Innovation of technology, business models and governance for a sustainable future society

At the Green Sustainable Development Conference which recently took place in Beijing, Jonas Törnblom, coordinator of Swedish School of Governance, spoke about the Innovation of technology, business models and governance for a sustainable future society. The conference was co-hosted by the Nordic Council of Ministers together with The Chinese People's Association for Friendship with Foreign Countries (CPAFFC) and China Urban-townization Promotion Council (CUPC). Read the speech in its entirety below.

By Jonas TörnblomJanuary 29, 2019

Jonas Törnblom, coordinator Swedish School of Governance

Ladies and Gentlemen, Thank you for this opportunity to speak about “Innovation of technology, business models and governance for a sustainable future society”.

Please, let me start with a few words about my background. For the past 30 years I have worked in executive positions in the environmental technology industry. 10 years in Germany and 20 in Sweden. My interest and primary focus have always been product and business development. I have been part of over 20 international patents and patent applications and implemented numerous business and product launches in both Europe, North America and Asia. I have worked in air cleaning and in waste management as well as with bio energy issues. I have also been involved in several larger urban development projects, like Hammarby in Sweden.

Technology development has always been of great fascination to me. Nothing could be more rewarding than to be able to improve people’s lives and the environment with smarter and better technology.  And today this is more important than ever. But I have also come to the conclusion that it is not technology alone that will save the world. The societal challenges that we are exposed to are so complex and interdependent, that no technology alone will fix them.

On the one hand our societies have developed enormous wealth and knowledge over the last couple of decades. China is a good example of that. But, despite this progress we now see that our common natural resources are setting limits to our growth. We need much more efficient use of resources. And we are confronted with challenges that are so new to us and so complex that our society can’t find simple ways to fix them.  

One such issue is of course climate change. When it comes to climate change, however, I don’t see it as unmanageable. New technology to dramatically reduce greenhouse gas emissions are developing very fast. We have much of the technology to reduce global warming below 2 degrees. Climate change mitigation is more of a governance issue than a technology issue today. Several European countries have proven that it is possible to both reduce the carbon footprint and grow the economy. Sweden has reduced its CO2 emissions with 25% since 1990 and at the same time doubled the size of its economy. Renewable energy is today 56% of Sweden’s energy use and the single largest form of energy is bioenergy. And all this has been achieved with “old technology”. The solution has been what we call eco governance. Which is to apply a holistic approach on complex challenges like energy production, distribution and consumption. With cross sectional collaboration and actively exploring synergies we can do a lot with existing technology.

But there are other complex and existential problems that we face. I don’t know if you saw a German report on biodiversity that came out in 2017. The Entomological Society of Krefeld had measured the mass of flying insects in over 60 natural parks in Germany. Their study, which was the 6th most quoted scientific report in the world that year. And it reported that more than 75 percent of total flying insects’ biomass had declined over 27 years in protected areas in Germany. Could you imagine a world with no flying insects? No pollination? No birds?

A number of recent studies have shown that cars are killing billions of insects every year and that our fear of the dark is putting insects and the animals that feed on them at risk. Another likely cause for the loss of insects is habitat degradation.  

I am mentioning this not only because it is a severe problem, but for its complexity. If it only were up to altering pesticides and agricultural methods, we could probably fix it, the same way we fixed CFCs and the ozone hole. But if the cause of loss of insects lies in our urbanization itself, our use of cars, our need for light, then the solution is much more complex. However, we could still do something. The greening of our cities gets another dimension of importance with this background. In Sweden, as in many other places, green roofs have become very popular, not only for creating habitats for insects, but also for cooling our cities and absorbing rainwater. Grey water from showers, dishwashers could also be used to water parks and roofs and be cleaned at the same time. These are good examples of where resources and needs are met creating synergies. The need for energy for cooling of buildings is reduced, storm water is absorbed and waste water is naturally cleaned. And at the same time bio diversity is restored. A good example of Eco Governance and cross-discipline collaboration.

Another challenge that is becoming more and more acute and for which we don’t have an answer is the degradation of social sustainability. The costs for psychiatric diagnosis in Sweden have doubled in less than 10 years and now amounts to 5% of Sweden’s GDP. The sales of antidepressants go up year by year in the western world. Suicide attempts among young people have doubled in the last decade in the US.

Anxiety is the most common ground for mental illness in the US. One in five persons suffer from anxiety. And anxiety is especially apparent in rich countries. A meta-analysis that investigated increased psychopathology in US youth over time concluded a cultural shift towards extrinsic goals, such as materialism and status, away from intrinsic goals such as community, meaning in life and affiliation.

There is a lot of debate about the cause of this sudden increase in psycho-social illnesses. Some blame social media, others blame increasing competition due to globalization.

Whatever reason, in order to change this development, we need new thinking and new cross-sectoral collaborations. I will give you a few examples of how Swedish universities and innovation agencies are promoting collaboration between various actors in order to work out sustainable solutions for these complex problems.

One interesting model is the Stockholm Open Lab. Openlab was founded in 2012 by the City of Stockholm and the Region of Stockholm together with four leading universities, the Royal Institute of Technology, the Karolinska Institute, the Stockholm University and the University of Arts, Crafts and Design, to promote open innovation through master courses, vocational training, workshops and seminars. The core idea of Openlab is to develop solutions to improve and create the conditions for a sustainable society for the City and Region of Stockholm.

Each semester, the two main sponsors present a number of challenges for teams of students. Each team consists of 8-10 students from all four universities. The challenges can be about Stockholm’s water quality, incompatible medication of multi-sick elderly, integration of refugees, traffic jam elimination etc. The student teams develop solution proposals during the semester. At the end of the semester the project results are presented at an open conference. Contact with the public administrations takes place throughout the project period. The schools provide tutors and process coaches. The process completely builds on the “design thinking” method for developing solution proposals. An “Open Lab course” merits 15 points, i.e. runs for one semester at half-speed.

Also, the larger Swedish national innovation institutions like Vinnova, The Swedish Innovation Agency, Formas, The Swedish Energy Authority, Tillväxtverket and others are taking a more holistic approach to innovation, not only by financing incubators and testbeds and demo-sites, but also through assisting in scaling up, development of eco systems and growth financing. These institutions are also supporting collaborations between government authorities and agencies, both on a national and a local level. The aim is to improve innovation support, regulatory advice and approval processes.

I will give you one a concrete example how one of the Innovation agencies works to promote innovation. The Swedish Energy Agency has been financing hundreds of smaller companies to develop technologies and businesses. Despite having good ideas, these companies often lack knowledge in marketing & sales, IPR, financing, internationalization etc. So, the agency is not only financing technical development, but also advisory help, via external consultants. During 2018 I was personally involved in 12 Swedish start-up companies with advice on an hourly basis in these areas. This holistic approach by the Swedish Energy Agency has been very successful. They currently have 98 investments in their portfolio. They have exited 78 companies and have had over 80% survival rate. The 60 million USD that they have invested totally has a market value of one billion USD.

However, more and more we see that the vertical organisations that we build our societies on need to be enhanced with horizontal collaborations. The silo structures, both in the private and in the public sectors are often resource inefficient, and they hinder change and the development of radical new ideas. Therefore, stakeholders from both government, the public and private sector must come together and jointly define the complex challenges we face, form a common vision, decide on goals and implementation strategies. In the field of environment we call this Eco Governance. Hammarby is a good example of this, but there are numerous good examples in the other Nordic countries, too. In these horizontal collaborations new, innovative ideas emerge. And trust among stakeholders and citizens evolve. But the good examples like Hammarby are not spread fast enough. Current organisational structures are too rigid. Budget allocations, mandates, competences, responsibilities, norms and laws hinder these collaborations. The lack the trust between organisations and individuals is another major obstacle. This rigidity hinders the development of much needed new business models and technology innovations.

The need for more cross-disciplinary, horizontal collaboration and the difficulty in adopting good cross-sectional practices is not limited to urban planning. It applies to all sectors of society. We need to be better at learning from good examples, exploring synergies and at changing current organizational structures. Therefore, in May 218 the Swedish Innovation Agency Vinnova decided to finance a feasibility study for a new Swedish School of Governance. A new school that will focus on governing complex and cross-disciplinary processes of change. The goal of the School is to accomplish societal transformation through better problem insight and holistic collaboration. We hope that the School will be in operation by 2020 or 2021. It will have a clear focus on learning from best practices, applying solutions to their local contexts and also promoting new thinking, creativity and innovation. And we look forward to an international cooperation, also with Chinese think tanks, universities and authorities.

Ladies and gentlemen, technology development is important. In fact, it is incredibly important. But we need new holistic approaches for technology development, and we need a better understanding of its consequences. Creativity and innovation are enormously powerful tools that we have. Managed correctly through good governance, we can solve many of the complex and existential problems we are facing – together.

Thank you very much!