Why do sustainable technologies often struggle to succeed commercially?

Sustainable development innovations usually aim at improved environmental or social performance, for example improving the social welfare of small farmers. In his guest lecture at Aalto Sustainability Hub, Professor Jeremy Hall explained why not all sustainable development technologies succeed commercially despite their good purpose.

”Scientists in corporations, universities, and governmental institutes are making great strides in developing more sustainable technologies.  However, the commercialization of these technologies often meets unanticipated hurdles”, Professor Hall explains. “Long regulatory approval processes are a typical challenge. Such processes have complicated for example the introduction of a transgenic cotton variety being developed by Embrapa, a research corporation owned by the Brazilian state, even though this variety may be more resistant to plant diseases and pests, and suitable for farmers in drought stricken areas.” 

As a result, it may be that only big multinational corporations with sufficient resources can commercialize such technologies, given that they have the expertise and resources required for regulatory approval.  However, such companies are often hesitant to develop technologies unless they see the potential for a return on their investment, which is often unclear for sustainable technologies that for example cater to widely dispersed impoverished farmers. 

Multidisciplinary approach helps tackle regulatory hurdles and find new opportunities

Paradoxically, while high regulatory barriers have helped for example prevent widespread environmental impacts from transgenic technologies, it has also created high barriers to entry and left many promising sustainable technologies on the shelf. As one solution, Professor Hall emphasizes the importance of early co-operation between experts from different fields.

“If chemists discuss with for example business experts from the beginning, many of the technological, commercial, organizational, and societal hurdles for commercialization can be taken into consideration and tackled early.  Conversely, a multidisciplinary search at the early phases of technology development may identify opportunities that may otherwise be overlooked. Therefore, it’s excellent to hear that Aalto University promotes the co-operation between different disciplines, for example by bringing all its scientific fields to the same campus.”

Professor Hall is the Director of the new Centre for Social Innovation Management and Chaired Professor of Social Innovation at the Surrey Business School, University of Surrey, UK. His research and teaching interests include the social impacts of innovation and entrepreneurship, sustainable supply chains, social inclusion, strategies for sustainable development innovation and responsible management.  Professor Hall was invited to give the guest lecture at Aalto Sustainability Hub by Professor of Sustainability Management Minna Halme.

More information:

Professor Minna Halme
School of Business, Department of Management Studies
Aalto Sustainability Hub

minna.halme@aalto.fi

+358 40 353 8251