 Hello and welcome to MBA 604 Innovation and Sustainability. We are in Lecture 2 Unit 1 covering Learning Outcome 1B today. I'm Joni Roberts. I'm Vice Program Chair and Consulting Professor for Sailors MBA Program. We are following the study guide and you will find this in your learning materials in this course on sailor.org and this is a program that you have to be enrolled in in order to take. All right one more review on the learning outcomes. So during this time together we are going to be looking at the key components of innovation and sustainability and their connection to one another. We are going to be assessing issues related to innovation and sustainability by identifying pros and cons of certain courses of action and the ethical and values based roots of those issues. We will analyze the cultural, ideological and practical perspectives on innovation and sustainability in ways individuals, communities and organizations can express those perspectives and put them into practice. We will also be learning how to incorporate elements of innovative sustainability to a specific business or sector by developing a hypothetical entrepreneurial startup organization. All right in lecture one we covered Learning Outcome 1A and today we're moving into 1B which is analyze how businesses transform themselves to advance socio-economic and environmental well-being. All right so let's find out more. The question we have is what does it mean to be a sustainable business? So from some of our learning resources here are a few statements on what that means. Sustainable businesses are concerned about the impact of their organizations on the environment, society and future generations. Sustainable businesses seek to innovate and optimize performance across economic, social and ecological business dimensions and they contribute to an evolving design of commerce aligned and compatible with human and ecosystem health. All right so with this idea of an evolving idea of commerce and sustainability let's look at some of the sustainability economics and mindsets. So two of the key ones are the belief in limits to growth and the belief in no limits to growth. So with limits to growth this group of people and people in sustainability believe that our current society is living beyond earth's resources and that we must change to live within the context of what earth can provide. So at some point the world's growing population will consume too great a quantity of natural resources for human society to exist and we must stabilize growth and live within the caring capacity of earth's natural system. So unsustainability is living outside the caring capacity of earth's natural system and we are already in that place. So some of the contributing factors to limits to growth and no limits to growth are things like the world population which is continuing to grow we're eight billion now. Industrial production how do we make goods, food production, resource consumption and pollution. So the no limits to growth believes that market signals and technological innovation can overcome limits to growth in natural systems. So there are few limits to economic growth and economic growth is always desired and this growth relies on continuous consumerism. Something to think about is that the cost of goods rarely include the impact on natural resources and human well-being so this is known as the externalities and these show up as biodiversity loss pollution and the impact on health and wellness. So the no limits to growth has been the dominating mindset of the industrial revolutions of the 19th and 20th centuries. So in 1968 ecologist Garrett Hardin published an article in science called The Tragedy of the Commons. So this takes us back a little bit to lecture one where we discussed the TED talk by Naoko Ishii an economic case for protecting the planet when where she was referencing the global commons. All right so The Tragedy of the Commons describes a situation where different parties share a common good such as public land or you know the air that we breathe and or the oceans and acting independently in their own interest they will ultimately over exploit and deplete or destroy the shared resource. So the tragedy is that the individuals acting in a way that they believe is in their own best interest end up acting in a way that is detrimental to their collective and individual long-term best interest. And Naoko Ishii and her TED talk gave an example about the fishing industry. I believe it was was in Japan. All right so that article The Tragedy of the Commons was published in 1968 long time ago now. So how well have we done since 1968? How you know well have we done with our government policies? What about our business practices? Our personal choices and our educational systems? Well we have actually done some things along the way. So starting in the 1970s we have a framework for pollution control. That was a reactive approach by complying with regulations. So clean up the pollution and using certain technologies specified by government. Next in the 80s we had pollution prevention. So that was more of a proactive approach. And this would be a way of managing resources to minimize waste based on better operating practices and consistent with total quality management efforts. So lean manufacturing for example saving on water reducing materials and in total quality management. So you're reducing waste through poor quality items. That definitely was an advancement for sustainability. Then in the 1990s we moved into eco efficiency. So maximize the efficiency of inputs processing steps, waste disposal and so forth because it reduces costs. And when you reduce costs you can boost profits. All right next in the 1990s we also got into things like industrial ecology, green chemistry, and engineering design for environment, life cycle analysis, and concurrent engineering. So this was a way of incorporating ecological health impact considerations into product design and extending this analysis to the full product life cycle. And we'll talk a little bit about that today. So from the 2000s forward we're in a new era of sustainability innovation. So sustainability innovation combines all of the above in a systems thinking approach that drives entrepreneurial innovation. So this is a quote from one of our learning resources framing sustainability innovation and entrepreneurship, one of our books, and it says the early decades of the 21st century will mark a transition period in which conventional economic models that assume infinite capacities of natural systems to provide resources and absorb waste no longer adequately reflect the reality of growth and its related environmental and health challenges. So providing material goods and creating prosperous communities for expanding populations in ways that are compatible with healthy communities and ecosystems are the core challenges of this century. So we are in the process of developing an evolving design of commerce. This leads us to the question, how can businesses take action to advance social and environmental well-being? Well, one of the steps we just reviewed was that came about with life cycle analysis and design. This is a thorough yet also very complex process and it uses, you know, various analytical tools for determining the environmental and health impacts of products and processes from material extraction to disposal. So we are looking at, you know, kind of a cradle to grave, you know, the beginning of making a product, looking at all of those steps along the way, and then the end of life at that, of that product. And so engaging in this process helps reveal the complex resource web that describes the life of a product and aids designers in finding ways to reduce or eliminate sources of waste and pollution. So this diagram here is quite complex. You really need to zoom in on it to get, um, to see really all the steps and some of the fine print there. You can find that image on Wikipedia by searching for life cycle assessment. So life cycle assessment is the same as life cycle analysis. Right. Maybe an easier way of looking at this process is by looking at this diagram. So life cycle analysis, we're moving from cradle to grave. So the raw material extraction to the end of life to more of a cradle to cradle process. So the steps here are material extraction, materials, manufacturing. You have your inputs and you have your waste in each of these steps and the product manufacturer. And then we move to the youth stage and the end of life. So at the end of life, we can look at ways to reuse parts and pieces of the end stage product. We can look at ways to recycle some of those materials and put them back into manufacturing. And we can even create an ecological loop where the end product becomes part of the ecosystem again for raw materials. And that is called cradle to cradle. This image can also be found on Wikipedia on the same site, life cycle assessment. Right. So let's take the classic example of a cup of coffee and consider the life cycle of a cup of coffee in all the steps and all of the impact. That can happen along the way. So the journey of a cup of coffee begins with clearing forest in Columbia to plant coffee trees. These coffee trees are sprayed with insecticides manufactured in the Rhine River Valley of Europe where affluence from the production process to make the Rhine one of the most polluted rivers in the world with much of its downstream wildlife destroyed. So back in Columbia, when these trees are sprayed, the insecticides are inadvertently inhaled by Colombian farmers and the residues are washed into rivers adversely affecting downstream ecosystems. So each tree yields beans for about 40 cups of coffee annually. The harvested beans are shipped to New Orleans and a Japanese constructed freighter made from Korean steel, the ore of which is mined on tribal lands in Palpa New Guinea. In New Orleans, the beans are roasted and then packaged in bags containing layers of polyethylene, nye on aluminum foil and polyester. The three plastic layers were fabricated in factories along Louisiana's infamous cancer corridor where polluting industries are located disproportionately in African-American neighborhoods. The plastic was made from oil shipped in tankers from Saudi Arabia. The aluminum foil was made from Australian bauxite strip mined on Aboriginal ancestral land and then shipped in barges fueled by Indonesian oil to refining facilities in the Pacific Northwest of the United States. These facilities drive their energy from the hydroelectric dams of the Columbia River which have destroyed salmon fishing runs considered sacred by Native American groups. The bags of coffee beans are then shipped across the United States in trucks powered by gasoline from the Gulf of Mexico oil refined near Philadelphia, a process that has contributed to serious air and water pollution, fish contamination and the decline of wildlife in the Delaware River basin. And all of this ignores the cup, the actual cup that holds the coffee that we were just talking about coffee. Then we have the cup and then maybe you're having a donut or a pastry with your coffee and that opens up another long story of that product's life cycle. So to get into this analysis is quite comprehensive and there are a lot of steps along the way. And maybe we get an idea, a little bit of an idea by talking about that, why we are where we still are in our business practices because this is hard. It's hard to do and it takes a lot of effort and a lot of thoughtfulness. All right so what are the opportunities and challenges in life cycle analysis and design? Well it provides measurements and accounting of all points of impact and then it reveals sources of waste and opportunities for innovation and redesign that would otherwise remain unnoticed. We can then compare products to evaluate impact and outcomes so you can do a life cycle analysis for product day and product B and then see which one has better outcomes or which one has issues that can be more easily overcome. And it analyzes the full life cycle and very importantly also involves systems thinking which we will also be getting more into in this course. All right there are some challenges. LCA is data intensive, it's expensive to conduct, takes a lot of time to do that and sustainability in general how you define and measure for impact is controversial. There are scientific difficulties that need to be considered and LCA may not account for other non-environmental aspects of product quality and costs. All right so with all that and considering how hard this can be, LCA certainly has its challenges but it's better to begin than do nothing right? Every step you take to start identifying those opportunities for waste reduction, for innovation, for redesign to make something more sustainable the better. So what can happen as companies say that's too hard and walk away from it when you could say that's hard but we can start and get on this journey and keep going farther with it as time goes on. All right so what we are seeing is that these problems may not be easy to solve. We have to undo a lot of the way things have been done but they are worthy problems to solve and many would say our very life here on this planet depends on us solving these problems. All right one way one way businesses can start on this journey is with biomimicry and I think this is an endlessly fascinating approach to sustainable innovation and Janine Benyes she has really brought forward biomimicry starting with her classic TED Talk, biomimicry and action and then also with her biomimicry institute and she also has asknature.org which we'll also talk a little bit more about as we move through this. All right so in her TED Talk she shares that we live in a competent universe. We are part of a brilliant planet and we are surrounded by genius and nature knows how to live here gracefully on this planet and nature has already done what we are trying to innovate and do so imagine designing spring you know imagine the orchestration that happens in nature during spring imagine telling us no time to melt and then the cascading events that take place in the spring the flowers that began to bloom the new life that springs forth the mating season for many animals the timing the coordination doing all of that without top-down laws without policies or climate change protocols so this is really a reminder for all of us that nature is genius and we can learn from nature and nature can be a mentor to us all right the idea of biomimicry is when designing products and services ask how would nature solve this and we can think about the problem of energy usage and we can look to social insects to solve energy usage problems and create smart grids so we can ask how do ants and bees find their food and their flowers in the most effective way as a whole colony or high how can this be used with appliances and HVAC systems to talk to one another and determine how to minimize peak power use all right this led to the idea of swarm technology and a company called EnCycle when Janine Benyes did her TED talk it's now no I'm sorry it was called Regen it's now called EnCycle this company has continued on and they use swarm technology with AI artificial intelligence to dramatically reduce HVAC related energy usage and carbon emissions and it's called swarm logic all right that was by looking at these in particular for that design okay another example the question is how does nature gather the sun's energy all right we can think of leaves right other ways nature gathers the sun's energy and this led to solar cells that mimic leaves and it's self-assembling it can be put on any substrate it's extremely inexpensive and rechargeable every five years and this innovation started as one sun which was founded by Paul Hawkin known today for his work with project drawdown and involving Janine Benyes of the biomimicry institute today this company is called energy everywhere all right very interesting innovations the next question how does nature strengthen with minimal material so we can look at skeletons and we can think of how trees and bones are constantly reforming themselves along lines of stress and by looking at skeletons an algorithm was put into a software program that's now being used to make bridges and building beams light weight it was also used by GM opal the european division which is now called cilantro and to create a skeleton in in what was called their bionic car and it lightweighted that skeleton using a minimum amount of material as an organism must for the maximum amount of strength and i'm sure we can keep going with this idea and find many more applications for it including in the airline industry another example how does nature reduce drag well we can learn from a humpback whale so humpback whales have scalloped edges on their flippers and those scalloped edges play with flow in such a way that it reduces drag by 32 percent so this idea was applied to wind turbines that can rotate in incredibly slow wind speeds as a result there's another one how does nature provide ecosystem services so how can we look to nature in our cities to build better cities you know ecosystems are sustainable right self-sustaining pretty much so we can ask how can cities do at least as well in terms of ecosystem services as the native systems they replace that is sustainability in action so this kind of thinking and collaborations have resulted in creating ecological performance standards that hold cities to a higher bar and you can go to the biomimicry institute and even read more about that right so here's another idea that we can think about so we thought about how we can do product design how we can build better cities and then last thing too how can nature help us create social sustainability we have the environmental sustainability but we also have social sustainability how about you know humans and humanity how can we do better by learning from nature so we can learn from fungi and I looked this word up because I've heard it said so many ways and you can say fungi or fungi or perhaps even fungi so the dictionary has a fungi and fungi and I've heard people say fungi so anyway however you want to say it also known as mycelium and they are the expert communicators and connectors in nature but they provide a support system for nature in forests agile they're adaptable to conditions they share nutrients between species and protect them from parasites and bacteria they communicate a lot of trees and tree roots and they encourage diversity and a healthy forest so they help to strengthen and sustain forests all right so we can think about that and think about how can humans be more like nature in that way right all right for more examples you'll find this and Janine Venious's TED talk on her website biomimicry.org for more inspiring ideas you can go to ask nature.org it's sort of like a search engine for asking questions about how nature solves problems it's just endless inspiration here and I encourage you to check that out and back to the idea of sustainability economics and mindsets this process of developing an evolving design of commerce what we can see is that we're shifting from economics that are economic systems that are cutthroat and competitive that look to dominate nature to ones that are collaborative and creative and use nature as a mentor so I'd like for you to think a lot more about that as we move through this course together cutthroat and competitive to collaborative and creative what does that really mean what does that mean for us how do we evolve into that how does commerce evolve into that do we keep secrets or do we share what we learn we share openly how much do we share how much do we help one another how much do we help one another to be stronger and more resilient and how much do we embrace diversity so with these questions in mind we'll be hopefully improving our relationships with nature and with one another okay so I'm going to leave you with those thoughts for today and in our next lecture we are going to be finishing out learning outcome 1b with some topics like linear versus systems thinking ideas on innovating across the supply chain we're getting into a very important topic called circular economy and multi-value creation and we will finish up unit one by covering learning outcome 1c sustainability and ethics