Why Bad Things Happen to Good Technologies
John Sterman, PhD '82, Forrester Professor of Management and Engineering Systems, and; Director, System Dynamics Group, MIT
Description: John Sterman pokes holes through some popular proposals for addressing climate change, with sobering case studies that demonstrate why "technological solutions are not enough to address the problem of creating a sustainable world."
We are staking too much hope for a climate change fix on "the better mousetrap theory of innovation," says Sterman. It goes like this: New technology from places like MIT will drive down the cost of renewable energy, increase demand for carbon"free renewables and displace fossil fuels. New energy markets emerge, after a regulatory nudge or two from the government, or some incentives and emissions fees.
To demonstrate how completely wrong this theory is, Sterman first discusses great products never adopted by consumers, such as the Sony Betamax video recorder. More to the point, he notes current opportunities that would significantly reduce our carbon footprint yet have been ignored by society at large, such as improving fuel efficiency, and insulating buildings. Our rejection of these opportunities suggests we can't comprehend "the complexity of systems in which we are embedded and into which we deploy technologies," particularly the concept of feedback.
Sterman runs through a 'thought experiment' involving the introduction of a hydrogen"based, zero tailpipe emission alternative fuel vehicle (AFV) into California _ a conceivable leap toward creating an ecologically and economically sustainable transportation system. The government kick"starts the AFV market, rolling out fuel stations in urban centers, and essentially subsidizing the transition for a decade. You'd expect this AFV eventually to command at least 50% of the market share. But when Sterman runs his simulations, the AFV stagnates at around 25%.
It turns out that if fuel stations are not distributed through even the remotest parts of the state, people worry about where they'll find fuel, leading to weak demand for AFVs. This is "only one of the many reinforcing feedbacks which create strong barriers to the entry of technologies which are as good or better than incumbent technologies," says Sterman. Even an AFV with higher fuel efficiency can't win market share, Sterman's California simulations show.
The models offer some faint promise. When Sterman puts more fuel stations in rural areas, the AFV market succeeds -- after an extraordinarily long time. Sterman believes there's a tipping point in the adoption of new technologies. Dethroning gasoline will be difficult, he says, so we need to create multiple reinforcing feedbacks to change the behaviors of all the players. "We must push that ball, which represents where the market is, up a steep mountain, and only after crossing the peak will the market become self"sustaining."
About the Speaker(s): John D. Sterman's research includes systems thinking and organizational learning, computer simulation of corporate strategy, and the theory of nonlinear dynamics. He is the author of many scholarly and popular articles on the challenges and opportunities facing organizations today, including the book Modeling for Organizational Learning, and the award"winning textbook, Business Dynamics.
Sterman's research centers on improving managerial decision making in complex systems. He has pioneered the development of "management flight simulators" of corporate and economic systems.
Sterman has twice been awarded the Jay W. Forrester Prize for the best published work in system dynamics. He won a 2005 IBM Faculty Award, and the 2001 Accenture Award for the best paper of the year published in the California Management Review (with Nelson Repenning). He has five times won awards for teaching excellence from the students of the MIT Sloan School of Management, and was named one of the Sloan School's "Outstanding Faculty" by the 2001 Business Week Guide to the Best Business Schools.
Host(s): Office of the President, MIT Energy Initiative
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