We recently had the opportunity to film Andy Hoffman, at the University of Michigan Ross School of Management, regarding market opportunities in a carbon-constrained world. He frames the discussion in a purely apolitical manner – regulation is emerging at the state, federal and international levels that will dictate corporate carbon emissions; the question for you is: do you want to merely react to this shift in the market environment, or do you want to proactively build the next-generation corporate and product innovations that will put you on the leading edge? Put another way: do you want to be exploiting the opportunities in this pending market shift, or scrambling to catch up?
Historically many people have had a tree-hugger notion of save-the-planet fringe activists asking us to recycle, reduce, reuse and encouraging costly regulation. Andy asks us to instead, “Think of climate change as a market shift, one that will create both winners and losers. Changes in regulation coupled with shifts in consumer, investor, and energy will change the competitive landscape. How will you innovate to respond to this shifting landscape? ” He frames the discussion in strictly business terms.
Consider Tom Friedman’s argument that regulation can be an incredible competitive advantage. If you are a U.S. based multi-national corporation employing the best and brightest engineers, programmers, architects and technical professionals, you want the bar raised. You want your product innovation to be setting the standard in your market, and you want the barriers to entry to be increasingly higher to provide your company with a competitive advantage. In fact, that bar is already being raised around the world and US business needs the right incentives to keep up. Make no mistake, we want market innovation wherever it comes from but if you are a market-leader, you want to be defining the baseline to entry in the market