“basic innovation”(Sweden)

Of all industrial countries, Sweden is probably the farthest along in weaning itself from fossil fuels. Today, the country depends on oil for only 30 percent of its energy, down from 77 percent in 1970. (The United States, by contrast, depends on fossil fuels for 85 percent of its energy.) Fifteen percent of all cars sold in Sweden in 2007 can run on ethanol, up from 2 percent in 2000. A car running on ethanol made from sugarcane or cellulose is estimated to emit 85 to 90 percent less greenhouse gases than a gasoline-powered car. All the major Swedish motor vehicle manufacturers, including Scania, the largest truck manufacturer in Europe, now offer flexible-fuel cars or trucks, which run on either ethanol, conventional gasoline, or a blend. In 2005, a government-sponsored commission announced its intention to make Sweden the “world’s first oil-free economy,” starting with an existing “BioFuel Region” (as it is called): an area encompassing 22 municipalities and located on the Gulf of Bothnia, roughly 200 miles (about 320 km) north of Stockholm. In this region, lower-emission ethanol is as readily available and economical as ordinary gasoline.

One might assume that changes of this magnitude require a massive government effort involving tens of thousands of people, substantial government subsidies, and years of extensively funded research. But until recently, no such support, government-sponsored or otherwise, existed. Instead, countless local networks developed quietly, catalyzed by the efforts of small groups of committed and courageous leaders from the public and private sectors.

The Sweden story is a valuable model of what historians call “basic innovation”: fundamental changes in technology and organization that create new industries, transform existing ones, and, over time, reshape societies. Basic innovations — including electrification, the automobile, commercial air travel, digital computing, and, most recently, the Internet — involve not just a single new technology but a collection of new inventions, practices, distribution networks, businesses and business models, and shifts in personal and organizational thinking that combine to transform the way business is conducted, technology is deployed, and people are engaged.

from The Next Industrial Imperative

by Peter Senge, Bryan Smith, and Nina Kruschwitz