On innovation, the FT gets it

When it comes to understanding innovation, the Financial Times get it. Last week, FT and Forum for the Future launched the FT Climate Challenge Competition to "find the most innovative solution to the effects of climate change." The prize for the winner, sponsored by HP, is $75,000. That amount is probably not enough to get any of these innovation scaled up -- but more than enough in publicity to generate venture capital and other financial interest.

The prize idea is point one in how the FT gets it: leverage information via a prize to spur recognition and further work.

Point two is their broad definition of "innovation." As longer piece in the FT last week (FT.com / Climate Challenge Competition / In depth - Call for innovators) notes:

The innovation need not be technological, although such entries are certainly eligible. Creativity could equally come in marketing, financing, analysis or in an entire business model.

Among the ideas that readers uncover – along with contributions from the FT and Forum for the Future experts – we would hope to find proposals that could match up to flourishing initiatives such as Streetcar and Zipcar, SolarCity and Grameen Shakti.

Streetcar and Zipcar are car-sharing clubs that rent pay-as-you-go small cars, typically for short trips. Members pick up and drop off cars parked at designated bays. They have experienced rapid growth: US-based Zipcar had 225,000 members worldwide by last summer, and London-based Streetcar, which started with eight cars in 2004, is trebling in size every year and aims to have 250,000 members by 2012.

Because car clubs give members the freedom of having a vehicle when they need one, they encourage people to give up owning a car; as a result they drive less and their motoring emissions are cut.

SolarCity is an example of innovation in marketing and finance. The California-based provider of solar energy systems has surmounted the problem of consumers’ resistance to making the initial commitment to invest in solar panels by leasing the equipment to home owners.

The result is that consumers can install solar power without a large upfront payment and split the benefit of future savings, including government subsidies, with the company. SolarCity even guarantees the savings that consumers can make.

Grameen Shakti is another innovator in marketing and finance, as well as in economic and social development. Founded by the Nobel prize-winner Muhammad Yunus of the Grameen Bank, the micro-credit pioneer, Grameen Shakti provides solar panels, improved cooking stoves and biogas plants in Bangladesh. It supplies poor communities at affordable prices, and also trains local people as engineers to fit and maintain its products.

So while the US is focused on clean tech (i.e. new gadgets) and green jobs (i.e. construction jobs to retrofit buildings and install solar) (see earlier posting), the FT is looking at more: social innovations, marketing, finance and business models. There is nothing wrong with clean tech and green jobs. They are, as the FT examples point out, just not the complete picture.

Why can't we -- especially the US government -- get it?