of these problems have been with us for thousands of years - almost as long as agriculture itself - but we are now in a unique position to try and solve some of them thanks to the development of digital technologies. In agriculture, we can cut loss and waste throughout the value chain, using methods like precision farming or apps for shelf-life management.
The same rings true to varying degrees in every other industry, too.
How does digital help us eliminate unintended waste?
In so many ways! Take additive manufacturing, or as some people call it, 3D printing, for example. As long as we’ve made things, we’ve wasted a part of the raw materials used. Machining of metal blocks to produce complex shaped components is a typical example. In the industrial age, we’ve seen a lot of waste in raw materials we labouriously dig out of the ground, some of which are finite. Additive manufacturing can steer us towards a world where very little value is lost between raw inputs and the output. It’s good for the environment and for business.
In energy generation, distribution, and consumption, making the move from today’s “dumb” grids to smart digital ones enabled by the Industrial Internet of Things (IIoT) will make a huge difference and the change is already happening.
Lack of information is one of the drivers of inefficiency in all industries and waste is everywhere, from procurement to operations to delivery. Digital has the potential to help in all.
We are only starting to scratch the surface in these areas, but I’m already quite optimistic. The thought that we can have a huge impact just by doing a lot better what we already do is comforting. Major improvements in industrial efficiency and productivity are within reach, we don’t need to wait for radical new solutions.
Dr. Carlos Härtel is an independent strategy advisor to private-equity firms and operating companies, including Futurice, and holds a number of board assignments with universities and international organizations. His operational career in industry spans two decades in a variety of leadership roles, including CTO & Chief Innovation Officer for GE Europe and previously as President & CEO for GE Germany.
For more information about what we see in the future for the industrial sector, please download our point-of-view The Decade of Industrial Business Transformation.