How can we take a worldwide crisis and create the most enormous business opportunities? Stefan Hack, Matt Rogers and Paul Carroll think they know how, and this is the subject of their book, released in April 2014, “Resource Revolution: How to Capture the Biggest Opportunity in a Century.” The authors are well versed in understanding business opportunities that may be gleaned from resources. Stefan Hack is a resources economics and innovation teacher at Stanford University, who previously led McKinsey’s Global CleanTech practice and its Sustainable Transformation Practice, while Matt Rogers is a director at McKinsey & Company who previously served as the senior advisor to the US Secretary of Energy for Recovery Act Implementation from 2009 to 2010.
According to the authors there is a great deal of need to find new ways to provide energy. Specifically it is explained that the fast urbanisation of Asia’s middle class of 2.5 billion people will create tremendous needs for oil, steel, land, food, water, cement and other commodities over the course of the upcoming two decades. The book authors looked at ways that companies and global leaders have examined this challenge, given that resource constraints are argued to be a big threat to the progress and wellbeing of people. The book examines the pace of change that the energy industry is experiencing, looking at legacy operating and the role of large players and assessing the population changes and technological advances that will make the role of the “legacy assets” obsolete over the upcoming decades. Indeed, the book presents the idea that we are currently facing a new industrial revolution. The book also aims to show how the forthcoming resource revolution has the ability to deliver all kinds of advantages, such as innovation, prosperity and economic growth, and the authors believe that all of this will be more sustainable than current approaches.
The book proposes that it is now possible to use natural resources so effectively that it will be possible to have breakthrough performance where others see only limits and shortcomings.
The book suggests that there are misguided concerns that the rapid growth of the urban middle class will bring both a global environmental and economic crisis. This is the typical position taken, but it is argued that this is inaccurate and in fact global crises of the nature described are not imminent as a result of this phenomenal growth and pressure. They refer to these proponents of disaster as “the prophets of doom.”
Rather, the book does believe the challenge is a serious one, but arrives at the conclusion that these changes will drive increasing sustainability. Instead of preaching doom and gloom it is suggested that the upcoming changes and pressures lead to the opportunity for businesses and societies to benefit tremendously if they are able to transform and take advantage of the situation. In fact it is suggested that this is “the biggest business opportunity in one hundred years.
Well, organisations and societies benefit from excellence in information technology, nanoscale materials and biotech abilities, in addition to traditional industrial technology. All of this has the ability to be able to help organisations innovate to bring about changes in the productivity of resources, which in turn is seen to be likely to create great profitability benefits. However, it is also opined that this will require an ability to deal with a high level of disruption, as well as taking new approaches to management.
One challenge that we face in the modern day is explained to be the car industry. While the car industry is more than one hundred years old, and could only be argued to be a mature industry, the authors of Resource Revolution point out that the car is only used four per cent of the time. Additionally it is explained that only one per cent of the energy that is utilised by a car is put to transporting the people it carries. On top of this, they explain that even operating at maximum efficiency highways are only five per cent covered by cars. Cars clearly have plenty of opportunities to be energy efficient. This can be achieved by using electric motors, using driverless technologies or sharing cars. If better autopilot was introduced to cars it could be possible to have more cars on highways.
It is not just the car industry that experiences these major inefficiencies. Oil, gas, power, water, agriculture, transportation of other kinds, buildings and healthcare can benefit from sharpening up what they do. The book reviews what companies are already doing to achieve this and provides practical guidance for companies that wish to leverage this excellent opportunity, as they see it.
Paula Newton is a business writer, editor and management consultant with extensive experience writing and consulting for both start-ups and long established companies. She has ten years management and leadership experience gained at BSkyB in London and Viva Travel Guides in Quito, Ecuador, giving her a depth of insight into innovation in international business. With an MBA from the University of Hull and many years of experience running her own business consultancy, Paula’s background allows her to connect with a diverse range of clients, including cutting edge technology and web-based start-ups but also multinationals in need of assistance. Paula has played a defining role in shaping organizational strategy for a wide range of different organizations, including for-profit, NGOs and charities. Paula has also served on the Board of Directors for the South American Explorers Club in Quito, Ecuador.