Wednesday, May 19, 2010

Is There Hope Over The Horizon Disaster?

Like so many of my colleagues, friends, and family, I have been struck by the devastation from the massive oil spill in the Gulf of Mexico, where 11 men died working on the Horizon rig.  The loss of human life, entire ecosystems, and the economic impact in the Gulf oil spill is unprecedented, as Time Magazine’s Bryan Walsh writes in The Far-Ranging Costs of the Mess in the Gulf.

Coming after the financial crisis, which is still seriously shaking the world, and before the looming climate change, this disaster is one more example of the terrible difficulty we face having to master complex systems. The reasons for this difficulty are twofold:
#1 - Progress is fueled by Risk. It is in exploring the unexplored that we are improving. It therefore is an endless process of risky discovery.
#2 - Complexity is a moving concept. What was complex a century ago is simple today and what is complex today will be mastered in the future.

In taking risk and pushing the envelope, we increase our understanding of how to deal with increasingly complex systems. Whether we do a good job managing complexity and whether our actions make the world better or worse depends on many factors, including the extent to which we are driven by self-interest versus the common good.

Taking risks means possible loss of control, both of the situation itself and how others perceive it. The very innovative BP Company is experiencing this once again. Should they be blamed for having taken risk? Let’s be honest and say no. Given their engineering excellence we cannot blame them for having tried to explore unexplored areas, because we need this oil and somebody has to try. But we could blame them, if when confronted with this disaster they only search for solutions that preserve their economic interests, instead of “shutting down the damn thing and stopping the pollution.”

For horrible disasters, it is quite important to notice that often, but not always, they ignite a positive reaction in our societies and are followed by creative recoveries, including economic boom. Let’s try then to explore which kind of positive reactions we might expect out of this disaster.
#1 - Based on the fact that oil is going to be more and more difficult to extract, more advanced technologies are needed. We could then expect that innovations like GreatPoint Energy and Bloom Energy will get wide acceptance in the coming years.
#2 – Renewable energies need to reach maturity. They are the necessary complement to fossil fuels but the utility grade market is extremely difficult and costly to reach.  We could expect that more attention will be paid to taking innovations to scale, by strategic and corporate investors as well as policy makers.
"Taking innovations to scale” for new energy and clean water is a domain that Bob Marassa and I are developing. In future blog posts, we will describe and illustrate with real cases what it takes to “take innovations to scale,” in the hope that exchanges with our readers will improve the evolution of this important domain.

Update (June 1, 2010):
I was glad to read a great Op-Ed by David Brooks on the NY Times, titled "Drilling for Certainty" where he had a very similar perspective to this blog post.