Finland can act as an international example in commercializing environmental technology
Finland can offer significant new environmental technologies and innovations to the rest of the world. VTT Technical Research Centre of Finland has investigated barriers and opportunities related to the commercialization of environmental technology and developed models for assessing the environmental and market potential of innovations. Water technology was used as an example in the research on environmental technologies. The results can be applied to other environmental technologies as well.
The research resulted in the creation of the Value Assessment Framework (VAF),
which takes into account the central variables influencing the international
success of an environmental innovation. VTT’s approach focuses on the
innovation process, special characteristics of environmental innovations, the
environmental benefits of new products and lead market thinking.
The starting point of the research project is the idea that an innovation is created as a result of a specific regional need or expertise. A comparison of the lead market factors of different regions and targeted marketing give the innovation a good opportunity to become successful internationally. A small country which manages to solve a local problem may be able to provide internationally significant innovations. For example, the lack of natural resources in Japan forced the country to develop recycling systems and to make more efficient use of existing resources. In Denmark, the lack of fossil resources promoted the development of wind power.
The development is primarily governed by the tightening and increasingly harmonised legislation adopted worldwide. As regards the development of the competitiveness of companies, more stringent environmental legislation than what has been introduced in other countries can be an important means to create internationally successful business in the long term.
In Finland, environmental engineering is a field that has been largely dominated by the public administration and legislation. Due to climate change and rising energy prices, the environment has become a factor which affects all business activities. Private markets have also contributed to the development, which has led to the improvement of energy and climate technology solutions, among others.
New innovations have led, at their best, not only to environmental benefits but also to lower prices as a consequence of energy and material savings. Life-cycle considerations and the ecological, social and economical dimensions of sustainable development will receive increasing attention in product development.
Support mechanisms provided by the society play an important role in the development of new solutions. These support mechanisms include the maintenance of high quality investigations at research institutes, the development of legislation and measures to promote the growth of internationally attractive business sectors. The support must also cover service businesses, because their underlying expertise can be as significant as a source of new business as a technological solution. The public sector can function as a pacesetter by adopting solutions which best advance sustainable development.
In the global economy, the focus should shift to developing and growing market areas. Thanks to its goal of developing environmentally-friendly cities, China currently offers a great opportunity for exporting environmental companies. Central America and Africa also offer excellent opportunities for new technology.
Water technology as a research example
Water technology was used as an example in the research on the commercialisation of environmental technologies. As the demand for water increases, it is expected that water-related problems will be the basis for different types of footprint calculations. It is estimated that 1.2 billion people live in regions that suffer from a lack of water and at least 1.6 billion people do not have the money to buy water of good enough quality. By 2025, water consumption in industrialised countries is estimated to increase by 20 percent compared to the year 2000 levels. In developing countries, in turn, the increase in consumption will be approx. 50 percent. Water production and distribution infrastructure is becoming obsolete in many countries.
The Finnish water technology sector is characterised by its division: there is the public sector, a few large private players and a number of small and medium-sized companies. Due to the fragmentation of the sector, it is important to create different forms of cooperation when developing and marketing product and service concepts.
VTT’s publication “Water business is not an island: assessing the market potential of environmental innovations” is available online.
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