The best (green) ideas money can buy

I’ve got a story, headlined The Best Ideas Money Can Buy, in the summer issue of Conservation Magazine, an excellent little magazine published by the University of Washington. It’s about prizes, and they power to drive environmental innovation. As you’ve probably noticed, governments, nonprofits and companies have all experimented with the idea of using prizes to solve big and small environmental problems.

Kathryn Kohm, who edits the magazine, asked me to look into the effectiveness of crowd-sourcing sustainability solutions. I talked to Peter Diamandis of the X-Prize Foundation, Mark Vachon of GE, Beth Trask of the Environmental Defense Fund and others, including Karim Lakhani, a faculty member at Harvard Business School who studies open innovation.

Here’s how the story begins:

The ceremony had all the pomp of the Oscars, minus the gowns. Musical fanfares greeted each presenter. Politicians delivered windy speeches. A global audience watched live (and a prime-time special followed on The Discovery Channel) as the winners of the Progressive Automotive X Prize were announced on September 16, 2010, in Washington, D.C.

The $5 million grand prize went to a startup company called Edison2, whose founder, Oliver Kuttner, had assembled a team of professional motor-racing engineers to rethink the fundamentals of the automobile. Their winning entry, aptly named The Very Light Car, weighs just 830 pounds, travels 100.3 miles on a gallon of gas, and represents a radical departure from any other car on the road today. “That’s what this competition is all about: advancing the science behind automotive technology to create revolutionary change,” declared Glenn Renwick, chief executive of Progressive Insurance, which put up $10 million in total prize money. Peter Diamandis, founder and chief executive of the X Prize Foundation, was characteristically effusive. “We’re living in a day and time where literally anything is possible,” he declared, “where a man or woman who is passionate and driven can go out and build a spaceship or a 100-mile-per-gallon car. This is only the beginning.”

But the beginning of what? Don’t expect to see the Edison2 on the roads anytime soon, if ever; so far, no auto-maker has stepped forward to license the design. When it comes to prizes, though, we’re well past the beginning. Thanks in part to the influence of Diamandis and the X Prize, nonprofits, governments, and corporations are turning to prizes to spur innovation—particularly environmental innovation.

It’s not hard to see why. Unlike conventional research and development, prizes pay for performance, not just the effort. They call attention to important issues. And they open up problems to anyone with a good idea (or a bad one), getting beyond insiders or accredited professionals. “There are so many more ideas and possible solutions out there in the world than any given company or organization can tap into,” says Beth Trask, who oversees prizes for the nonprofit Environmental Defense Fund. Some people call this Joy’s Law—after Bill Joy, a founder of Sun Microsystems and a venture capitalist who once said: “No matter who you are, most of the smartest people work for someone else.”

Often, though, it takes insiders as well as outsiders to solve big problems, as Edison2’s travails suggest. Prizes can clearly drive technological innovation, but big environmental problems such as climate change and biodiversity loss are shaped by politics, economics, and culture as well as by science and engineering. And that raises a question: Once the buzz dies down, can prizes generate solutions that scale up to deliver lasting environmental change? Put another way, do they pay off for the world as well as for the winners?

You find the answers to those questions  here.

The sharing economy and me

You can rent this penthouse in Rio for $258/night on AirBnB

You hear a lot these days about the sharing economy and collaborative consumption, especially if you spend time in northern California. I spent last week in San Francisco, where people told me about AirBnB, which allows people to share their homes or apartments with visitors, RelayRides,  Share My Ride and getaround, which allow people to rent their cars for a few hours or days, and ThredUp, where parents buy, sell and share children’s clothes, toys and books. Meantime, and Lending Club connect people who want to lend money with those who want to borrow. With peer-to-peer lending, who needs Citi or Bank of America?

Last year, Fast Company published a thoughtful and well-reported overview of the sharing economy by Danielle Sacks under the headline: “Thanks to the social web, you can now share anything with anyone anywhere in the world. Is this the end of hyperconsumption?” More than 3 million people from 235 countries have “couch-surfed,” she reported, and more than 2.2 million bike-sharing trips are taken each month.

Many sharing websites, like Freecycle and Couch Surfing, are nonprofits. Seattle and Berkeley have tool libraries, where people can borrow a lawn mower, power saw or drill. But other sharing ventures are business. Some analysts expect the sharing economy to generate real money, Fast Company reported:

Gartner Group researchers estimate that the peer-to-peer financial-lending market will reach $5 billion by 2013. Frost & Sullivan projects that car-sharing revenues in North America alone will hit $3.3 billion by 2016.

I’ve always liked the idea of sharing–hey, I paid attention back in kindergarten–because of its obvious environmental benefits: The more we share, the less stuff we need to own. But I’ve been skeptical of the claim that the sharing economy would end–or even slow down–hyperconsumption. My week in San Francisco made me less of a skeptic. This idea just might spread. [click to continue…]

Crowdsourcing green

We is smarter than me.

That’s the premise behind a partnership between the  Environmental Defense Fund and InnoCentive. You probably know EDF–they’re a (mostly) business friendly nonprofit that looks for solutions to environmental problems. InnoCentive is a company that has built an open Internet platform to connect other firms, governments and NGOs to creative people all over the world who can help them solve problems.

Last week, EDF and Innocentive declared a winner in their first challenge, which looked for a new approach to the old problem of agricultural nitrate pollution: He is Patrick Fuller, 23, who is studying for a PhD. in chemical and biological engineering at Northwestern. He’ll be awarded $5,000 for his idea, about which more below.

Beth Trask

To learn more about the partnership, I spoke with Beth Trask, who leads, along with David Witzel, leads what EDF calls its innovation exchange, an effort to spread new “green”  solutions among companies.

“Like many people,” Beth told me, “we’ve been looking with much interest at the open innovation space. Basically, the concept is that there are many more ideas and possible solutions out there in the world than any given company or organization can tap into on its own.”

This isn’t an entirely new approach. Prizes have been used an incentive to solve scientific problems for centuries [See my 2009 blogpost, The Strange Power of Prizes]. More recently, companies including Kraft Foods (“Do you have a new product or packaging idea?“) and GE, with its EcoMagination Challenge, have used the Internet to look outside their own walls for new ideas. Richard Branson’s Virgin Earth Challenge offered a $25 million prize for a commercially viable plan to reverse climate change by removing CO2 from the air, while the $10-million Progressive Insurance Automotive X PRIZE was set up to inspire new low-polluting cars. [click to continue…]