Business 3.0

By: Andrew ZolliWed Dec 19, 2007 at 8:18 AM

The oblivious capitalist's days are numbered.

The 6th Annual Fast 50

Apply this insight at a global scale, and things quickly become alarming. As enormous, rapidly growing and developing countries such as China and India seek to swell their middle classes in the coming decades, their energy demands will increase geometrically, not linearly. China intends to add at least 250 million citizens to its middle class, and create a well-to-do society by 2020, with a per capita income for the whole country that's five times the present one. In the meantime, China continues to burn almost one-third of all the coal mined from planet Earth to meet its annual needs, making Chinese cities among the most polluted and China the world's second-largest source of CO₂ emissions. And that's today: What happens when all those new Chinese middle-class consumers decide to drive to work? Are they any less entitled to the lifestyle model we've exported around the globe?

We can't continue indefinitely to cannibalize our life-support systems for spare parts. Environmental researchers like Paul Hawken and Amory and Hunter Lovins estimate that the total "services" that the earth provides to the global economy annually are worth at least $36 trillion, nearly as much as the $39 trillion annual product of civilization itself. The National Academy of Sciences has calculated that human consumption surpassed the regenerative capacity of the planet around 1980, and we are now pushing its systems well beyond their ability to heal. We've got our hands around the golden goose's throat, and we're squeezing.

Yet despite our precarious position, global catastrophe is by no means a foregone conclusion. Well ahead of slower-moving governments, companies of every size and in every part of the world are now waking up to humanity's impending and interlocking crises, and the vastly lucrative rewards that solving them might bring. If humanity has a future, it will rest significantly on these companies and entrepreneurs' ability to create and globally distribute civilization-saving innovations.

As with the Industrial and Information Revolutions before them, the protagonists in the "Eco-Innovation" Revolution will take the field with new approaches, ideas, and technologies that will upend our notions of production, consumption, wealth, and invention. Our current economic system was devised in an era in which labor was scarce and natural resources were abundant. We're moving into an era in which the opposite is true, and that's going to change capitalism's playbook for good.

Here are just a few of the big themes to come.

Solutions for Cities

For the first time in history, more human beings now live in cities than not. Ours is becoming a permanently urban species, and the interwoven challenges of renewable energy, water, poverty, health, greenhouse-gas emissions, and economic and social development will increasingly be addressed at the municipal level.

Virtually all urban growth in the next half-century is going to occur in the developing world, where urban infrastructure is often weak, antiquated, or insufficient--if it exists at all. China is planning to build 20 new major cities each year for the next 14 years, and the ones it already has are growing by 13 million to 15 million people annually. Up to 300 million farmers will move from the countryside in just the next 20 years. How will those cities accommodate this tidal wave of humanity?

Vast wealth is going to be generated by companies that can help answer that question. At the top end, giant industrials like General Electric and Siemens are bulking up their ability to design, finance, build, and run integrated water, clean energy, and security infrastructure projects for these developing metropolises. They're hoping to provide turnkey solutions to expanding cities in the same way ISPs provide infrastructure to rapidly growing Internet startups. And this is the just the tip of the global urban opportunity: GE has already indicated that it plans to get as much as 60% of its future revenue from offerings aimed at the developing world.

At the other end of the spectrum will be new "bottom up" products and services designed for urban contexts with limited or unreliable infrastructure. An early example is StarSight's stand-alone solar-powered lampposts that also offer WiMax wireless mesh networking, and even charging hookups for small devices like cell phones. The StarSight, which is being beta-tested first in Cameroon, is the anchor of a "virtual utility" that simultaneously solves lighting, security, and connectivity problems in environments without a reliable power grid. And StarSight provides a template for bottom-up solutions to come: It is highly decentralized, easily distributed, renewables-based, and solves more than one problem at a time.