8/9/2019 Can environmental legislation spur innovative response?

1/2

Most people acknowledge that swit

action needs to be taken to curb climatechange, and many would suggestthat legislation is a primary route toensure harmul emissions are reduced.However, a study by the IMs Centre orTechnology Management (CTM) showsthat law-making alone is not enough. Anumber o other convergent actors arevital i eective change is to be achievedby legislation.

The CTM study indicates that thesuccess o legislation designed to tackleenvironmental issues may be predicatedupon other unplanned actors, such as:

the management structureso individual companies

the level o autonomy givento research centres

the level o engagemento key personnel

The speed targets will be met alsodepends on the levels o existing researchand expertise and whether a avourablebusiness network and environment ocollaborative research eort is in place.

A catalyst or changeLaws and regulations designed to generatenew commercial products to assist inthe solution o a major problem can betermed technology orcing legislation.This is a policy where law-making bodiesmake regulations designed to orcemanuacturers to come up with innovativeresponses to the problem. The marketincentive comes rom the threat opunitive action i the required targets arenot met.

The example examined by CTM was the

development o catalytic converters orthe US car market during the 1970s.

In 1970, the US Congress, created the

American Environmental ProtectionAgency (EPA). In the same year newstandards or emission control by carmanuacturers were introduced by theClean Air Act and the EPA was taskedwith the responsibility o ensuringmeasures within the bill were met. Underthe bill, the emission standards outlinedwere ar ahead o accepted practice, andwere designed to orce the big three carrms GM, Chrysler and Ford to adoptcleaner technologies.

The motor industry was expected to

reduce emissions by 90%

The bill would mean the auto industrywould be orced to reduce emissions romcar exhausts by 90%.The legislation alsoapplied to cars produced outside the US,meaning non-domestic manuacturerswould have to comply.

The reaction from the big car

manufacturers was not positive

Crucially it also highlighted the need ornew technologies to achieve the ambitious

targets. Unsurprisingly perhaps, thereaction rom Motor City was not positive.

The Big Three had experimented withautocatalysts as early as the 1950s, butthey only had lead uels to experimentwith, so the results were not as eectiveas theyd hoped. This ailed experimentconvinced the triumvirate, as well as somemajor oreign manuacturers, that add-oncatalysts would not work; the standardscould not be met and the expense o newtechnology was prohibitive. Other actorswould be necessary to bring about thechange envisaged.

Business incentive and

opportunityThe introduction o the new legislationwas no guarantee o success. It alsoneeded businesses to realise that the newlaw would aord them a commercialopportunity. In 1970, the British-basedchemicals company Johnson Mathey(JM), which specialised in catalysts andprecious metals, was in just that position.In 2008 it employed around 7,800 peoplein more than 30 countries and generated4.5bn in turnover. The company saw thelegislation as a way to exploit its long-term research into the use o industrialcatalysts.

JM had been researching the use ocatalysts in industry since the early 1960s,and had been looking or commercialopportunities or its activities. Initiallythis work was believed to have a relativelyniche application, though they hadexpanded into reducing Nitrogen Oxide(NOx). The research activity meant it hada clear idea about the best materials andprocesses available.

In parallel JM were working with Germancar giant Volkswagen to nd the best

combination o uel injector system andcatalytic converter to control emissionsrom the VW Beetle. JM also carried outsimilar research on US automobiles withBritish engineering rm Ricardo. Thework meant that by the time the EPAlaunched its emission control bill, JM hadbuilt a signicant level o expertise.

Autonomous research teamsand product champions

Internal structures and work fows alsohave a signicant impact on productdelivery and innovation. Encouraging

individuals and groups within companiesto look at commercial avenues or

IM Briefng: Vol 1 No 5

im-enquiries@eng.cam.ac.uk

www.im.eng.cam.ac.uk

Institute or Manuacturing 2009

Institute or Manuacturing

17 Charles Babbage Road

Cambridge

CB3 0FS, UK

IM briefng is a regular publication by the University o

Cambridge Institute or Manuacturing discussing issues

o interest in the eld o industrial innovation.

ISSN 1752-895X

Can environmental legislation spur innovative response?

brieng

8/9/2019 Can environmental legislation spur innovative response?

2/2

existing research can result in protableinnovation. For example Technologycompany 3M developed the Post-It byencouraging individuals to seek new usesor existing technologies. In the case othe Post-It they ound a commercial useor a non-stick adhesive.

Encouraging staff to look at

commercial avenues for existing

research can result in protable

new ideas

Allowing greater autonomy or researchteams and allowing individuals to seekout potential markets was also a policypursued by JM. From the early 1960s ithad begun researching applications orprecious metal catalysts. The companyhad decided ten years beore a substantivemarket existed that the area was worthinvestment and exploration.

Its success was built around therecruitment o key individuals andaording them greater autonomy topursue research interests. It appointed

Research Director Dr Leslie Hunt whokick-started the research programme andchemical engineer Gary Acres who joinedthe catalyst research group in 1963. Bothchampioned the technology and kept tabson potential developing markets.

It was very important that seniormanagement supported the long-termgoals o the research, and understood thepotential uture gains. Their backing wasneeded to overcome short-term demandsrom shareholders and the potentialdiculties o bringing a new innovation toan established and competitive market.

PartnershipsJM also realised the importance odeveloping partnerships. These would bevital in order or an outsider to penetratewell established supply chains and marketsin the auto industry.

JM also realised the importance

of establishing partnerships to

help develop commercially viable

catalysts

From the very start o the researchactivity, JM worked with selectedpartners on projects which could assistthe development o commercially viablecatalysts.

In the early 1960s it partnered withUniversal Oil Product Inc (UOI), supplyingplatinum or UOIs study into reorminguel to improve the eciency andperormance o engines. UOIs researchwas the stimulus or JM to begin work inthis arena.

Later it worked with Corning Glass on the

most suitable materials or a catalyst. JMwas later to use this research, combinedwith studies by its ceramic department,in the creation o a more durableautocatalyst.

JM had also carried out a programmeo research with German car giantVolkswagen. They used VWs Beetleto nd the best combination o uelinjector system and catalytic converter tocontrol emissions. Similar studies on USautomobiles with British engineering rmRicardo also helped in the development oeective autocatalysts.

The rms working with JM also

benetted from the research and

therefore were happy to collaborateDeveloping networks and the transerenceo expertise and technology helped JMtowards its the nal autocatalyst product.Crucially the rms that JM partnered withalso benetted rom the shared researchso were incentivised to take part incollaborative eort.

Business climateThe EPA legislation was greeted as anopportunity by JM. The 1971 amendmentto the Clean Air Act, eliminating lead asa uel additive, prompted them to enter

the market or automotive catalysts.JM was able to see the commercialopportunity or catalytic convertersthanks to the seven years o research andground work it had put in already. It hadalso indirectly benetted rom the ailedexperiments with catalysts carried out bythe big three US rms in the 1950s. Thishad discouraged them rom seeing thebenets o add on devices leaving theway open or an external developer.

The rm still needed to sell the benetso the technology to the EPA against abackground o hostility by the motor

manuacturers. JM encountered thishostility when their oer o collaborationto the big three was rebued a case onot-invented-here syndrome.

Meanwhile, the EPA was also beingproactive. It reused to accept the wordo the US car makers and actively soughtout innovators. This proactive approachallowed JM to speak directly to a legislatorand prove its technology could meet newrestrictions. The EPA was also particularlyinterested in the research JM carriedout with engineering rm Ricardo onAmerican automobiles.

JM was also able to show that it couldmanuacture the new products on thescale necessary to achieve the emissiontargets demanded.

Further inormationThe IM working paper concerning thisresearch can be read in ull here:http://tinyurl.com/n6xauw

See our Industrial Sustainability website:

http://www.im.eng.cam.ac.uk/sis/

See latest events at: www.im.eng.cam.ac.uk/events

Follow us on twitter@IMCambridge

Download our podcasts rom iTunesU

View publications at: www.im.eng.cam.ac.uk/books

1971 1972 1980 -19601940-1950 1970

Universal Oil

Product Inc. ofAmerica

Ricardo

ICI and

Corning Degussa,Engelhard

Corning 1972breakthrough

The USEnvironmental

Protection

Agency (EPA)established

Collaboration

with Ford,

Chrysler, VW

and BritishLeyland

Participants in the developments of ACC

Car companies: Ford, Chrys ler, GM, VW. Competitors: ICI, Degussa, Engelhard Corporation, Umicor, and Delphi.Supplier: Corning (ICI). Partners: Ricardo