Enterprise Resilience Management Blog

Plant-based Plastics

Much has changed over the past 40 decades. Older readers may recall the 1967 motion picture "The Graduate," in which Dustin Hoffman got his first big break. One of the more memorable pieces of dialog in that film went like this:

Mr. McGuire: I want to say one word to you. Just one word.
Benjamin: Yes, sir.
Mr. McGuire: Are you listening?
Benjamin: Yes, I am.
Mr. McGuire: Plastics.

In the past few years, plastics have taken a public relations nosedive. Environmentalists decry everything from the plastic rings that harness six-packs of drinks to the plastic shopping bags that float eerily in the wind (sort of like in the 1999 film "American Beauty"). Most plastics are virtually indestructible and are clogging landfills around the globe. Shoppers have been encouraged to buy re-usable cloth sacks to help clean up the environment. The latest bad news for plastics came in reports that claim a compound used in hard transparent plastic bottles, bisphenol A, or BPA -- a compound created by a Russian chemist in 1891 -- creates health risks. The fact is, however, that the world is as dependent on plastics as it is on oil or electricity.

Like the old adage says, "necessity is the mother of invention"; and scientists are looking for safer, greener ways to make plastics ["I Have Just One Word for You: Bioplastics," by Mara Der Havanesian, BusinessWeek, 30 June 2008 print edition].

"For half of his life and all of his 25-year career as a bioengineer, Oliver P. Peoples has wanted to prove two things: that he could reengineer plants to grow biodegradable plastic in their cells and that he could make a lot of money doing it. On the first goal, Peoples has had astonishing success. His Cambridge (Mass.) company, Metabolix has harnessed the complex genetics of plant-cell metabolism and collected hundreds of patents on a process for manufacturing 'bioplastics' in large vats of microbes. A $200million factory is under construction and could start producing Metabolix's bioplastic, called Mirel, early next year. But Peoples' second mission, amassing wealth for himself and his investors, is glaringly incomplete. ... The company is now in a crucible every struggling biotech encounters. As it awaits commercial production, it is burning through cash. And it must carefully pick the right customers to showcase Mirel's wide range of applications, from gift cards and cosmetics cases to plastic bags and computer parts."

Despite the fact that Peoples burn-rate is high, so are his expectations of success. Peoples believes the timing of his product is just about perfect.

"As oil prices spike up, so does the cost of plastic materials, virtually all of which are petroleum-based. In addition, consumer groups and environmentalists around the world are in an uproar over the billions of tons of plastic waste that get dumped at sea or buried in landfills and over the health effects of related toxins. Almost 30 million tons a year of plastic solid waste is dumped into the U.S., and about 5% is recycled. These trends fuel demand for novel bioplastics that aren't linked to pricey fossil fuels and don't harm the environment."

Peoples' greatest concern should be about competitors. Even producers of traditional petroleum-based plastics are muscling their way into the bioplastics field.

"DuPont fired up its first biomaterials plant in 2006, selling more than a $100 million worth of products in the past year, including its bioplastic called Sorona. Starting in 2009, Cargill's NatureWorks unit hopes to ship 140,000 metric tons a year of a bioplastic called Ingeo, for use in fresh food containers and textiles, among other things. Brazilian petrochemical giant Braskem is spending $300 million on a factory for sugarcane-based bioplastics, while Toray Industries of Japan is making plastics from fermented plant starches and sugars. There's also a host of U.S. startups with names such as Novomer and Cereplast that make plastics from wheat, tapioca, potatoes, soy, and more. 'We've gone from being mad scientists to being visionaries,' says Frederic Scheer, CEO of Cereplast, based in Hawthorne, Calif."

Peoples, however, believes he has an edge over the competition.

"All [of the competitor] materials are green in the sense that they reduce dependence on fossil fuels. But while rival bioplastics must be incinerated or composted at high temperatures, Mirel will decompose if it is simply tossed in a home compost heap or dumped at sea. 'Mirel is the one that works in all environments,' says Joseph P. Greene, a professor in mechanical engineering and manufacturing at California State University at Chico, who was hired by the state to find the best bioplastic on the market. 'It breaks down nicely with food or yard waste. Boom, 180 days later and it's nice brown dirt.' What's more, the manufacturer determines how fast the plastic biodegrades into harmless plant materials and the conditions under which that happens."

Mirel's environment edge hasn't gone unnoticed. Organizations concerned about their "green" image from Target to the U.S. military are testing Mirel in products.

"About 50 potential customers, including Target, Revlon, Hewlett-Packard, medical supply company Labcon, and the U.S. military, are testing Mirel in more than 70 different products. 'We have to do something [because] most plastic just ends up in a bad place,' says Jim Happ, president of Labcon, which is testing Mirel to replace some 3 million pounds of plastic it uses each year in 800 products for hospital labs. 'We love their polymer,' says JoAnn Ratto, an engineer at a U.S. Army research center in Natick, Mass., which is evaluating Mirel as a liner for waste bags that are thrown overboard by naval ships. 'We can't get enough of it.'"

Der Havanesian reports that the process for producing Mirel can be simply explained but such an explanation doesn't capture the genius and hard work behind the techniques that were used to create it.

"Mirel is made in large vats of genetically modified microbes. They gorge on glucose from corn, then convert the sugar into fatty globules, which make up more than 80% of the cells by weight. These are harvested, dried, and turned into pellets. It all sounds painless enough, but getting the microbes to comply requires marvels of genetic engineering."

Peoples journey from a young boy in Scotland to entrepreneur in America is interesting and provides some insight into an entrepreneur's mindset.

"He grew up poor in Slamannan, a remote, windswept coal mining town between Glasgow and Edinburgh. His father died when he was 16, leaving little for his family of 11 children. 'Olly' was spared a life in the mines by the attention of his high school chemistry teacher, who helped him get into the prestigious University of Aberdeen. After he earned his PhD in molecular biology in 1983, he landed a postgrad spot at the Massachusetts Institute of Technology. Pulling himself out of poverty and cultivating a competitive streak at MIT prepared him for the life of an entrepreneur, says Pamela Bassett, a Cantor Fitzgerald analyst in New York. 'Most scientists want to publish, especially if you're at MIT,' she says. 'Olly wants to commercialize.' With a background in biochemistry, Peoples sensed early on that genetic engineering would open up whole new commercial landscapes. Most of his lab mates were interested in medical biotech, and several started companies that hit the jackpot, with lush buyouts by drug giants. Peoples yearned for a similar fate. But unlike many of his peers, he bypassed medicine and plunged into industrial applications. MIT filed for patents on his work in 1987, and by the time they were approved four years later, Peoples had negotiated exclusive licenses and mapped out a business plan for a new company."

In previous posts, I've noted that entrepreneurs are driven to see their ideas take shape and then take hold. Entrepreneurs are often a combination of idea generator, salesman, and motivator. They are not idealists, but passionate, hard-nosed business people who can't understand it when others fail to grasp their vision. Peoples is no exception. According to Der Havanesian, Peoples believed that others would immediately grasp the potential of his idea and that venture capital would flow freely. It didn't. To stay afloat, he went through eleven rounds of financing, plus an initial public offering. The market for bioplastics remains small but is growing.

"Total global production of bioplastics is still minuscule. All the manufacturers combined will generate only about 1 million tons a year by 2010, analysts say, compared with 500 million tons a year of the petro-based variety. But these ordinary plastics, which account for up to 10% of total U.S. oil consumption, are quickly becoming an extravagance at $138 for a barrel of crude. A switch to bioplastics not only would help reduce oil dependence but also could save companies and consumers serious money."

The one big drawback facing Mirel at the moment is that it is made from food crops. With crop prices rising and humanitarians urging companies to stop using food crops for purposes other than feeding people and livestock, Peoples is conducting more research and development to try and make Mirel even more attractive to customers.

"Having proved his science is valid, Peoples wants to scale up production of Mirel without relying on food crops such as corn. Funded by the U.S. Energy Dept., he's trying to bioengineer switchgrass and other plants to produce the plastic in their leaves. If he can pull it off, Metabolix could reap billions of pounds of bioplastics on just a fraction of the acreage currently given over to corn. It'll be a challenge, but Peoples, ever the scientist, says: 'The stuff that is easy to do is not that interesting.'"

Another BusinessWeek article written by Joshua Schneyer, reports that Brazil has big plans about becoming the world's leading producer of bioplastics ["Brazil's 'Organic' Plastics," 24 June 2008]. The country currently produces biofuels from sugarcane and is also looking to sugarcane to produce bioplastic.

"Already the No. 8 producer of petro-based plastics, Brazil will soon be the largest producer of organic ones, according to Dow and Braskem. Both companies say they've mastered technologies to turn sugar cane into polyethylene, the most popular plastic. By 2012, about 10% of Brazil's plastic will come from cane instead of petroleum."

As noted above, however, Mirel has a distinct advantage over sugarcane-based plastic in that it is biodegradable. In addition, sugarcane crops are already a source of contention for environmentalists.

"Not everyone believes that sugar cane should be used for plastics. Dow and Braskem plan to burn 300 million gallons of ethanol in 2012, around 6% of Brazil's current output. Critics say using edible crops for energy has fueled the runup in global food prices. Some say cane farming is pushing Brazil's agricultural frontier north into the Amazon forest, and that pre-harvest cane-burning, a common practice, lifts Brazil's carbon emissions. And, like conventional plastic, Brazil's cane plastic won't break down easily in the environment. That which isn't recycled may end up in landfills, or worse, swirling around the Great Garbage Patch, a Pacific Ocean vortex that eventually sucks in large volumes of plastic floating at sea."

The technology challenges involved with bioplastics will eventually be solved (Peoples has proven that) and the economics of oil will make bioplastics commonplace in the future. As a result, the plastics industry should remain sustainable and plastic products remain affordable even after the "oil age" passes. That is why BusinessWeek wrote, "I have just one word for you: bioplastics." Mr. McGuire may have been right all along.

The Future of Desalination

In a recent post, I discussed efforts to harness the power of the ocean's waves to generate electricity [Harnessing the Power of Waves]. Scientists and engineers are also looking to the oceans for an even more important resource -- potable water ["Tapping the oceans," The Economist, 7 June 2008 print edition]. Many pundits have raised the possibility of future resource wars and high on most lists of resources over which nations could fight is water. The Economist puts it this way:

"There are vast amounts of water on earth. Unfortunately, over 97% of it is too salty for human consumption and only a fraction of the remainder is easily accessible in rivers, lakes or groundwater. Climate change, droughts, growing population and increasing industrial demand are straining the available supplies of fresh water. More than 1 billion people live in areas where water is scarce, according to the United Nations, and that number could increase to 1.8 billion by 2025."

One cannot help but be reminded of Samuel Taylor Coleridges' famous poem, "The Rime of the Ancient Mariner."

Water, water, every where,
And all the boards did shrink;
Water, water, every where,
Nor any drop to drink.

The Economist article asks the question, "As concern over water's scarcity grows, can desalination offer a quick technological fix?" The challenge is not just technology (because it's been around for awhile):

"References to removing salt from seawater can be found in stories and legends dating back to ancient times. But the first concerted efforts to produce drinking water from seawater were not until the 16th century, when European explorers on long sea voyages began installing simple desalting equipment on their ships for emergency use. These devices tended to be crude and inefficient, and boiled seawater above a stove or furnace. An important advance in desalination came from the sugar industry. To produce crystalline sugar, large amounts of fuel were needed to heat the sugar sap and evaporate the water it contained. Around 1850 an American engineer named Norbert Rillieux won several patents for a way to refine sugar more efficiently. His idea became what is known today as multiple-effect distillation, and consists of a cascading system of chambers, each at a lower pressure than the one before. This means the water boils at a lower temperature in each successive chamber. Heat from water vapour in the first chamber can thus be recycled to evaporate water in the next chamber, and so on. This reduced the energy consumption of sugar refining by up to 80%, says James Birkett of West Neck Strategies, a desalination consultancy based in Nobleboro, Maine. But it took about 50 years for the idea to make its way from one industry to another. Only in the late 19th century did multi-effect evaporators for desalination begin to appear on steamships and in arid countries such as Yemen and Sudan."

Anyone familiar with sea-going vessels knows that they have been using evaporators to generate potable water for some time. In fact, the aircraft carrier USS Abraham Lincoln used its evaporators to desalinate water that was used to save survivors of the Indonesia tsunami in 2004. The challenge for desalination remains cost, especially with rising energy prices. As the article notes:

"One time-tested but expensive way to produce drinking water is desalination: removing dissolved salts from sea and brackish water. Its appeal is obvious. The world's oceans, in particular, present a virtually limitless and drought-proof supply of water. 'If we could ever competitively—at a cheap rate—get fresh water from salt water,' observed President John Kennedy nearly 50 years ago, 'that would be in the long-range interest of humanity, and would really dwarf any other scientific accomplishment.' According to the latest figures from the International Desalination Association, there are now 13,080 desalination plants in operation around the world. Together they have the capacity to produce up to 55.6m cubic metres of drinkable water a day—a mere 0.5% of global water use. About half of the capacity is in the Middle East. Because desalination requires large amounts of energy and can cost several times as much as treating river or groundwater, its use in the past was largely confined to wealthy oil-rich nations, where energy is cheap and water is scarce."

As climate change spreads water shortages to areas unfamiliar with droughts, more and more people are thinking about desalination.

"In California alone some 20 seawater-desalination plants have been proposed, including a $300m facility near San Diego. Several Australian cities are planning or constructing huge desalination plants, with the biggest, near Melbourne, expected to cost about $2.9 billion. Even London is building one. According to projections from Global Water Intelligence, a market-research firm, worldwide desalination capacity will nearly double between now and 2015."

Big projects, however, always raise big concerns -- especially if they increase energy consumption. Desalinating seawater to make potable water is no exception.

"Some environmental groups are concerned about the energy the plants will use, and the greenhouse gases they will spew out. A large desalination plant can suck up enough electricity in one year to power more than 30,000 homes. The good news is that advances in technology and manufacturing have reduced the cost and energy requirements of desalination. And many new plants are being held to strict environmental standards. One recently built plant in Perth, Australia, runs on renewable energy from a nearby wind farm. In addition, its modern seawater-intake and waste-discharge systems minimise the impact on local marine life. Jason Antenucci, deputy director of the Centre for Water Research at the University of Western Australia in Perth, says the facility has 'set a benchmark for other plants in Australia.'"

Although cost remains a daunting challenge for desalination plants, there are also some technical challenges.

"[In early systems,] mineral deposits tended to build up on heat-exchange surfaces, and this inhibited the transfer of energy. In the 1950s a new type of thermal-desalination process, called multi-stage flash, reduced this problem. In this, seawater is heated under high pressure and then passed through a series of chambers, each at a lower pressure than the one before, causing some of the water to evaporate or 'flash' at each step. Concentrated seawater is left at the bottom of the chambers, and freshwater vapour condenses above. Because evaporation does not happen on the heat-exchange surfaces, fewer minerals are deposited. Countries in the Middle East with a lot of oil and a little water soon adopted multi-stage flash. Because it needs hot steam, many desalination facilities were put next to power stations, which generate excess heat. For a time, the cogeneration of electricity and water dominated the desalination industry."

Scientists are constantly looking for better ways to desalinate seawater and, like in many other areas of research, they have looked to nature to find breakthroughs.

"Research into new ways to remove salt from water picked up in the 1950s. The American government set up the Office of Saline Water to support the search for desalination technology. And scientists at the University of Florida and the University of California, Los Angeles (UCLA) began to investigate membranes that are permeable to water, but restrict the passage of dissolved salts. Such membranes are common in nature. When there is a salty solution on one side of a semi-permeable membrane (such as a cell wall), and a less salty solution on the other, water diffuses through the membrane from the less concentrated side to the more concentrated side. This process, which tends to equalise the saltiness of the two solutions, is called osmosis. Researchers wondered whether osmosis could be reversed by applying pressure to the more concentrated solution, causing water molecules to diffuse through the membrane and leave behind even more highly concentrated brine. Initial efforts showed only limited success, producing tiny amounts of fresh water. That changed in 1960, when Sidney Loeb and Srinivasa Sourirajan of UCLA hand-cast their own membranes from cellulose acetate, a polymer used in photographic film. Their new membranes boasted a dramatically improved flux (the rate at which water molecules diffuse through a membrane of a given size) leading, in 1965, to a small 'reverse osmosis' plant for desalting brackish water in Coalinga, California."

Although reverse osmosis solved some problems, it exacerbated the energy challenge.

"The energy requirements for thermal desalination do not much depend on the saltiness of the source water, but the energy needed for reverse osmosis is directly related to the concentration of dissolved salts. The saltier the water, the higher the pressure it takes (and hence the more energy you need) to push water through a membrane in order to leave behind the salt. Seawater generally contains 33-37 grams of dissolved solids per litre. To turn it into drinking water, nearly 99% of these salts must be removed. Because brackish water contains less salt than seawater, it is less energy-intensive, and thus less expensive, to process. As a result, reverse osmosis first became established as a way to treat brackish water. Another important distinction is that reverse osmosis, unlike thermal desalination, calls for extensive pre-treatment of the feed water. Reverse-osmosis plants use filters and chemicals to remove particles that could clog up the membranes, and the membranes must also be washed periodically to reduce scaling and fouling."

All of that, of course, adds to the cost of desalinating water. Continued research has addressed some of these problems.

"In the late 1970s John Cadotte of America’s Midwest Research Institute and the FilmTec Corporation created a much-improved membrane by using a special cross-linking reaction between two chemicals atop a porous backing material. His composite membrane consisted of a very thin layer of polyamide, to perform the separation, and a sturdy support beneath it. Thanks to the membrane's improved water flux, and its ability to tolerate pH and temperature variations, it went on to dominate the industry. At around the same time, the first reverse-osmosis plants for seawater began to appear. These early plants needed a lot of energy. The first big municipal seawater plant, which began operating in Jeddah, Saudi Arabia, in 1980, required more than 8 kilowatt hours (kWh) to produce one cubic metre of drinking water."

When energy is cheap and environmental concerns have a lower priority than access to potable water, building and operating such plants made a certain amount of sense. As energy prices rose, however, so did research in how to bring down energy usage and generating costs.

"The energy consumption of such plants has since fallen dramatically, thanks in large part to energy-recovery devices. High-pressure pumps force seawater against a membrane, which is typically arranged in a spiral inside a tube, to increase the surface area exposed to the incoming water and optimise the flux through the membrane. About half of the water emerges as freshwater on the other side. The remaining liquid, which contains the leftover salts, shoots out of the system at high pressure. If that high-pressure waste stream is run through a turbine or rotor, energy can be recovered and used to pressurise the incoming seawater. The energy-recovery devices in the 1980s were only about 75% efficient, but newer ones can recover about 96% of the energy from the waste stream. As a result, the energy use for reverse-osmosis seawater desalination has fallen. The Perth plant, which uses technology from Energy Recovery, a firm based in California, consumes only 3.7kWh to produce one cubic metre of drinking water, according to Gary Crisp, who helped to oversee the plant's design for the Water Corporation, a local utility."

That is less than half of the energy required by early plants. That means you can desalinate 1000 litres of water for about the same amount it costs to run a central air conditioner for an hour in a typical U.S. home (about a dime). It also makes reverse osmosis plants a little more economical than thermal plants.

"Thermal plants suck up nearly as much electricity, but also need large amounts of steam. 'A thermal plant only is practical if you can build it in such a way that it can take advantage of very low-cost or waste heat,' says Tom Pankratz, a water consultant based in Texas, who is also a board member of the International Desalination Association. Economies of scale, better membranes and improved energy-recovery have helped to bring down the cost of reverse-osmosis seawater-desalination. Although the cost of desalination plants and their water depends on where they are, as well as the local costs of capital and operations, prices decreased from roughly $1.50 a cubic metre in the early 1990s to around 50 cents in 2003, says Mr Pankratz. As a result, reverse osmosis is preferred for most modern seawater-desalination (though rising energy and commodity prices mean the cost per cubic metre has now risen to around 75 cents). Experts reckon that further gains in energy efficiency, and hence cost reductions, will be increasingly difficult, however. According to a recent report on desalination from America’s National Research Council, energy use is unlikely to be reduced by much more than 15% below today’s levels—though that would still be worthwhile, it concludes."

In addition to looking for further energy reductions (which could be a case of diminishing returns), scientists and engineers are looking at new materials (like making membranes out of nanotubes) to increase plant efficiency as well as tackling other challenges.

"As desalination becomes more widespread, its environmental impacts, including the design of intake and discharge structures, are coming under increased scrutiny. Some of the damage can be mitigated fairly easily. Reducing the intake velocity enables most fish species and other mobile marine life to swim away from the intake system, though small animals, such as plankton or fish larvae, may still get caught in the intake screens or sucked into the plant. A bigger problem may be the leftover brine, which typically contains twice as much salt as seawater and is discharged back into the ocean. So far little scientific information exists about its long-term effects. In the past, most big seawater-desalination plants were built in places that did not conduct adequate environmental assessments, says Peter Gleick, president of the Pacific Institute, a think-tank based in California that published a report on desalination in 2006. But as plants are built in areas with tighter environmental restrictions, more information is becoming available. Some recent measurements from Perth are encouraging. Initially scientists from the Centre for Water Research feared that the brine discharge from the plant would increase the saltiness of the coastal environment. But a monitoring study found that salinity returns to normal levels within about 500 metres of the plants’ discharge units. ... A separate problem may be that some metals or chemicals leach into the brine. Thermal-desalination plants are prone to corrosion, and may shed traces of heavy metals, such as copper, into the waste stream. Reverse-osmosis plants, for their part, use chemicals during the pre-treatment and cleaning of the membranes, some of which may end up in the brine. Modern plants, however, remove most of the chemicals from the water before it is discharged. And new approaches to pre-treatment may reduce or eliminate the need for some chemicals. Based on the limited evidence available to date, it appears that desalination may actually be less environmentally harmful than some other water-supply options, such as diverting large amounts of fresh water from rivers, for example, which can lead to severe reductions in local fish populations. But uncertainties over the environmental impacts of desalination make it hard to draw definite conclusions, the National Research Council concluded. Its report suggested that further research on the environmental impacts of desalination, and how to mitigate them, should be a high priority."

The article concludes by noting that most countries are going to have to take a "portfolio" approach to secure ample water supplies. This means utilizing traditional water sources as well as new ones, including seawater and waste water. In the latter case, what people don't know doesn't hurt them. As I recall, President Richard Nixon, visited a water treatment facility and famously refused to take a sip of recovered waste water when it was offered to him. The fact is, however, that making waste water potable is more energy efficient and produces better quality water than treating seawater. Within a few years, we will see water shortages grab as many headlines as the current global food crisis. We don't want to wait until there is a crisis to address seriously the water shortages that everyone knows is on the way.

Harnessing the Power of Waves

As long as people have turned their eyes from the shore to the sea, they have seen and recognized the power of waves as they relentlessly hurl themselves toward the shoreline. I assume that for all those eons someone has also dreamed of harnessing that power. In the modern age, serious efforts to harness wave power remain in their infancy ["The coming wave," The Economist, 7 June 2008 print edition].

"The first patents for wave-power devices were issued in the 18th century. But nothing much happened until the mid-1970s, when the oil crisis inspired Stephen Salter, an engineer at the University of Edinburgh, in Scotland, to develop a wave generator known as Salter’s Duck. His design contained curved, floating canisters, each the size of a house, that would be strung together and then tethered to the ocean floor. As the canisters, known as Ducks, were tossed about by the waves, each one would rock back and forth. Hydraulics would convert the rocking motion to rotational motion, which would in turn drive a generator. A single Duck was calculated to be capable of generating 6 megawatts (MW) of electricity—enough to power around 4,000 homes. The plan was to install them in groups of several dozen. Initial estimates put the cost of generating electricity in this way at nearly $1 per kilowatt hour (kWh), far more than nuclear power, the most expensive electricity at the time. But as Dr Salter and his team improved their design, they managed to bring the cost-per-kWh down to the cost of nuclear power. Even so, the research programme was shut down by the British government in 1982."

Interest in wave power has never waned and with skyrocketing energy prices it appears to be rising like the incoming tide.

"As soaring oil prices and concern over climate change give added urgency to the search for new, renewable sources of energy, the sea is an obvious place to look. In theory the world’s electricity needs could be met with just a tiny fraction of the energy sloshing around in the oceans. Alas, harnessing it has proved to be unexpectedly difficult. In recent years wind farms have sprouted on plains and hilltops, and solar panels have been sprinkled across rooftops and deserts. But where the technology of wind and solar power is established and steadily improving, that of wave power is still in its infancy. The world had to wait until October 2007 for the first commercial wave farm, consisting of three snakelike tubes undulating with the Atlantic swell off the coast of Portugal."

Although trying to harness the power of nature found in open stretches along the coastline might sound like a no-brainer, people living along the coast often object to such projects. They pay big bucks for those ocean views and don't want them spoiled by manmade objects, especially objects the size of wind-powered generators. One would think that harnessing waves would have less visual impact on the coastline, but, as The Economist notes, harnessing wave power is extremely difficult.

"The story of wave power ... has been one of trials and tests followed by disappointment and delays. Of the many devices developed to capture wave energy, none has ever been deployed on a large scale. Given wave power’s potential, why has it been so hard to get the technology to work—and may things now be about to change?"

The article notes that in "December [2007] Pacific Gas & Electric, an American utility, signed an agreement to buy electricity from a wave farm that is to be built off the coast of California and is due to open in 2012. Across the world many other wave-power schemes are on the drawing board." It also reports that Dr. Salter's legacy lives on. 

"One example [of the next generation of wave power generators] is the Pelamis device, designed by some of Dr Salter’s former students, who now work at Pelamis Wave Power, a firm based in Scotland. Three such devices, each capable of generating up to 750kW, have been deployed off the coast of Portugal, and dozens more are due to be installed by 2009. There are also plans for installations off Orkney in Scotland and Cornwall in England. As waves travel along the 140-metre length of the snakelike Pelamis, its hinged joints bend both up and down, and from side to side. This causes hydraulic rams at the joints to pump hydraulic fluid through turbines, turning generators to produce electricity. Pelamis generators present only a small cross-section to incoming waves, and absorb less and less energy as the waves get bigger. This might seem odd, but most of the time the devices will not be operating in stormy seas—and when a storm does occur, their survival is more important than their power output."

Since the Pelamis device is submerged beneath the ocean's surface, it is aesthetically more acceptable than some other designs now being considered (pictures are available at the article's link). Surprisingly, the design selected to be installed the California coast one of the semi-submerged designs.

"The Aquabuoy, designed by Finavera Renewables of Vancouver, takes a different approach. (This is the device that Pacific Gas & Electric hopes to deploy off the California coast.) Each Aquabuoy is a tube, 25-metres long, that floats vertically in the water and is tethered to the sea floor. Its up-and-down bobbing motion is used to pressurise water stored in the tube below the surface. Once the pressure reaches a certain level, the water is released, spinning a turbine and generating electricity. The design is deliberately simple, with few moving parts. In theory, at least, there is very little to go wrong. But a prototype device failed last year when it sprang a leak and its bilge-pump malfunctioned, causing it to sink just as it was due to be collected at the end of a trial. Finavera has not released the results of the trial, which was intended to measure the Aquabuoy’s power output, among other things. The company has said, however, that Aquabuoy will be profitable only if each device can generate at least 250kW, and that it has yet to reach this threshold."

According to the article, the "bobbing" idea seems to be popular among designers, but it is not the only idea being tested.

"Similar bobbing buoys are also being worked on by AWS Ocean Energy, based in Scotland, and Ocean Power Technologies, based in Pennington, New Jersey, among others. The AWS design is unusual because the buoys are entirely submerged; the Ocean Power device, called the PowerBuoy, is being tested off the coast of Spain by Iberdrola, a Spanish utility. The Oyster, a wave-power device from Aquamarine Power, another Scottish firm, works in an entirely different way. It is an oscillating metal flap, 12 metres tall and 18 metres wide, installed close to shore. As the waves roll over it, the flap flexes backwards and forwards. This motion drives pistons that pump seawater at high pressure through a pipe to a hydroelectric generator. The generator is onshore, and can be connected to lots of Oyster devices, each of which is expected to generate up to 600kW. The idea is to make the parts that go in the sea simple and robust, and to keep the complicated and delicate bits out of the water. Testing of a prototype off the Orkney coast is due to start this summer. The logical conclusion of this is to put everything onshore—and that is the idea behind the Limpet. It is the work of Wavegen, a Scottish firm which is a subsidiary of Voith Siemens Hydro, a German hydropower firm. A prototype has been in action on the island of Islay, off the Scottish coast, since 2000. The Limpet is a chamber that sits on the shoreline. The bottom of the chamber is open to the sea, and on top is a turbine that always spins in the same direction, regardless of the direction of the airflow through it. As waves slam into the shore, water is pushed into the chamber and this in turn displaces the air, driving it through the turbine. As the water recedes, air is sucked back into the chamber, driving the same turbine again. The Limpet on Islay has three chambers which generate an average of 100kW between them, but larger devices could potentially generate three times this amount, according to Wavegen. Limpets may be built into harbour breakwaters in Scotland and Spain."

Those designs are the ones closest to deployment, but The Economist indicates that other designs are on the drawing boards. The reason there are so many designs, the article laments, is that finding one that maximizes the power of waves remains illusive.

"Dozens of wave-energy technologies are being developed around the world: ideas, in other words, are not what has held the field back. So what has? Tom Thorpe of Oxford Oceanics, a consultancy, blames several overlapping causes. For a start, wave energy has lagged behind wind and solar, because the technology is much younger and still faces some big technical obstacles. 'This is a completely new energy technology, whereas wind and photovoltaics have been around for a long time—so they have been developed, rather than invented,' says Mr Thorpe. ... Once interest in wave power revived earlier this decade, practical problems arose. A recurring problem, ironically enough, is that new devices underestimate the power of the sea, and are unable to withstand its assault. Installing wave-energy devices is also expensive; special vessels are needed to tow equipment out to sea, and it can be difficult to get hold of them. 'Vessels that could potentially do the job are all booked up by companies collecting offshore oil,' says Trevor Whittaker, an engineer at Queen's University in Belfast who has been part of both the Limpet and Oyster projects. 'Wave-generator installation is forced to compete with the high prices the oil industry can pay.' Another practical problem is the lack of infrastructure to connect wave-energy generators to the power grid. The cost of establishing this infrastructure makes small-scale wave-energy generation and testing unfeasible; but large-scale projects are hugely expensive. One way around this is to build a 'Wave Hub', like the one due to be installed off the coast of Cornwall in 2010 that will provide infrastructure to connect up wave-energy arrays for testing."

Thorpe goes on to warn that we should expect some spectacular and costly failures going forward and he fears that such failures could set back development another generation. Despite all of these challenges, however, The Economist notes that big utility companies are starting to consider wave power seriously and venture capitalists are beginning to jump on board. There doesn't appear to be a single design destined to sweep the field, which means that R&D is likely to continue for the next several decades before any true breakthrough is achieved.

The Comeback of Electric Cars

Conspiracy theorists have long rumored that solitary inventors, toiling in their garages and basements, have created technologies that can make internal combustion engines (choose your favorite): (1) run on water, (2) achieve gas mileage of over 100 mpg, (3) run on garbage (like in the movie Back to the Future), and so forth. The conspiracy involved in these rumors is that the big auto makers and oil companies have bought the technologies and silenced the inventors. 'Twere it only true. I guarantee that the big auto and oil companies, which are now under heavy criticism, would be trotting out these inventions and declaring themselves heroes. That is especially true for big auto makers, some which are drowning in debt. General Motors has invested heavily in hydrogen technology, but widespread use of hydrogen is years way at best. In the meantime, hybrid cars are selling like hotcakes and electric cars are getting a lot more attention. The latest individual to jump on the bandwagon is the presumptive Republican presidential nominee John McCain ["McCain Proposes $300 Million Prize for Electric-Car Advance," by Michael D. Shear, Washington Post, 24 June 2008].

"Sen. John McCain [has] proposed a $300 million prize, paid by the government, for the inventor of a better battery to power electric or hybrid vehicles, with the goal of spurring innovation to get Americans off their gasoline habit. The Republican presidential candidate proposed the reward -- which equates to about $1 for every person in America -- along with tougher mileage standards for automakers and large tax credits for the purchasers of alternative-fuel, hybrid or electric cars. ... The $300 million prize would be given for 'the development of a battery package that has the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars,' he said."

In a recent online BusinessWeek article, Matt Vella writes about a new electric car on the market that hopes to make it big ["The Electric Car Lives," 16 June 2008].

"Clean, quiet, and relatively profitable to produce, electric vehicles have had a rough start in the U.S.: Five years after General Motors nixed its innovative EV1 electric car program, just a handful of automakers have committed to making and selling electric vehicles on a mass scale any time soon. Enter Think Global, a Norwegian upstart plotting a U.S. invasion via pint-size, affordable electric cars. Think has been selling gas-free, Lilliputian city cars in Europe and will start peddling them to fuel-crunched Americans in 2009. The company's newly formed North American division has high hopes for Think's existing models—and even higher ones for the upcoming Th!nk Ox, a concept unveiled at the Geneva International Motor Show earlier this year."

That fact that Think Global is a Norwegian company demonstrates that even oil producing nations are starting to see the end of the oil economy. Norway has been remarkably far-sighted in investing its oil profits so that it will continue to prosper after its oil runs out. This long-view philosophy undoubtedly encouraged Think Global to get into the electric car business. According to Vella, the Ox may fill a niche that is missing in the current U.S. auto market.

"An electrified people's car for the 21st century, the Ox is a preview of Think's next-generation production vehicle, due out in 2011. Roughly the size of a Toyota Prius, the Ox can travel between 125 and 155 miles before needing a recharge, and zips from zero to 60 miles per hour in about 8.5 seconds. Its lithium-ion batteries can be charged to 80% capacity in less than an hour, and slender solar panels integrated into the roof power the onboard electronics. Inside, the hatchback includes a bevy of high-tech gizmos such as GPS navigation, a mobile Internet connection, and a key fob that lets drivers customize the car's all-digital dashboard. Pricing has yet to be announced, but the company's current vehicles cost less than $25,000. ... The Ox's killer app could be its design. To date, most electric cars available in the U.S.—small, unsafe, and underpowered—have been intended strictly for the earliest early adopters and the most faithful green believers. In contrast, Think's senior vice-president for design, Katinka von der Lippe, says the Ox is a 'real car, a big step away from the cuteness of [other] electric vehicles.' All that distinguishes the Ox from name-brand, fuel-sipping compact cars, in fact, is its silent hum and zero emissions. The Ox also embodies the characteristic simplicity of Scandinavian design, featuring uncomplicated lines and clean, uncluttered surfaces. A band of unpainted metal stretches from the front of the vehicle to its rear, revealing the Ox's interior architecture, an aluminum frame. An unassuming grille is tucked between sophisticated sloping headlamps. 'The Ox is a leap forward for the design of electric cars,' says von der Lippe."

Not everyone is sanguine that the electric car will sell in America.

"The American market for electric vehicles 'is virtually nonexistent,' says John O'Dell, a senior editor specializing in green vehicles for car-buying site Edmunds.com. Even well-established gas-electric hybrids such as the Prius and Honda's Civic account for barely 3% of U.S. auto sales. 'Until you've got a compelling product, you won't have a market,' adds O'Dell. Aside from the sleek Tesla Motors Roadster, which carries a price tag of nearly $100,000, there are almost no fully functional electric vehicles that meet average drivers' requirements. The Ox could fill that gap. 'It'll take a lot of time,' Wilber James, RockPort's managing general partner and acting president of Think North America, says of the challenge of selling electric vehicles to American drivers, who still overwhelmingly prefer trucks to thriftier small cars. 'We're going to focus at first on niche markets—cities, universities, and fleets.'"

It might not be as difficult to break into the market as some think. In some states hybrid cars are selling above sticker price. Although hybrid car sales are predicted to remain flat this year, the problem is on the supply side not the demand side. Shortages of key components such as the hybrid batteries are reportedly dampening sales. According to the Los Angeles Times, "Sales of hybrid cars surged 25% during the first four months of this year compared with the same period last year. And the pace accelerated last month, when sales jumped 58%. That outpaced the overall April sales gain of 18% for small fuel-efficient cars and comes as total new-vehicle sales are slumping." ["Hybrid sales are zooming," by Martin Zimmerman, 23 May 2008] In concluding his article on the Ox, Vella discusses its innovative business model.

"The company's business model, says James, is similar to that of PC maker Dell, which fueled its rise by ruthlessly optimizing its manufacturing and supply chain. Think's ultralean manufacturing system lets it build production facilities for about $10 million, compared with the billions invested in new plants by old-line manufacturers. That means more factories closer to customers, further cutting costs. In addition, factories 'could also be the retailers,' says James, which would add a unique element to Think's branding. The company, he says, will be profitable if it can sell 10,000 vehicles a year. At 20,000 to 30,000 units in annual sales, Think can cut its component costs in half. That focus on innovative manufacturing, in addition to the high-tech Ox itself, may ultimately set the company apart from previous attempts—and, Think is betting, finally help jump-start the U.S. market for electric cars."

There are people, of course, who need cars that go further than 150 miles and can't be delayed for an hour waiting for the batteries to recharge. That is why McCain's proposal to offer a prize for better battery technology plays a role in the future. It may take a while for electric cars to catch on, but for most people, most of the time, I suspect they would suffice. It's those long cross-country treks that keep tripping up sales. Once manufacturers figure out how a family can take a long vacation in an electric car, I suspect sales will soar.

Creating a Sustainable Future

Nearly two decades ago, MIT professor Peter Senge wrote a best-selling business book that introduced the notion of "learning organizations." [The Fifth Discipline, New York: Doubleday, 1990]. "As he describes it, a learning organization is one in which 'people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning to see the whole together.' Such organizations tend to be more flexible, adaptive, and productive—critical qualities in a time of rapid change." ["Peter Senge's Necessary Revolution," BusinessWeek online, 11 June 2008]  Almost every entrepreneur wants to create a company whose environment fosters innovation, its employees are self-motivated, and everyone understands and works toward a common goal. It's not as easy as it sounds, but it is critical for success. Senge has now directed his attention and intellect toward broader collaborative enterprises and has published the results in his new book The Necessary Revolution: How Individuals and Organizations Are Working Together to Create a Sustainable World (New York: Doubleday, 2008). According to the BusinessWeek article:

"Senge and his co-authors grapple with the daunting environmental problems we face, and highlight innovative steps taken by individuals and corporations, often in partnership with global organizations such as Oxfam, toward a more sustainable world."

The article, which is primarily excerpts from an interview with Senge, introduces Senge's reflections by noting how his first book relates to the second.

"It may seem surprising that an expert in management and organizational change is focusing on sustainability, but there is a strong connection to Senge's work. In his earlier book, he laid out an approach to management that combines systems thinking, collaboration, and team learning. ... In The Necessary Revolution, Senge applies the same thinking to a system bigger and more complex than the organization: global society. The book is a call to arms, an argument to business leaders that they must rethink their approach to the environment or, as one executive told Senge, 'we won't have businesses worth being in in 20 years.' But the authors don't linger on the problems, focusing instead on the stories and insights of successful innovators, on creative solutions, and on practical approaches to meeting these challenges."

As noted above, the bulk of the article consists of excerpts of an interview with Senge conducted by Jessie Scanlon in Senge's office. The interview was focused on "the critical role that business will play in the coming revolution, the visionary leaders at companies such as Nike and Costco, and the future of the corporation." The first question was why he titled the book The Necessary Revolution. Senge replied:

"I don't really like the word 'necessary' because it makes it seem we have no choice. On the one hand, we don't. There's only so much water in the world. There's only so much topsoil. There's only one atmosphere, so there's only so much CO2 that can be stuffed into the atmosphere. But real change occurs when people make choices. We're not going to get out of the predicament that we're in by a lot of teeny incremental things. It's going to take bold ideas. The word 'revolution' was meant to be in the spirit of the Industrial Revolution. Not a political revolution because this absolutely has to be a nonpartisan issue. The future doesn't belong to one party or another."

I have been arguing for some time that in order for industrial age organizations to transform into information age globally integrated enterprises they are going to have to shed industrial age thinking and structures. Senge similarly argues that the many industrial age beliefs are going to have to be abandoned. He explains:

"One industrial age belief is that GDP or GNP is a measure of progress. I don't care if you're the President of China or the U.S., if your country doesn't grow, you're in trouble. But we all know that beyond a certain level of material need, further material acquisition doesn't make people happier. So you have a society predicated on the idea that you have to keep growing materially, and yet nobody actually believes it."

Scanlon also asked Senge if he had discovered any patterns about the kinds of people that are leading the charge in the "necessary revolution." He indicated he had.

"The first is obvious: People have to be passionate. These are innovators in a fundamental sense, and innovators innovate because there is something that they are passionate about. Second, they all in different ways were able to step back and see a bigger picture. This is a huge challenge for people in companies, because so many companies are dominated by short-term perspective and because lots of people in key positions simply aren't very good or don't care very much about the bigger picture. Watch how the decisions are made. Are they thinking of the value of the company 10 years after they retire, or are they thinking about the value of their stock options this year? The other two things we focused on are the ability to connect with lots of people and collaborate across boundaries—you could call it high levels of relational intelligence. The final element that we saw again and again is a shift [in strategy] away from 'we've got to stop doing x, y, or z' and all the negativism that tends to pervade these issues."

For those familiar with studies about innovation, all of this should sound familiar. Most innovators are motivated by ideas more than profits. Seeing their ideas implemented is what keeps their fires stoked -- sometimes to the point of personal exhaustion. Senge's point about seeing the big picture is also well known. Every good book on innovation or change management stresses the importance of vision and how to communicate that vision to others so that it permeates the entire organization. Sometimes that process is called alignment. Next Senge talks about connectivity and collaboration -- generating what Frans Johansson calls the "Medici Effect." Finally, he talks about attitude. Entrepreneurs and innovators are, by nature, optimistic people. It is that sense of optimism that attracts both capital and people to their causes. A company filled with skeptical or negative people will never find a vision large enough to position it properly for the future.

Scanlon asked Senge how else companies must change beyond being able to practice what Peter Schwartz calls "the art of the long view"? He responded:

"You go to any MBA program, and you will be taught the theory of the firm, that the purpose of the firm is the maximization of return on invested capital. I always thought this was a kind of lunacy. A well-managed business will have a high return on invested capital. But that's a consequence. It's not a way to manage a business. I remember a great quote of Peter Drucker. He said: 'Profit for a company is like oxygen for a person. If you don't have enough of it, you're out of the game. But if you think your life is about breathing, you're really missing something.' The purpose [of an enterprise] is never making money. And I think a lot of the best innovators inside big companies, the reason they succeed is that they really understand the theory of their business."

Although that sounds a bit confusing -- i.e., understanding the differences between "economic theory of the firm" with the "theory of business" -- Senge provides an example of what he means.

"Costco is about long-term, reliable, quality supply. It's the key to the business. When the woman who got the Food Lab work embedded in Costco first started talking about the predicament of farmers, people were a little suspicious. They thought the predicament of farmers is a big problem in the world. That's why there are charities, and that's why we give money to charities. They couldn't see the connection to their business until she got them to see that they wouldn't have long-term quality supply if farming communities were destroyed. So she connected the issue to the theory of their business—but not the economic theory of the firm. Well-managed businesses could not possibly have gotten where they are believing this [economic theory of the firm] nonsense."

The excerpted interview concludes with responses to three quick questions: Where are we in the revolution? What role can governments play? and, Are businesses inherently more global?

"[In answer to the first question,] we're pretty much in the beginning. I can certainly say that from the 10 years since we organized this network, the people who joined were small bands of radicals in their companies, even if they were senior. But in virtually all of those companies, those people aren't radicals anymore. There are wild cards obviously: major economic decline. Innovation requires resources to invest, and you can see many companies pulling back and going into an intense protective mode in a major extended period of financial distress. [As for the second question concerning governments,] if you are realistic about how our present society works, the economic clout—and a lot of the political clout, frankly—is in the business sector. And it's the locus of innovation. But you've got to build these networks. I think Paul Hawken's recent book, Blessed Unrest: How the Largest Movement in the World Came into Being and Why No One Saw It Coming (Viking Press, 2007) was on the money. The growth of the civil society is historic, and in some ways it's a response to the inability of government to deal with these kind of issues. Governments, especially democratic ones, are short-term and nationalistic. These problems are long-term and global. [Finally, in response to the question about the global nature of businesses,] yes, they're global, and because they're global they've begun to build partnerships across their value chains. But I don't think business is sufficient. We're going to see a lot of partnerships, as companies partner with global organizations like the World Wildlife Fund and Oxfam and, eventually, with governments."

In other posts, I've referred to some of the points Senge made -- particularly the importance of connectivity. Be it connectivity within a globally integrated enterprise or between communities of practice (Senge's last point). Almost every economist will tell you that national economic policies don't carry the same weight they used to because so much of the economy is interconnected globally. Still, governments must play a role in helping develop solutions to global challenges. Trying to isolate one's nation from such problems only exacerbates the situation and demonstrates a lack of leadership unworthy of the trust placed in governments by their citizens. Senge's point, I believe, is that the connected citizenry of the world are not going to allow the inaction of governments to stop their attempts to address growing challenges. The fact that they feel empowered to do something is one of the characteristics of the information age.

Senge's book, which is co-authored by Bryan Smith, Nina Kruschwitz, Joe Laur, and Sara Schley, is divided into seven parts: Endings, New Beginnings; The Future is Now; Getting Started; Seeing Systems; Collaborating Across Boundaries; From Problem Solving to Creating; and, The Future. Within those sections are intriguing sub-section titles like: New Thinking, New Choices; Never Doubt What One Person and a Small of Co-Conspirators Can Do; Risks and Opportunities: The Business Rationale for Sustainability; The Tragedy and Opportunity of the Commons; The Imperative to Collaborate; Innovation Inspired by Living Systems; and The Future of Us. The book should be a good read and I wouldn't be a bit surprised if it doesn't inspire a post or two in the future.

R&D in the Intelligence Community

This past April I wrote a blog entitled Happy Birthday DARPA that focused on an article celebrating that agency's 50th anniversary. DARPA has been a remarkably successful agency with a notable number of scientific and technological achievements that can be traced back to research it sponsored. Stephen Barr, on whose column I focused in that blog, wrote this about the agency:

"Unlike most federal agencies, DARPA operates with little red tape. It has only two management layers, encouraging the rapid flow of ideas and decisions. About 240 people work at DARPA, and 120 of them are program managers and office directors on appointments of four to six years. The agency does not own or operate labs, but sponsors research carried out by industry and universities. By rotating technical professionals every few years, DARPA has 'a constant freshness of people and energy,' Tether said. 'Everything else we do stems from that.'"

Apparently the intelligence community has suffered from "agency envy" and it has now established an R&D activity of its own ["Intelligence Agency Joins U-Md. Research Center," by Anita Huslin, Washington Post, 15 June 2008].

'The University of Maryland's newest tenant is not in the business of advertising its existence or its work. The Intelligence Advanced Research Projects Activity is the new corollary of the military's Defense Advanced Research Projects Agency, created in 1958 in the wake of the Sputnik launch to develop new defense technologies. Among other things, DARPA's work led to the development of the Internet, global positioning systems and unmanned aircraft. IARPA is expected to perform similar work for the 16 U.S. intelligence agencies."

The intelligence community certainly has a requirement for an advanced research arm. Obtaining, sharing, and analyzing data so that it can be turned into actionable intelligence has always been a daunting challenge. In the information age, it has become almost impossible to keep up with the mountains of data that can be generated and with the technologies potential adversaries can use to conceal their activities. Don't expect to hear a lot of fanfare about IARPA. It will gladly operate as quietly as DARPA has operated over the past fifty years.

"IARPA is temporarily located in the university's Center for Advanced Study of Language, which is supported by the National Security Agency and, among other things, teaches Arabic to Iraq-bound Marines and researches cross-cultural interrogation techniques. Ground is expected to be broken this summer on IARPA's new digs: a 120,000-square-foot sensitive compartmentalized information facility designed to provide the highest level of security for government intelligence work. It will be in the university's M Square research park, just off campus. Similar to DARPA, in a nondescript, unlabeled brick building in Arlington, IARPA is not expected to advertise its presence, nor are officials permitted to discuss any details about it."

Although it may conduct its business quietly, its economic impact on the university and the surrounding community is expected to be big.

"This is what the region's first research park has been waiting for, members of the university and research community say. 'Projections are, it's going to become an enormous enterprise and there will be undoubtedly lots of companies, both as contractors and otherwise, that will locate around the building,' said William E. Kirwin, chancellor of the University of Maryland system. 'I think it will be substantial,' University of Maryland president C.D. Mote Jr. said of the new IARPA presence. 'This is expected to be the premier supporter of the most advanced thinking in far-reaching intelligence research -- new stuff that hasn't been thought of.'"

It's not just that intelligence community is establishing a research activity that is generating all of this enthusiasm it's the fact that it is bringing money with it.

"What does that mean in terms of budgets, employees, contracting jobs? No one at the university can say. And the agency's new director, who just recently put up help-wanted postings on the Internet for her top three project management jobs, is not available to talk about it, according to a spokeswoman for the Office of the Director of National Intelligence. The organization's budget is classified. In seeking congressional funding for the agency, officials last year said that IARPA will be significantly smaller than DARPA, which has a $3 billion annual budget. Its staff will consist of 35 national intelligence and 21 CIA employees, and research will be outsourced to contractors. Focuses will be language processing, quantum science, nanotechnology, biometrics, deception detection, counter-biological warfare and tagging, tracking and locating."

According to Huslin, IARPA will operate using the same philosophy embraced by DARPA. It will promote high risk, high payoff ideas.

"Last month, in an interview with the technology trade group IEEE, IARPA Director Lisa Porter suggested that the agency's new location at the University of Maryland indicates that it will be open to people and organizations, like academia and industry, that traditionally may not be able to access the intelligence research world. 'It sends a nice message that we're embracing the broad community to help us solve these challenging problems,' she told the IEEE. 'This is a great place for people with a great idea. It's really risky, the potential payoff is huge, and failure is okay -- that kind of environment is pretty hard to find.'"

Porter is right that it is difficult to find an environment where failing is "okay." Every credible study about innovative organizations concludes, however, that failure must be viewed as part of the learning process if the organization is going to foster an environment where people feel secure in pursuing their wildest ideas. Such an environment will attract innovative people like moths to a flame and that is exactly what the intelligence community is hoping to do. I suspect that the innovations that come out of IARPA will have an impact far beyond the confines of the intelligence community. That has certainly been the case with DARPA innovations.

Changing the World from the Edges

As I have noted in previous posts on innovation, many of the most interesting ideas come from the edges of various disciplines, especially when those edges butt against the edges of other disciplines. Sometimes disciplines are deliberately brought together to produce the "Medici Effect" and sometimes it happens by chance. John Hagel and John Seely Brown, writing for BusinessWeek, report how "impassioned student-led movements for social change can teach executives about innovation." ["Changing the World from the Edge," 30 May 2008, online article] They begin their column by recalling events taking place on the UC Berkeley campus four decades ago.

"Forty years ago, in May, 1968, protests, demonstrations, and marches—not all of them peaceful—put students at the University of California, Berkeley, at the forefront of the antiwar, free speech, and civil rights movements. Today, Cal Berkeley is again in the vanguard as a new generation of student activists emerges to help address some of the most pressing social issues of our era: energy efficiency, Third World poverty and disease, and sustainable housing, among others. The quiet activism pursued by today's activists may not generate as many headlines as the actions of their well-known predecessors, but they may ultimately have greater impact as they mobilize the edge to transform the core."

Hagel and Brown report that the students are getting help with their activism from the university's administration.

"A key catalyst for this new generation of student activism is Tom Kalil, special assistant to the chancellor for science and technology at UC Berkeley. Kalil, formerly an official in President Bill Clinton's White House, has the specific charter of helping foster initiatives on the edge of multiple academic disciplines, including information technology, nanotechnology, and biology. Kalil has two tightly linked aspirations. First, to transform academic institutions by mobilizing engaged and empowered students. Second, to transform society by taking on some of the most challenging social problems and connecting resources across a variety of edges to come up with innovative and high-impact solutions. From Kalil's perspective, tackling difficult social problems like environmental pollution, inadequate health care, and sustainable development will be much more successful if the energy and creativity of engaged students can be unleashed."

For long-time readers of this blog, you know that I believe Kalil is on the right track by traveling the edges of disciplines looking for interesting ideas to connect and promote. I'm just as impressed that the solutions for which Kalil is searching address "difficult social problems." While profit is undoubtedly a motive (and it should be), tapping the youthful idealism of young minds will likely provide greater motivation than monetary reward alone. According to Hagel and Brown, Kalil has used a three-pronged strategy.

"To achieve these aspirations, Kalil has fostered three related initiatives. First, in 2006, he helped launch the Big Ideas contest at Berkeley in collaboration with the student government and various research centers across Berkeley's campus. With seed funding provided by Pierre Omidyar's Network Enzyme Program and support from companies such as AT&T (T), the contest has become an annual event, offering students $170,000 in prizes to come up with creative ideas for tackling 'grand challenges.' Second, Kalil helped organize the Big Ideas @ Berkeley Marketplace, an online forum, to increase the visibility of promising ideas and connect specific student projects with interested alumni and potential donors to make tax-deductible donations and in-kind contributions. Third, he has gathered resources to help mentor, coach, and inspire student leaders. Kalil always asks students what they would do if they were no longer limited by their resources, which encourages them to think on a larger scale. He also works with a large network of individuals and institutions, both on and off campus, to help with strategic planning, fundraising, and recruiting additional partners."

In other words, Kalil is creating a mini-globalization system by connecting people, resources, and capital to help push promising ideas forward. The strategy seems to be working. Hagel and Brown report:

"These attempts to mobilize and support the edge are beginning to yield significant results. Initially, the impact has been greatest within the academic institution. A number of student-led initiatives have been mobilized and have focused resources across traditional disciplinary and institutional boundaries on the campus. One example—backed by Kalil—is the Berkeley Energy & Resources Collaborative (BERC), a student-led initiative designed to connect academic resources focused on cleantech. This 700-member collaborative brings together students and professors from such diverse disciplines as law, chemistry, engineering, and business, and builds bridges into the larger San Francisco Bay Area cleantech entrepreneurial community. In addition to organizing an annual Energy Symposium, the student leaders of this collaborative have also persuaded Berkeley faculty to launch a new Center for Energy & Environmental Innovation (CEEI)."

The initiatives have also led to a push for more interdisciplinary courses -- mini-Medici Effect incubators for studying cross-sector ideas.

"The collaborative and CEEI are supporting student-led initiatives to design and offer new interdisciplinary courses at Berkeley addressing such topics as 'energy and infrastructure project financing" and "energy, sustainability, and business innovation.' These initiatives are particularly exciting because UC Berkeley and the Lawrence Berkeley National Lab have joined forces to become the 'Bell Labs' of clean energy research, and have started major new research programs such as the $500 million Energy Biosciences Institute, and other efforts in photovoltaics and zero-energy-use buildings. By attracting students interested in becoming cleantech entrepreneurs, BERC will help accelerate the transition of energy technologies from the lab to the marketplace. The Big Ideas contests have also promoted the adoption of a new form of collaboration invented by students, known as 'idea labs.' These idea labs, organized by the students themselves, bring together graduate students with shared interests in such areas as photovoltaics, green-collar jobs, and energy efficiency. For example, the photovoltaics idea lab is accelerating the pace of academic research by bringing together 30 graduate student researchers in nine different labs across campus to share early results and explore implications for future research."

There is likely to be a huge marketplace for clean technologies in the coming decades. Getting some of America's best and brightest students interested in the science behind those technologies will pay dividends far beyond the Berkeley campus.

"One example of early impact is an initiative led by Berkeley engineering students to develop a water filter to help residents of slums in Mumbai battle the spread of diarrheal diseases. Collaborating with women's groups in Mumbai, Berkeley students have designed an innovative 'point of use' system for water treatment that costs under $10 and can be made with local materials. The Berkeley students have already begun to engage Indian MBA students to develop a plan for marketing, distribution, and scale-up of production."

The other valuable thing that happens when students get involved solving real-life challenges is that they begin to understand how complex the world can be and that they must deal with that complexity if they want their ideas to have impact.

"The students quickly realized technology innovation was only a small part of the need. Over time, the Berkeley students have helped recruit volunteers from local Mumbai colleges to support water-quality testing initiatives and the design and delivery of educational programs. These educational programs are delivered through street plays and local women's self-help groups in the most hard-hit areas, to build awareness of the link between contaminated water and dysentery. The students have also had to negotiate with authorities such as slum lords, government representatives, and local leaders and organizations. The need to face these very practical issues regarding widespread adoption and use of the technology has broadened student awareness of the range of disciplines and expertise required to achieve real results. It has also taught them crucial lessons about how to have influence without authority, in part by mobilizing the edges rather than directly confronting core power structures."

Trying to generate "influence without authority" is a challenge that faces millions of people in frontier economies. It's equivalent to the challenge that Muhammad Yunus confronted when he saw poor people who were trying to improve their economic conditions without access to credit. The resulting microloan strategy created by Yunus may well find a companion strategy from the efforts of UC Berkeley's students. Their success has spawned even more success.

"The intense experiences of these students as they encountered these challenges on site in Mumbai not only strengthened their commitment and engagement, but helped catalyze broader support for their initiatives. Impressed by the experiences of these and other student leaders interested in safe drinking water, the newly established Blum Center for Developing Economies has agreed to provide more than $600,000 for the Mumbai project and other initiatives on safe drinking water—using technologies such as ultraviolet light to kill pathogens and low-cost electrochemistry to remove arsenic from drinking water in Bangladesh. More than 100 other student-led innovation initiatives in such areas as microclinics for disease management, commercialization of nanotechnology research, telemicroscopy for disease diagnosis, efficient cookstove design for refugee camps in Darfur, and new financing mechanisms for investment in energy efficiency are well under way and illustrate the broad scope of innovation."

Hagel and Brown conclude their article by answering the questions: "What does all of this mean for business executives?" and "What lessons can business executives take from these edge innovation programs?" They write:

To transform the core, start at the edge. For many executives, when core business activities require fundamental change, the strong instinct is to embark on massive organizational changes. These organizational transformations rarely succeed. An alternative path is to start on the edge and move back into the core over time. By engaging the edge first, it is often possible to find innovative leaders with energy and passion to try new approaches. Inertial forces are weaker on the edge because there are fewer entrenched interests.

Demographic edges are a deep source of energy and creativity. New generations of workers are coming into companies wanting to make a difference. Innovation and change critically depend on tapping into this energy and creativity. Senior executives need to find more effective mechanisms to connect with the younger generation within their workforce and inspire them with the opportunities for achieving change.

Innovation is not just about ideas, it is about impact. Too often, discussions on innovation focus narrowly on idea-generation. From our experience, idea-generation is rarely the bottleneck. Survey any large company and you'll find a multitude of big ideas are percolating at various levels of the organization. The key is how to make these ideas more visible, how to mobilize support for the most promising ideas, and how to scale the development and deployment of the ideas.

Achieving results requires making connections across multiple edges. Enormous resources are available to drive innovation, but they are fragmented and isolated within various disciplinary and institutional silos. A common theme of the innovation initiatives led by Berkeley students has been the need to inventory relevant resources and find creative ways to connect these resources. The challenge has been to move well beyond the academic institution itself and find creative ways to connect with entrepreneurial talent in companies and nongovernmental organizations (NGOs) of various types around the world. By bridging the edges that define our daily lives, we may indeed change the world.

One of the reasons that I have found working in Iraq so exciting is that it is work at the edges of globalization. That work also demands that you work with people in numerous sectors to create holistic solutions to the problems that exist. As I've written before, innovation is a combination of ideas and implementation. An unimplemented idea is simply an unfulfilled dream. There are a lot of dreamers in the world. There are not quite as many doers. The beauty of the program at the University of California Berkeley is that it is helping create a generation of doers.

Looking towards the Future with Ray Kurzweil

Like most entrepreneurs, I am fascinated with the future because of all the possibilities it holds. Frankly, it's sometimes a challenge maintaining focus on building one business because I see business opportunities almost every day and each of them excites me. Whenever an opportunity appears viable for my current business, I grab it. I suspect in that way I'm like a lot of other entrepreneurs. One man who has been both an entrepreneur and visionary since he was a young lad is Ray Kurzweil. I think I've mentioned him before in a post or two. His current mantra is "live long enough to live forever." John Tierney, writing the science section of the New York Times, provides a glimpse of what Kurzweil is currently thinking about the future ["The Future Is Now? Pretty Soon, at Least," 3 June 2008]. Tierney begins his article with a few of Kurzweil's current predictions:

"Do you have trouble sticking to a diet? Have patience. Within 10 years, Dr. Kurzweil explained, there will be a drug that lets you eat whatever you want without gaining weight. Worried about greenhouse gas emissions? Have faith. Solar power may look terribly uneconomical at the moment, but with the exponential progress being made in nanoengineering, Dr. Kurzweil calculates that it’ll be cost-competitive with fossil fuels in just five years, and that within 20 years all our energy will come from clean sources. Are you depressed by the prospect of dying? Well, if you can hang on another 15 years, your life expectancy will keep rising every year faster than you're aging. And then, before the century is even half over, you can be around for the Singularity, that revolutionary transition when humans and/or machines start evolving into immortal beings with ever-improving software."

Those prognostications alone should provide enough meat to chew on over drinks with friends some evening! Normally if something sounds too good to be true, it probably is; but, Kurzweil has a pretty good record of predicting the future.

"It may sound too good to be true, but even his critics acknowledge he's not your ordinary sci-fi fantasist. He is a futurist with a track record and enough credibility for the National Academy of Engineering to publish his sunny forecast for solar energy. He makes his predictions using what he calls the Law of Accelerating Returns, a concept he illustrated at the [2008 World Science Festival] with a history of his own inventions for the blind. In 1976, when he pioneered a device that could scan books and read them aloud, it was the size of a washing machine. Two decades ago he predicted that 'early in the 21st century' blind people would be able to read anything anywhere using a handheld device. In 2002 he narrowed the arrival date to 2008. On Thursday night at the festival, he pulled out a new gadget the size of a cellphone, and when he pointed it at the brochure for the science festival, it had no trouble reading the text aloud. This invention, Dr. Kurzweil said, was no harder to anticipate than some of the predictions he made in the late 1980s, like the explosive growth of the Internet in the 1990s and a computer chess champion by 1998. (He was off by a year — Deep Blue’s chess victory came in 1997.)"

In part, Kurzweil bases his predictions of the future on the trends of the past.

"'Certain aspects of technology follow amazingly predictable trajectories,' he said, and showed a graph of computing power starting with the first electromechanical machines more than a century ago. At first the machines' power doubled every three years; then in midcentury the doubling came every two years (the rate that inspired Moore's Law); now it takes only about a year. Dr. Kurzweil has other graphs showing a century of exponential growth in the number of patents issued, the spread of telephones, the money spent on education. One graph of technological changes goes back millions of years, starting with stone tools and accelerating through the development of agriculture, writing, the Industrial Revolution and computers."

You can find the attached image [Click to enlarge] as well as a lot more of Kurzweil's graphs at http://singularity.com/charts/page17.html. Tierney continues:

"Now, he sees biology, medicine, energy and other fields being revolutionized by information technology. His graphs already show the beginning of exponential progress in nanotechnology, in the ease of gene sequencing, in the resolution of brain scans. With these new tools, he says, by the 2020s we'll be adding computers to our brains and building machines as smart as ourselves. This serene confidence is not shared by neuroscientists like Vilayanur S. Ramachandran, who discussed future brains with Dr. Kurzweil at the festival. It might be possible to create a thinking, empathetic machine, Dr. Ramachandran said, but it might prove too difficult to reverse-engineer the brain's circuitry because it evolved so haphazardly."

The Kurzweil prediction that has perhaps received the most scrutiny is what he calls the "Singularity" -- a point when computers become as capable as human brains, even to the point of becoming self-aware. When that happens, and when they start working together (even melding) with the human mind, Kurzweil speculates that knowledge will advance at such a spectacular rate that virtually nothing can be predicted beyond that point. While his is both an elegant and correct use of the term, some people feel there is a Borg-like quality (for you Star Trek fans) about his singularity. The word has its roots in both mathematics and the physical sciences (specifically, cosmology). Both uses are interesting to examine. A mathematical singularity is a point at which a function no longer works in a predictable way. In cosmology, it refers to an event horizon so spectacular or powerful that no useful data is transmitted from it. The most common cosmological examples are the big bang and black holes. The common thread in these three definitions of singularity is that it is impossible to predict anything useful about them or their consequences. Tierney writes:

"Dr. Kurzweil's predictions come under intense scrutiny in the engineering magazine IEEE Spectrum, which devotes its current issue to the Singularity. Some of the experts writing in the issue endorse Dr. Kurzweil's belief that conscious, intelligent beings can be created, but most think it will take more than a few decades. He is accustomed to this sort of pessimism and readily acknowledges how complicated the brain is. But if experts in neurology and artificial intelligence (or solar energy or medicine) don't buy his optimistic predictions, he says, that's because exponential upward curves are so deceptively gradual at first. 'Scientists imagine they'll keep working at the present pace,' he told me after his speech. 'They make linear extrapolations from the past. When it took years to sequence the first 1 percent of the human genome, they worried they'd never finish, but they were right on schedule for an exponential curve. If you reach 1 percent and keep doubling your growth every year, you'll hit 100 percent in just seven years.' Dr. Kurzweil is so confident in these curves that he has made a $10,000 bet with Mitch Kapor, the creator of Lotus software. By 2029, Dr. Kurzweil wagers, a computer will pass the Turing Test by carrying on a conversation that is indistinguishable from a human's."

For those unfamiliar with the Turing Test, it comes from a 1950 paper by Alan Turing entitled "Computing Machinery and Intelligence." It is a proposed test of a computer's ability to demonstrate intelligence. As described in Wikipedia: a human judge engages in a natural language conversation with one human and one machine, each of which try to appear human; if the judge cannot reliably tell which is which, then the machine is said to pass the test. In order to test the machine's intelligence rather than its ability to render words into audio, the conversation is limited to a text-only channel such as a computer keyboard and screen (Turing originally suggested a teletype machine, one of the few text-only communication systems available in 1950)." Interestingly, Turing felt the question about whether machines could think was itself "too meaningless" to deserve discussion. Unfortunately, Turing didn't live to see the emergence of the information age. He died in 1954 at the age of 41. For his part, Tierney is hedging his bets.

"I'm not as confident those graphs are going to hold up for fields besides computer science, so I'd be leery of betting on a date. But if I had to take sides in the 2029 wager, I'd put my money on Dr. Kurzweil. He could be right once again about a revolution coming sooner than expected. And I'd hate to bet against the chance to be around for this one."

If Kurzweil's prediction about the Singularity proves accurate, then even he will have a difficult time predicting what will happen in the second half of the twenty-first century. You can bet on this, however, it will be interesting.

Weeds and Biofuels -- A Warning

My most recent post about biofuels [Cultivating the Right Biofuel] focused on an article by Roger Cohen who is fearful that the connection between increased use of food grains for biofuel and rising food prices will cripple a promising industry that deserves to be fostered. I've written a couple of posts on the connection between rising food prices and the increased production of biofuels [Search for Oil Alternatives Pushes Food Prices Higher and Rising Food Prices take the World's Stage]. I made it clear in the latter post that using food sources to produce biofuel was only one of the reasons that food prices were rising. Cohen was pushing for the use of sugar cane as stock material for creating biofuel. Others have suggested using crops that have little or no potential as a food source [see my post The Potential of Pond Scum]. Some analysts are warning, however, that the search for a non-food source of biofuel could create havoc as well ["New Trend in Biofuels Has New Risks," by Elisabeth Rosenthal, New York Times, 21 May 2008].

"In the past year, as the diversion of food crops like corn and palm to make biofuels has helped to drive up food prices, investors and politicians have begun promoting newer, so-called second-generation biofuels as the next wave of green energy. These, made from non-food crops like reeds and wild grasses, would offer fuel without the risk of taking food off the table, they said. But now, biologists and botanists are warning that they, too, may bring serious unintended consequences. Most of these newer crops are what scientists label invasive species — that is, weeds — that have an extraordinarily high potential to escape biofuel plantations, overrun adjacent farms and natural land, and create economic and ecological havoc in the process, they now say."

I suspect there are a lot of potential consequences from using arable land to grow crops for biofuels (be they a food or a non-food crop). It will take a lot of land to grow enough raw material to make a dent in the overall fuel market. Removing that much land from producing food stuffs isn't going to help lower food prices regardless of what is grown on that land. The hope, of course, is that second-generation biofuel crops can be grown on land that is unfit to grow food crops -- because weeds seem to grow everywhere. That is also the crux of the problem.

"At a United Nations meeting in Bonn, Germany, ... scientists from the Global Invasive Species Program, the Nature Conservancy and the International Union for Conservation of Nature, as well as other groups, presented a paper with a warning about invasive species. 'Some of the most commonly recommended species for biofuels production are also major invasive alien species,' the paper says, adding that these crops should be studied more thoroughly before being cultivated in new areas. Controlling the spread of such plants could prove difficult, the experts said, producing 'greater financial losses than gains.' The International Union for Conservation of Nature encapsulated the message like this: 'Don't let invasive biofuel crops attack your country.' To reach their conclusions, the scientists compared the list of the most popular second-generation biofuels with the list of invasive species and found an alarming degree of overlap. They said little evaluation of risk had occurred before planting."

Many areas of the United States could offer an earful about their unhappy experiences with invasive species of plants of animals. Nutria (large rat-like creatures), for example, were introduced from South America into the United States in the 1930s. They are now a major problem along the Gulf Coast where they damage vegetation and destroy habitat in wetlands. Zebra mussels, which were introduced into U.S. waters from Eurasia in 1988, compete with native species and clog pipes. They are now a problem throughout many of the river systems in mid-America and are continuing to spread. Hydrilla, a native African plant, was introduced into the United States in the 1960s. It crowds out native species and is a problem in most of the U.S. coastline states. Snakehead fish, Africanized bees, cane toads, fire ants, European Gypsy Moths, are just a few of the hundreds (if not thousands) of invasive species creating challenges in America. The point is, the caution being sounded by the analysts is probably justified. As expected, the biofuel industry claims they are crying "wolf."

"The biofuels industry said the risk of those crops morphing into weed problems is overstated, noting that proposed biofuel crops, while they have some potential to become weeds, are not plants that inevitably turn invasive. 'There are very few plants that are "weeds," full stop,' said Willy De Greef, incoming secretary general of EuropaBio, an industry group. 'You have to look at the biology of the plant and the environment where you're introducing it and ask, are there worry points here?' He said that biofuel farmers would inevitably introduce new crops carefully because they would not want growth they could not control."

The conservation analysts fear that growing pressure from governments and the potential for quick profits w