Preserving the Environment from Within the Display Industry — Part Two
Big Advantages for Companies That Think Strategically About Environmental Issues
The greening of the electronics industry has moved beyond the talk phase and into actual practice, impacting the way high-tech business is being conducted now and in the future, according to iSuppli Corp.
In fact, the opportunities and new ideas concerning sustainability may be major revenue generators for companies that are thinking strategically about how they can improve their own global carbon footprint. These companies will gain a competitive advantage over those focused solely on the bottom line.
In the second part of Market Watch’s interview with Kimberly Allen, iSuppli senior consultant for displays research, we sat down to discuss how economic challenges may impact green initiatives and the opportunities that exist for those companies that are thinking ahead.
iSuppli: Obviously, the economic downturn is in full effect. How is this, if at all, impacting these environmental changes or concerns?
Allen: "The No.-1 way it factors in is that companies during good economic times or bad economic times can still operate more efficiently and save money. If you cut your energy use, that comes right off the energy bill. It has been found that most IT departments and companies are using at least 20 percent to 30 percent more power than they need to. Companies are taking the low-hanging fruit by saving power and saving materials. If you are making a product using X amount of materials, and you make a process change to instead use 0.75X amount of materials, the second is better because you are buying fewer parts for it—and this helps the environment too. Furthermore, there are other top-line benefi ts."
iSuppli: In the report, you talk about one of the easy ways to become more environmentally friendly is to encourage telecommuting. Beyond the obvious savings in gas, what else are we talking about?
Allen: "Telecommuting is more popular in North America than in other parts of the world, but it is slowly growing in acceptance. It brings many benefits. Obviously there is the reduction in emissions and the time savings from not driving. Also, having employees that telecommute means you can have a smaller overall office. Cisco has made a point of having two-thirds of the number of desks compared to the number of employees they have. When someone comes into the office, there is a group of desks people can use when they are there. This drastically reduces rent and power use. Employees tend to be more productive when they can work from home a couple of days a week. And employees enjoy telecommuting, so there is a gain in job satisfaction. Overall, it improves the workplace and is better for the environment."
iSuppli: Obviously, if a company is very focused on the bottom line, it may not be willing or able to find the hidden advantages of going green, right?
Allen: "Most companies are making piecemeal efforts — a bit here, a bit there. No wonder the benefi ts seem dubious! Imagine if your corporate marketing efforts were random and piecemeal. Without a strategic overall approach, companies may not exactly see where they could benefit from implementing more environmentally friendly policies. They aren’t getting the full picture. If companies take a strategic approach, they start to see ways these policies can be even more beneficial to their bottom lines. There is much to be said for conducting a carbon footprint analysis of a company and developing a solid blueprint for how you will offer sustainability. For example, Philips’ medical division discovered that its customers don’t care about a particular machine, they simply want the service the machines does. They want the ability to do x-rays, not an x-ray machine. So Philips is leasing the devices now — it was a wholesale change in the business model. Only by taking a strategic approach could they have done something radical like that. With a tactical approach, they would have beat their heads on the wall about upping their monthly sales fi gures. Now, think creatively for a moment. Why don’t we have a service or leasing model for consumer electronics? Consider my laptop. I want the ability to do e-mail, access the Internet, etc. I don’t care about my exact laptop (beyond needing it to be secure), I just want to do these things. Why can’t I lease the machine and let the vendor be in charge of maintaining it—or why can’t I upgrade it in a modular way when new components come out, rather than having to buy a whole new machine? Reusing refurbished parts is another way to buy less stuff. No one has done this. I don’t know what the exact model is, but I’d be interested to see consumer electronics companies getting more creative and strategic. I think sustainability is the next disruptive business force where companies that undertake it strategically will see big advantages over those doing it tactically."
iSuppli: So are you saying that companies may see new opportunities where they may have not been before?
Allen: "That’s right, and now is the time to do it, with the interest coming directly from consumers who are pushing for these green initiatives."
iSuppli: And the time may be right in terms of the economic crisis because margins are shrinking and revenue is lower than it used to be.
Allen: "Right. An economic crisis is perfect time to make a change. Creativity has been shown to increase dramatically when the down times hit, and I’m expecting to see a lot of creativity in this area."
The greening of the electronics industry has moved beyond the talk phase and into actual practice, impacting the way high-tech business is being conducted now and in the future, according to iSuppli Corp.
In fact, the opportunities and new ideas concerning sustainability may be major revenue generators for companies that are thinking strategically about how they can improve their own global carbon footprint. These companies will gain a competitive advantage over those focused solely on the bottom line.
In the second part of Market Watch’s interview with Kimberly Allen, iSuppli senior consultant for displays research, we sat down to discuss how economic challenges may impact green initiatives and the opportunities that exist for those companies that are thinking ahead.
iSuppli: Obviously, the economic downturn is in full effect. How is this, if at all, impacting these environmental changes or concerns?
Allen: "The No.-1 way it factors in is that companies during good economic times or bad economic times can still operate more efficiently and save money. If you cut your energy use, that comes right off the energy bill. It has been found that most IT departments and companies are using at least 20 percent to 30 percent more power than they need to. Companies are taking the low-hanging fruit by saving power and saving materials. If you are making a product using X amount of materials, and you make a process change to instead use 0.75X amount of materials, the second is better because you are buying fewer parts for it—and this helps the environment too. Furthermore, there are other top-line benefi ts."
iSuppli: In the report, you talk about one of the easy ways to become more environmentally friendly is to encourage telecommuting. Beyond the obvious savings in gas, what else are we talking about?
Allen: "Telecommuting is more popular in North America than in other parts of the world, but it is slowly growing in acceptance. It brings many benefits. Obviously there is the reduction in emissions and the time savings from not driving. Also, having employees that telecommute means you can have a smaller overall office. Cisco has made a point of having two-thirds of the number of desks compared to the number of employees they have. When someone comes into the office, there is a group of desks people can use when they are there. This drastically reduces rent and power use. Employees tend to be more productive when they can work from home a couple of days a week. And employees enjoy telecommuting, so there is a gain in job satisfaction. Overall, it improves the workplace and is better for the environment."
iSuppli: Obviously, if a company is very focused on the bottom line, it may not be willing or able to find the hidden advantages of going green, right?
Allen: "Most companies are making piecemeal efforts — a bit here, a bit there. No wonder the benefi ts seem dubious! Imagine if your corporate marketing efforts were random and piecemeal. Without a strategic overall approach, companies may not exactly see where they could benefit from implementing more environmentally friendly policies. They aren’t getting the full picture. If companies take a strategic approach, they start to see ways these policies can be even more beneficial to their bottom lines. There is much to be said for conducting a carbon footprint analysis of a company and developing a solid blueprint for how you will offer sustainability. For example, Philips’ medical division discovered that its customers don’t care about a particular machine, they simply want the service the machines does. They want the ability to do x-rays, not an x-ray machine. So Philips is leasing the devices now — it was a wholesale change in the business model. Only by taking a strategic approach could they have done something radical like that. With a tactical approach, they would have beat their heads on the wall about upping their monthly sales fi gures. Now, think creatively for a moment. Why don’t we have a service or leasing model for consumer electronics? Consider my laptop. I want the ability to do e-mail, access the Internet, etc. I don’t care about my exact laptop (beyond needing it to be secure), I just want to do these things. Why can’t I lease the machine and let the vendor be in charge of maintaining it—or why can’t I upgrade it in a modular way when new components come out, rather than having to buy a whole new machine? Reusing refurbished parts is another way to buy less stuff. No one has done this. I don’t know what the exact model is, but I’d be interested to see consumer electronics companies getting more creative and strategic. I think sustainability is the next disruptive business force where companies that undertake it strategically will see big advantages over those doing it tactically."
iSuppli: So are you saying that companies may see new opportunities where they may have not been before?
Allen: "That’s right, and now is the time to do it, with the interest coming directly from consumers who are pushing for these green initiatives."
iSuppli: And the time may be right in terms of the economic crisis because margins are shrinking and revenue is lower than it used to be.
Allen: "Right. An economic crisis is perfect time to make a change. Creativity has been shown to increase dramatically when the down times hit, and I’m expecting to see a lot of creativity in this area."
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