Why innovation is sequester-proof

Why innovation is sequester-proof

By Vivek Wadhwa, Tuesday, March 5, 1:39 AM

This may come as surprise to people in Washington (or perhaps not), but the sequester is hardly a topic of discussion in Silicon Valley. Indeed, it’s not even a trending topic on Twitter. That is how unimportant short-term government decisions are to innovation. While lawmakers battle over taxes and fiscal cliffs, entrepreneurs are busy solving humanity’s problems so that we can go from debating how we distribute scarce resources to discussing how we equitably share the bounty we are creating.

In his bestselling book, “Abundance”, my colleague, XPRIZE Chairman and CEO and Singularity University founder Peter Diamandis, tells the story of how aluminum went from a rare metal to something we casually wrap our food in. When the king of Siam hosted Napoleon III in the 1840s, writes Diamandis, the people working for Napoleon were served with silver utensils. Those working for the king received gold. The king himself got aluminum-the rarest metal at the time. Aluminum was so valuable because it was extremely difficult to extract from bauxite-though it is one of the most abundant elements on Earth. Then came electrolysis technology, which used electricity to liberate aluminum from bauxite, driving down aluminum’s value.

It isn’t just aluminum that has become abundant — so have electrical power, refrigeration, television, telephones, cars, and air conditioning. Two hundred years ago, kings and queens didn’t have these luxuries. Today, many people who are classified as poor in the U.S. do. This prosperity has not reached most of the developing world yet. But the proliferation of mobile phones shows what is possible. Within ten years, their numbers have gone from zero to nearly 1 billion in both India and China. Even some of the poorest villagers own them.We are also making headway in solving the global water crisis. According to the World Health Organization, water-related diseases are responsible for more than 3.4 million deaths, making it the leading cause of disease and death around the world. There are predictions that countries such as IndiaChina, and parts of the Middle East will run out of water and that wars will break out over supplies. This seems paradoxical: 71 percent of the Earth’s surface is water, and sanitizing and converting seawater is as simple as boiling it and condensing the vapor. The problem is the cost of energy — it is prohibitively expensive to do this in any significant quantity.

Two exciting solutions to the water problem are already working and ready to scale.

The first is a product by Dean Kamen called Slingshot. Kamen is the inventor of the Segway personal transporter, an insulin pump, and many other breakthroughs. Slingshot is a vapor-compression water-purification machine that can produce about 30 liters of pure distilled water per hour using the same amount of power as a handheld hair dryer. It can transform dirty water from any source: rivers, oceans, and even raw sewage. Slingshot has been under development for more than a decade and was recently tested by Coca-Cola in five towns in Ghana for six months in 2011.

Kamen told me that he expects Slingshot will cost less than $2,000 when mass produced and will not require any maintenance or servicing for seven years. One device will produce enough clean water to support a village of 300 people. Coca-Cola plans to test it in dozens of locations this year and expects to roll it out on a larger scale next year. I hope that other organizations will also license the technology from Kamen and alleviate worldwide disease and suffering.

Another product, by Alfredo Zolezzi of Chile Advanced Innovation Center, is a Plasma Water Sanitation System that can sanitize 35 liters of water in five minutes at a cost-per-liter of less than 1/8th of a (U.S.) cent. This works by injecting water into a reaction chamber, where it achieves plasma state through a high-intensity electrical field. The microbiological content of the water is eliminated by electroporation, oxidation, ionization, ultraviolet and infrared radiation and shockwaves. This technology won’t remove impurities such as salt, arsenic, and heavy metals from water, but it will kill bacteria. The system has been in operation for more than two years in a slum in Santiago, Chile. When I visited in April last year, the inhabitants told me that not one person had gotten sick since they started using it — in stark contrast to life before the device was put into use.

According to Zolezzi, his device has been successfully tested by various labs in Chile and is being tested in collaboration with the National Science Foundation (NSF) to determine its conformance to EPA guidelines. Zolezzi expects that mass-produced units, which cost $500, will be able to sanitize up to 2,500 liters per day, and smaller units, which cost $200, will be able to process 1,000 liters or more. He says he is in discussions with several large corporations for the mass production and distribution of the technology pending the NSF validation.

Every month, we read about advancements in energy technologies. Despite all the negative press about solar, the price of solar panels (per watt) was 97.2 percent lower in 2012 than in 1975 according to GTM Research — and the downward trend is continuing. At these rates, within a decade, expect solar energy to cost much less than what we pay to our utility companies. Solar is also on track to achieve what is called “grid parity” in Europe and other parts of the world even sooner than in the U.S.

Last month, the most exciting news on my radar came from UCLA, where a small team of researchers developed a micro-scale graphene-based supercapacitor that can charge and discharge a hundred to a thousand times faster than current batteries. This could make it possible to fully charge your laptop in seconds and your electric car in a couple of minutes.

When we have unlimited clean water and unlimited renewable energy, we can produce unlimited amounts of food. Singapore is already growing food in vertical farms. A Silicon Valley company called Hampton Creek Foods is producing an egg substitute made from plants. Another startup, Modern Meadow, is using tissue-engineering techniques to produce in-vitro leather and meat without requiring the raising, slaughtering, and transporting of animals. With methods such as these, we will need less — not more — land to feed the world’s population.

Discovery, application, and invention are also occurring in medicine, 3D printing, artificial intelligence, robotics, and many other fields that will change our lives and transform entire industries. I have described some of these in this TedX talk and in these articles.

To be fair, basic research is necessary for long term innovation. Most of today’s breakthroughs are the harvested fruits of discoveries made in government-funded laboratories. If we choke off investment in the basic sciences, we will choke off future innovations. So we need to restore funding. The good news is that entrepreneurs aren’t getting distracted by the mindless battles in D.C.-they are still very much focused on saving the world.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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