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Lead Papers
1. Globalization A new period has begun with "explosive" innovations in the economy. Thanks to continuous improvements the welfare of our society can be secured. Globalization is one of the important factors for this path in connection with free trade and the reduction of protectionism in the different countries. Micro- and macroeconomic considerations become more closely connected. In special cases it is necessary that companies and the state cooperate to obtain a sustainable development. In the long range, innovations and knowledge are very important keys for success to attain a positive development in economy, ecology and social life. 2. Knowledge Globalization has changed the world : all dimensions of the universe are getting smaller. We have to think in a global way and look for new possibilities of being competitive. All the companies nowadays must develop new ways of maintaining existing lines of markets and finding new ones, which constitute the fundamental source of competitive advantage. Only learning can create new knowledge that is manifested in innovations, which then require new learning to use the new technologies effectively. Therefore knowledge contributes to productivity growth. When new technologies are launched in the market and the Dow Jones Industrial Index goes up, this is an indicator that the companies are successful. The economy expands and the standard of living can rise. Innovations have positive social effects because they create confidence in the mind of entrepreneurs, customers and employees. When people see their wealth increasing, they are more motivated to allocate part of their revenue to buy more products which are not harmful to the environment. 3. New products and processes New products are closely connected with the invention of new processes and mostly costs are going down with the progress of the innovation process. Frequently, this leads to outsourcing of activities and allows a better allocation of resources in connection with the specialization. With higher qualifications it is more easy to find innovations, which frequently can be diffused in the market without high efforts. So it is possible to reduce useless advertisements for old products. The invention of E-commerce has also brought an important advantage by reducing travelling costs. A conference organized on the WWW implies no damage for the environment as the participants stay at their homes for communicating with each other. The government also tries to promote ecology by giving incentives to use grid electrical power such as hydro, solar, biomass, wind and gas turbine instead of damaging resources. The market justifies such a trend while increasing price stock for renewable energy. Even the private companies care about ecology. As a consequence of global warming and the worsening of urban air pollution, 33% of Honda's budget has been allocated for engine research. Some innovators succeeded in inventing fuel cells and hydrogen-powered vehicles. Some years later, Mercedes launched in the market the first solar energy car. Is this a sign that oil-driven engines will disappear in near future ? 4. Innovations in Management One of the main reason in favour of innovation lies in the ability of the entrepreneur to introduce new organizational models. In industrialized countries, centralized management systems have been replaced by decentralized management. So the employees have the opportunity to take part in the expansion of the company by suggesting new ideas. An innovation can be launched in the market through several ideas. Many entrepreneurs try to activate the ideas of the employees by giving them an incentive through the distribution of shares. So the employees have an interest in working well and using the resources efficiently. At the same time, global consumption is improved. As far as the organization is concerned, many problems must be faced. In fact, most of the companies are not able to meet today's challenges. They do not see a sustainable development by being not able to think ahead into structural changes. This was the case of IBM, Hewlet-Packard, Data General and Apple Computer where there was a lack in management, while these companies officially have been considered as well-managed. This implies the introduction of new approaches to management for manufacturing, development, distribution, marketing or sales. "Sustaining innovations", in the contrary, consider fundamental changes especially of technologies under long-term aspects, taking into account ecological and social cost. Under this aspect sustainable development can reduce strong volatilities of the value of companies in the market. The main reason for failure lies in the short-term behaviour of the managers, who promote the "desruptive technologies" to make the « short-term shareholder value » rise. While acting myopically, they make the market very volatile, which is dangerous for the stakeholders as well as the company. In reality, everybody is endangered as there is a risk that the shareholder lose their money and the workers become jobless with a decrease in the sharehodler value. Such a quantity measure can not be qualified as satisfying as it is only based on a short-term performance evaluation of managers. That's why the shareholder value is not adopted by the Japanese managers. They prefer relying on a less sophisticated tool, known as the return of sales. 5. « Short-termism Furthermore, we have to implement a « long-term shareholder value », which is linked too to new organizational capabilities and requires the evaluation of future aspects combined with the shareholder value. The long-term shareholder value will not suppress disruptive innovations and so will contribute to the competitiveness of the company. This happened to MG Motors some years ago. Because of high cost of implementation this company decided to give up disruptive innovations, which would have brought success. At his time Schumpeter has already recognized the positive effects of disruptive innovations, which he called destructive. In this new millennieum we should especially consider future risks. In fact, they are very important in connection with clean technologies. 6. Index for sustainable development Even the index for sustainable development introduced at the stock market in 1999 should also incorporate future risks in order to really aim at sustainability. Such an index created a revolution in 1999 as it was the first time that the stock exchange began to care about ecological and social aspects which primarily are of short-term type. The sustainable development index comprises two hundred companies and gives a too optimistic picture for investors. Taking into account the aspects of sustainability the index should be lower ; it is supposed to have a positive bias. 7. Government incentives
With respect to the next generation, there is an urgent need for government incentives. The state should promote innovations in clean technologies. It would be worthwhile to lower taxes for companies specializing in environmentally-friendly products or services. Sharp thinking is important for survival, as it gives an incentive to innovate and creates a better and sustainable future. Research in 1997 in % of GNP Switzerland 0.75 % France 0.45 % Germany 0.45 % US 0.42 % Another solution of today's problems lies in the capacity of the state to encourage universities and governments laboratories to make long-term research instead of projects that promise an early payoff. To this extent, exchanges and collaboration between universities and laboratories should be promoted. The diffusion of knowledge and experiences gives impulses for innovations. Synthesis Research and development going into innovations push the market. So for clean technologies we have a sustainable development as long as customers agree to pay for. In this way innovations are promoted exclusively by the market. In special cases there is a need for government intervention. The state can create a climate in which technologic development of technologies is encouraged. Sometimes there may be a fear that innovations reduce employment. But empirical studies studies show that in the long range the improvements of productivity and the resulting additional employment compensate this loss of jobs. Finally an innovative society should have the goal to contribute to sustainability by economic growth and to create jobs under the long-term perspective. |
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