We need large-scale experimentation platforms for cross-sector innovation in Europe

Climate change and resource shortages will force us to transform our economy and society. If we do not break out of the old, unsustainable techno-economic paradigm of the 20th century¹, a perfect storm² looms within decades. Experts from virtually all sectors are now talking about the need for innovation to transform whole industries, ensuring industrial leadership and a leap towards “sustainable growth” in Europe.

Meanwhile, the US and other world economies are building their own powerful momentum in green business and jobs³ in which sustainability goes hand-in-hand with competitiveness.

Not only do we need transformative innovation, we need it fast. Breakthroughs are overdue but the question is: How to achieve them?

Pioneering sciences and technologies are attracting a heightened interest, as are pilot studies of the relationship between the technological innovation strategies in the private sector and the technological innovation policies in the public sector.

A surge of industry-university projects is developing across Europe. Such bottom-up initiatives often involve important environmental and social issues and sometimes require EU-level coordination or complementary top-down frameworks. Stakeholders and experts increasingly agree that in order to deal with the complexity and challenges of profound change, individual technological advances are not enough: a systems-level approach is needed, starting with fundamental sectors like energy, infrastructure, water and raw materials.

Avoiding system failures

Those involved in energy production and distribution are emerging as facilitators and leaders of the process, and they are also the first to warn that change must happen while the system continues to operate. This means actions that are short-sighted or not thought through, can cause systemic failures, and consequently the collapse of living standards.

A series of recent meetings and reports by Science|Business, involving the participation of experts from companies including BP, RWE and GE, highlights this issue. Recent work by prominent public bodies like the European Commission⁴, the European Investment Bank⁵ and various professional associations and national agencies concerned with research and sustainability^6,7 has been reaching similar core conclusions: the risks and costs of huge investments are hard to estimate outside the limits of individual sector-specific projects, but they are likely to be largely outweighed by the alternative of not making those investments.

For example, as stated in the Commission’s Roadmap 2050, the EU aims to integrate renewable energy sources into the existing (and modernised) grids, and to further integrate national grids – via “electricity highways” – which will ultimately allow the creation of an internal electricity market. It is hoped that with EU-integration national energy systems will be able to back each other up, but this is no protection against emerging EU-wide systemic vulnerabilities and failures.

New expertise needed

Our energy-intensive way of life and the deep inter-connectedness of industries and territories, means continent-wide electricity black-outs (such as in North America in 2003, and in Europe in 2003 and 2006) are hugely costly and pose a threat to the entire socio-economic system. Experts in the European Network of Transmission System Operators for Electricity recognise in a recent report that “a critical need has emerged for new expertise, approaches, methods and innovations” and say that “an investment framework must be established that allows Transmission System Operators to carry out the R&D that is so urgently needed.”⁸

Because a system is not just the sum of its component parts, one must first take a cross-sector (holistic) approach, of the kind needed in urban or regional management, where very different functions collide. For example, electricity is hard to store but easy to transport, while water is easy to store but more difficult to move around. Second, one must understand dynamics across scales: European, national and city-level.

Small-world effect

When compared with larger scales, local context and cultural details may vary, but the small-world effect at work in negotiations between local actors and stakeholders lead to the same basic questions:

• What are the technological choices?
• How to integrate economics with environmental and social issues?
• How to govern complex projects and investments?
• How to manage the unexpected?
• What are the costs and the applicable burden-sharing agreements?
• How to integrate dynamics between scales?

The most straightforward way to answer to these questions is to experiment at a system level. This involves building and testing alternative scenarios. But what is the right scale/platform for such systemic experimentation?

In looking for an answer, we need to develop experimentation platforms at manageable scales, in order (a) to explore what works and what does not in complex systems and (b) to extrapolate across scales.

It can be argued that a city is a natural mid-way point in terms of scale and governance: representing the highest scale of manageable experimentation and the lowest scale of systemic relevance. A city is a node in continental and global network.

My own work place in Paris might serve as illustration: a university-industry cluster called Econoving established in 2008 (renewed in 2012 for another 4 years) and hosted by the University of Versailles. In this project, two large energy firms, GDF Suez and Alstom, have joined forces with leading companies from other sectors: SNCF (French Railways), Italcementi (construction materials) and Saur (water) to work collaboratively in cross-sector innovation – problem definition and looking for ways to ensure urban sustainability.

The first test-bed is Versailles Chantiers, a mainline train station in the western suburbs of Paris. Some major lessons were quickly learned during the first years of working together. Most notably, once the cluster started to concern itself with the energy consumption (and cost) of the station building and of the related infrastructure, the issue swiftly extended to include the neighbourhood, i.e. the city district and the city itself.

Raison d’être of the railway station

A train station compatible with sustainable development must be treated as part of a wider system. It cannot be a strict managerial unit, despite being an activity hub. Ultimately, the raison d’être of the rail station cannot be reduced to “just the place where you take the train”. Instead, it is a point of convergence of urban socio-economic life – a node of multimodal communications and exchanges.

Currently, an energy consumption model of the station has been developed and the interactions with its urban neighborhood (smart grids, land-uses and socio-environmental parameters) is being studied and modelled by a team of industrial and academic experts (including a number of postdocs and PhD students). Several foresight rounds have been carried out (involving engineers and natural scientists, architects, mathematicians and modellers, economists, sociologists and managers) to generate scenarios of the train station embedded in the eco-city of the future.

Aside from very important technical conclusions and reports, the most valuable result is perhaps moving up the learning curve: a tested modus operandi which enables the cluster to extend the work to other stations across the national rail system (suitable locations are being shortlisted).

As in similar developments, most notably in North America, the idea is to employ cluster intelligence to transform regional actors in innovation engines, in a bottom-up dynamic that leads to systemic change and green jobs.

Trade-offs over scale

At any location where system-wide transformation is attempted, there are trades-offs to be made between scale-specific issues; and time is of the essence. On the one hand, the less-than-a-city scale are less costly and more familiar for managers. But even city ports (communication hubs like train stations, airports and seaports) are typically still too incomplete (in terms of functions) to be treated as system-in-a-nutshell units.

On the other hand, experimentation at more-than-a-city scale is much riskier and costlier despite being more informative about system dynamics. For example, the European Commission plans to enhance the integration of renewable energy sources into a wider European energy system, that would be capable of smoothing the spikes of electricity production (notably wind and solar) by the effects of scale and geographical diversity. It would be ideal to fully test multi-sectorial effects and the behavior of the electricity highways at all scales. Instead we may need to content ourselves with pre-testing network dynamics models at city-level smart-grids, and make sure that we build systemic flexibility and resilience into the models that are made operational. In order to do this, we need experimental platforms capable of operating at city scales.

Are we on the right track?

In the negotiations between the Parliament, the Commission and the Council on Horizon 2020, the EU Framework for Research for 2014 - 2020 (which has prompted great interest from scientists and business alike^9,10) it is encouraging to notice that a number of MEPs have defended vigorously the idea that we need large-scale cross-sector platforms for experimentation and that these require dedicated funding. The European Institute of Innovation and Technology (EIT) and its Knowledge and Innovation Communities (KICs) are cited as examples of such European efforts.

It is both encouraging and significant that cities are one of the topics in the Climate KIC. I fully back the position that now is not the time to cut funding for large-scale experimentation and innovation. To me, the current economic dilemma of the EU is a golden opportunity to enable innovation breakthroughs at system levels – and we cannot afford to miss it.

If we are true to our common goals of sustainability, competitiveness and industrial leadership, we must give ourselves – as a Union of States - the means for collaborative learning and action. Right now, because later will be too late.

I express my full support for the letter addressed by the Science|Business Innovation Board on the 3rd of December 2012 to the EU leaders, urging them to support the R&D budget line.

Dr Ioan Ciumasu is Assistant Professor of Urban Sustainable Development and Eco-Innovation, Econoving International Chair in Eco-innovation, University of Versailles, Paris, France