The 20th century saw a revolution in production and manufacturing. As we discuss “Resilient Dynamism” here at the World Economic Forum Annual Meeting, I increasingly believe that the 21st century will be defined not by new production but by industries that enable us to consume products more intelligently.
Many here at the Forum are talking about the explosion of the global middle class. In that context, I can’t help but think about how energy demand is rocketing. In India and China, for example, air-conditioning sales are growing at 20% a year. We need to revolutionize consumption, or we risk crippling the world economy.
As President Barack Obama of the United States declared in his second inaugural address this week: “Our obligations are not just to ourselves, but to all posterity…Failure to respond to the threat of climate change would betray our children and future generations.”
But there’s an opportunity too. The global economy is ripe for the type of energy productivity increases that transformed the agricultural sector in the 20th century and helped drive growth. Between 1950 and 2010, every acre of farmland in the US became three times more productive. Today, American families are spending half as much on food as they were in 1950.
There is huge potential to reduce global energy demand by simply increasing energy productivity. McKinsey estimates that we can reduce demand by 20% to 24% through substantial productivity improvements in a number of sectors. As energy demand grows from Mumbai to São Paulo, we have a challenge, and an opportunity, to become much more efficient.
I am increasingly convinced that global economic growth will be driven by companies that create value by helping people to consume things better. Energy productivity, doing more with what we have, can have a huge impact, but only if consumers are allowed to play their part.
Author: Alex Laskey is President and Founder of Opower, an energy efficiency software company that helps utilities meet their efficiency goals through effective customer engagement. Using cutting edge behavioral science and patent-pending data analytics, the OPOWER platform enables utilities to connect with their customers in a highly targeted fashion, motivating reductions in energy use, increased program participation and overall customer satisfaction. Opower was selected as a Technology Pioneer 2011 by the World Economic Forum.
Image: Picture of a traditional light bulb REUTERS/Ina Fassbender