The green economy is showing that the days of unfettered competition are numbered, successful firms know how to play well with others
When academics come to write the corporate history of the start of the 21st century they will almost certainly devote a chapter or two to the remarkable way in which the capitalist model of unfettered competition gave way to something much more nuanced, something based less on dog-eat-dog competition and more on mutually beneficial co-operation. If we're lucky they might also come up with a theory as to why those paid to comment on corporate trends singularly failed to notice that the system of capitalism that had held sway for the best part of two centuries was changing before their eyes.
Of course, businesses have always partnered with each other as a means of opening up new markets or obtaining products and technologies they could not develop themselves. But it is increasingly apparent that there has been a shift in the way businesses approach partnerships, moving from a necessary evil designed for engineering short-term gains, to strategic and multi-faceted co-operations intended to open up entirely new markets and regarded as crucial to an organisation's long-term future.
Nowhere is this trend more apparent than in the clean tech sector.
Last week's Cleantech Forum in San Francisco took "the Power of Global Partnerships" as its overarching theme, providing example after example of how green technology firms are working together to accelerate the development and deployment of their products. Meanwhile, also in the US, GreenBiz has developed an entire series of events under the banner Verge, dedicated to the topic of convergence between green energy, smart buildings and grids, and electric vehicles.
In the UK, the sight of industry-wide clean tech research forums and joint ventures between energy companies and specialist renewable energy project developers has become surprisingly common, while one of the most interesting aspects of the Clean and Cool trade mission to San Franciso I attended last week was the way in which the group of clean tech start-ups quickly mapped out ways they could potentially work together.
What is so interesting about this trend is that it covers both convergence and collaboration. That is to say companies are converging with firms in related sectors, such as smart grid specialists working with renewable energy companies or fuel cell developers working with truck manufacturers, while also partnering with rivals to collaborate on the development of more standardised technologies, such as the remarkable level of co-operation between electric car manufacturers.
Speaking to Ford's director of vehicle electrification Mike Tinskey last week, he admitted that in the last two years he had been invited on more tours of the museums of the auto giant's rivals than he had done in the previous 20 years of working for the company. He added that the co-operation with fierce competitors on the development of electric vehicles, and most importantly the standards needed to make a recharging network feasible, had gone far better than anyone had any right to expect.
"There is a realisation," he said, "that we need to work on a lot of this stuff together."
The question for green businesses and governments is how best to exploit this trend in order to maximise success and accelerate the rollout of clean technologies.
For business leaders the secret lies in an early appreciation that partnerships represent a strategically important component of a firm's activities. The green companies that learn how to partner most effectively, how to balance the tension between competition with rivals and co-operation with peers, how to distinguish the alliances that can benefit your firm from those that will waste your time, will be the companies that prosper over the coming years. As such it is vital to allocate appropriate resources to managing these partnerships and developing the skill set necessary to ensure that they work, at the same time as retaining the fiercely competitive ethos required to drive technological development and sales success.
After all, the energy firm that works out how to build a network of smart grid and onsite renewables partners will be far better positioned in the coming years than the old school utility that insists on ploughing a lone furrow. Just as the car firm that can offer smartphone applications for planning fuel efficient routes and renewable-powered recharging units for plug-in hybrids will have a far stronger proposition for customers than those shipping models that lack green bells and whistles others offer as standard.
The market will drive more of these alliances as those green companies that develop an ecosystem of effective partnerships outperform those who don't, just as in the IT sector the Googles, Oracles, IBMs, SAPs, and Microsofts of this world have secured their dominance by combining intense competition with wide-ranging networks of technology agreements.
However, there is also a role for governments in encouraging the kind of partnerships that will be critical to the accelerated rollout of clean technologies. This is already happening to some extent with governments around the world providing support for public-private research projects that bring competitive firms together in an attempt to minimise R&D duplication and establish effective industry standards.
But while there has been lots of talk of multi-technology integrated demonstration projects in the form of eco-towns and cities, we are yet to see enough real-world examples that show how different companies and technologies can work together to enable genuinely low carbon infrastructure.
One evening over dinner last week the 16 UK firms involved in the Clean and Cool mission indulged in an intellectual exercise to map out how they could one day all work together. It was remarkably easy to envisage as the various green fuel developers, engine designers, solar and hydro technology manufacturers, and energy storage and building technology systems all offered solutions that fit somewhere into the low carbon technology chain.
A small amount of well-targeted government support designed to bring as many leading companies as possible together to work on a world-beating demonstration project could provide the invaluable evidence needed to convince all businesses that low carbon infrastructure can work. Perhaps then those writing the first draft of history will realise how the era of corporate co-operation is changing the way we all live and work for the better.
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