Warren East discusses a promising future but some inconvenient truths.
Warren East, Executive in Residence at Oxford Saïd and former CEO, Rolls-Royce and ARM, is ‘fundamentally an optimist’, he says. He believes that engineering and technology can help us address the major challenges facing the world, from food insecurity and water scarcity to the urgency of the energy transition. However, he is also a realist. With a consistent rise in debt as a proportion of GDP across the world, there can be no expectation that global solutions will be wholly funded by governments. The private sector will have to help out.
In the first event of a series hosted jointly by Saïd Business School and the Oxford Martin School, East discusses his model for innovation in the private sector with Charles Godfray, Director, Oxford Martin School and Jonathan Reynolds, Deputy Dean of Oxford Saïd.
Over the past 75 years we have seen a ‘terrifying’ rate of growth in the global population - from around 2.5 billion in 1950 to over 8 billion today - driving the climate crisis and associated problems. Paradoxically, much of that population growth is as a result of major improvements in healthcare and reductions in poverty, but challenges remain, particularly in areas such as energy, food and water. East believes that we have the technology to address them, but that the system to deliver and apply that technology is not working because the risk/return balance is ‘broken’. He talks about some of the factors that are discouraging companies and investors.
Impatience
Technology takes time to mature. East mentions a longstanding joke about the ‘dream’ of using nuclear fusion for energy ‘always being 30 years away’. And investors do not usually have a mandate to take a risk over such a long period.
Scale
Small companies are often the source of the most revolutionary technological innovation. However, scaling is difficult, and investors tend not to be interested in investing at that small level. It is only too easy for technology to wither on the vine along with the business.
Geography
Some solutions work better or are easier to implement in some parts of the world rather than others. For example, implementing new technology is a lot simpler when it is not replacing or trying to fit in with existing infrastructure.
Rather than ‘handwringing’, East urges companies to take on the mantra that ‘necessity is the mother of invention’ and innovate internally. This includes taking some of the technologies that exist today and trying to exploit them in other areas to generate revenue and present a different investment proposition.