Posted By David Brousell, June 27, 2011 at 2:01 PM, in Category: Sustainability
One of the things the recent recession has done is focus greater attention on manufacturing as the foundation of economic vitality and growth. Many of us in the industry welcome the spotlight for a number of reasons. First, it's true that manufacturing is the core of a healthy economy. Who and what are we if we don't make things?
Second, it's about time myths such as the U.S. is in a post-industrial "knowledge" economy were given their due; namely, the dustbin. And, thirdly, even though there are forces in the country today that advocate limiting government's role in the economy, the re-establishment of manufacturing as the acknowledged engine of economic growth won't happen without a lot of smart policy choices.
One idea that appears to be gaining support in discussions about manufacturing's economic role, and economic growth itself, is sustainability. The Manufacturing Leadership Board, for example, has set sustainability as one its Critical Issues in manufacturing for the second year in a row. Next month in the Manufacturing Executive Leadership Journal, Prof. Stephen Evans of Cranfield University in the U.K. argues that meeting the sustainability challenge amounts to a "new industrial revolution" in manufacturing.
Last week, I attended a roundtable on sustainability organized by SAP. The software provider not only offers applications to manage sustainability activities in companies but has also itself embraced sustainability in a genuine way. SAP has set aggressive carbon emission reduction targets, used videoconferencing systems to reduce travel, and introduced "green" vehicles in its transportation fleet.
A significant portion of the 90-minute roundtable, held at the landmark Plaza Hotel in Manhattan, dealt with the idea of sustainability driving economic growth. Bruce J. Katz, vice president and founding director of the Metropolitan Policy Program at the Brookings Institution, argued that the recent recession has provided a "disruptive moment" to focus on a new growth model for the economy around sustainability.
But Katz warned that the "intense polarization" in Washington over sustainability may prevent that moment from being seized. "We run the risk of falling behind," Katz said, noting that the U.S. is already competing with other countries that have linked the sustainability conversation to economic growth.
Steve Corneli, senior vice president for sustainability at NRG Energy, said that sustainability is not a government revolution or a policy revolution. "This is a consumer-driven revolution that is coming in the next decade," he said. Corneli outlined several "game changers" that, he said, will drive a consumer-led sustainability revolution.
First, electric vehicles will foment a massive change in consumer behavior and the production of vehicles. According to Corneli, NRG has come out with a program to charge up an electric vehicle for $90 per month, far less that the cost of a month’s worth of gasoline. And he anticipates what he called a “relentless drive” for solar technology over the next half-decade.
Political events such as the upheaval in the Middle East and both natural and man-made disasters will increase awareness among the general populace of the need for sustainability. Climate change, too, will help drive the movement.
"All of these factors shift to a broad awareness that sustainable products are cleaner, cheaper, and cooler," Corneli said.
Scott Bolick, vice president of sustainability solution management at SAP, noted that there is a huge opportunity in manufacturing for improvements based on sustainability, but only if a systematic approach is taken. "Manufacturers must fully understand utility rates, production, how to match these against the financial plan, and all data needs to be integrated," Bolick said.
Indeed. What you can't measure, you can't manage. But seizing the sustainability opportunity isn't just a management issue. It's also a leadership issue, and one that every manufacturing CEO needs to get behind if Prof. Evans is right about sustainability "ensuring the continual development of a successful industrial base."
Let's not lose the moment the recession has provided. The U.S., and manufacturing, can't afford to fall behind again.
David R. Brousell is Editor-in-Chief of Manufacturing Executive.
Written by David Brousell
Global Vice President, General Manager and Editorial Director of the Manufacturing Leadership Council