Data Center

How Alliances Will Help Us Build Smart Cities and Stave Off Doom

I recently finished reading an insightful book called “The Third Industrial Revolution” by Jeremy Rifkin, an accomplished author and president of the Foundation on Economic Trends, among various other titles and accolades. The book is all about how we need to move from an oil-based economy to one based on renewable energy sources.

I suppose my interest in the book was only natural, since I work for a company that’s all about energy efficiency. But it also struck me that Rifkin was making a case for why this is a great time to be involved in alliances, another topic that’s near and dear to me in my position as Vice President of Global Strategic Alliances for Schneider Electric.

Let’s start with the premise of Rifkin’s book. Here’s an excerpt from the description on Amazon that summarizes it nicely:

The Industrial Revolution, powered by oil and other fossil fuels, is spiraling into a dangerous endgame. The price of gas and food are climbing, unemployment remains high, the housing market has tanked, consumer and government debt is soaring, and the recovery is slowing. Facing the prospect of a second collapse of the global economy, humanity is desperate for a sustainable economic game plan to take us into the future.

Here, Jeremy Rifkin explores how Internet technology and renewable energy are merging to create a powerful “Third Industrial Revolution.” He asks us to imagine hundreds of millions of people producing their own green energy in their homes, offices, and factories, and sharing it with each other in an “energy internet,” just like we now create and share information online.

We constantly hear lots of gloom and doom stories about how CO2 levels are rising too fast and the end is nigh. Rifkin puts the situation in context, noting that we may still have time to make moves and avoid disaster. What’s more he provides a framework for how we can dig ourselves out of this hole, which makes this a refreshingly positive book.

Here’s where the partnership angle comes in. To make the shift to an economy that thrives more and more on renewable energy is going to require development of new value chains around areas such as smart grid, electric vehicles and lots more.

Alliances are a good way to create and test out these value chains. There’s significant risk involved in starting any new endeavor. The choice essentially comes down to a single company taking on all the investment – and hence all the risk – or for multiple companies to partner with one another (and, when relevant, with government agencies, educational institutions, foundations and the like) to share the risk.

Let’s say the challenge is to reduce CO2 emissions. A lot of the job is tied to where energy is used. As more and more people move to cities, cities of course consume more energy. So the challenge becomes how to better understand energy use in cities and to make it more efficient, with the ultimate goal of making it more carbon-free.

Schneider Electric’s strategy is focused on making companies, homes, and cities more efficient and we’re very much on board with the idea that it takes partnerships to make headway. Making the change from oil-based energy sources requires alliances with other industrial players as well as city, state and federal government entities, local entrepreneurs, academia and so on.

In short, it’ll take lots of alliances – and effective alliance management – to get people together and to decide what role each should play to create these new solutions and scale them up. The good news is those are exactly the sorts of issues alliances are well positioned to tackle.  What’s more, Schneider Electric is already involved in many smart city and green energy projects around the world.  I like our chances.


2 Responses
  1. Melissa O'Mara Melissa O'Mara

    Great blog post Alistair! I like our chances as well… And I’m really enjoying the collaboration I see happening across our company with alliances, value chain partners, and with cities.

    Reply
  2. Joe Kittel

    Thank you for the post, Alistair.

    I agree that alliances can help stave off doom; beyond that they can help businesses awaken. Ultimately strategic alliances will help capitalism become more conscious.

    As I see it:

    1. All change starts in relationship. It is in our relationships where we discover the need for change, and it is in relationships where change actually occurs. In fact, it is within our most difficult relationships where the greatest change occurs.

    2. Strategic alliances are about value-creation, if a relationship is not creating net-new value it is not a strategic alliance. It may be strategically important, but it is not (in my opinion) an alliance.

    3. Because strategic alliances are about the creation of new value, it makes them business’ most challenging type of relationship. Alliances are more challenging than value-exchange or value-extraction relationships (e.g., procurement, sales or channel relationships). This difficulty stems from a climate in business that tends to be counter to value-creation: it tends to be scarcity-based (your win is my loss), with a climate of low-trust, poor communication and pervasive fear. (This is a generalization, but we struggle to maintain a climate of high-trust, appropriate openness and healthy collaboration.)

    4. Given strategic alliances are the most difficult form of inter-company relationship they are actually business’ best crucible for change, for awakening, for becoming more conscious. Lessons learned in strategic alliances will help business learn how to increase the value-creativeness in other inter-company business relationships. This is how important strategic alliances are!

    This is also covered at http://spibr.org/change-starts-here/

    Reply

Leave a Reply

  • (will not be published)