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Innovation - Lessons Learnt

The Libertas Energy Initiative - Innovation - Lessons Learnt

Communications Innovation

We unfortunately have not progressed in energy as we have in other industries. The communications industry, for example, has evolved through multiple technology revolutions, expanded its services significantly and created millions of new jobs world wide, while prices for communications services have plummeted. In twenty years, we have experienced communications revolutions taking us from expensive, analogue land line service to cheap, high speed, broadband, wireless voice and data.

Indolence of Incumbents

What happened to energy? One can hear OPEC and the oil and gas concerns peddle their rapid fire excuses; however, the answer is simple – it’s called indolence. Indolence is the sclerosis that afflicted the communications industry before it faced serious competition. Competition, along with entrepreneurial innovation, revolutionized an industry that was once mired in monopoly. We now have Vodafone, Sprint, Vonage, Google, Yahoo, Nokia, Verizon, among others. We’ve also witnessed the tremendous growth in related hardware and software sectors. What a deal for the consumer. What a boost for the global economy.

Lessons Learned from Communications

We condemn ourselves if we do not rapidly create a new energy paradigm. As a communications entrepreneur, as I consider our energy dilemma, I believe that we can learn a great deal from the communications industry. Utilizing the lessons from the communications revolutions, I believe that we can reach energy security by harnessing one of our greatest assets – entrepreneurship – to revolutionize the way that we acquire and use energy. Through this asset, we can break our petroleum dependence and stimulate innovation and job creation with significant political and environmental dividends.

Breakup of Communications Incumbents

Several landmark initiatives sparked the recent communications revolutions. In the US, Judge Green’s ruling to break up AT&T was certainly one, but even more significant was an uncommonly good idea employed in Europe in the late 1980s and early 1990s. Several European governments decided to reinvigorate the communications industry by granting wireless phone licenses to newcomers, bypassing the incumbents. This decision opened the marketplace to new and innovative players. Remarkably, these governments resisted the temptation to reap a windfall tax, and instead of selling the licences to the highest bidder, they awarded them through a competition to those applicants who could credibly commit to the widest coverage, fastest rollout, best services and applications, and lowest tariffs. There may have been a few less than perfect decisions but, by and large, the policy was a raging success. The incumbents, after years of pretending to innovate, were suddenly forced into a new paradigm.