Gates forms council to address energy innovation

Bill Gates and Chad Holliday take to the op-ed page of the Washington Post today to discuss innovation-specifically innovation in the energy sector. “This country runs on innovation,” they write, adding, “The American success story–from Ben Franklin’s bifocals to Thomas Edison’s light bulb to Henry Ford’s assembly line to today’s advanced microprocessors–is all about inventing our future. The companies we ran, Microsoft and DuPont, were successful because they invested deeply in new technologies and new ideas.”

But, they continue, the US is neglecting to innovate in energy-a field critical not only to our prosperity but to our security. Information technology and pharmaceutical industries, they write, spend 5 to 15% of their revenue on R&D, US companies have only spent 1% of revenue on energy R&D over the past 15 years.

Why the discrepancy? Basically, it comes down to the externalities cited by Christina Romer at a recent Economist event on innovation. As Gates and Holliday put it, “…there are profound public interests in having more energy options. Our national security, economic health, and environment are at issue. These are not primary motivations for private-sector investments, but they merit a public commitment.”

To spur innovation in energy, Gates and Holliday have teamed up with current and former leaders of Lockheed Martin, Xerox, Kleiner Perkins, GE, and Cummins to form the American Energy Innovation Council. The goal is to exploit falling prices for solar and wind energy, develop better storage technologies and advanced nuclear power plants, and adopt efficiency technologies to cut energy demand in industrial and other processes. (As an example, read how Nucor Steel Marion employed green techniques to save energy). Over the next few months, the organization will be offering detailed recommendations, which will involve encouraging the federal government to invest more in and be smarter about the innovation process.