Sue L. King, Independent Consultant
Recently, I found Thomas L. Friedman being interviewed by John Doerr1, who was guest hosting the Charlie Rose show that night. Friedman is the three-time Pulitzer Prize winning foreign affairs columnist for the New York Times and the author of The World is Flat: A Brief History of the Twenty-First Century, as well as the more recently updated version of the sam2. I had tuned in midway into the program, just as Friedman was explaining how his views have changed as a result of touring the US since he wrote his book. The subject of the show was “The Looming Energy Crisis,” an interesting topic in itself. However, what struck me over and over again as I listened was the critical need for strategic thinking and innovative leadership, particularly as we attempt to navigate a future full of major paradigm shifts in energy and environmental conservation fundamental to our economic as well as ecological well being. What follows is a summary of the Friedman interview. For summary purposes, I have reordered the key points made during the interview.
Friedman says he appreciates that his book propagated the notion that China and India, in that order, will own the 21st century and the US is toast. Now, twelve months later, he jokes, “Never cede a century to a country that is censoring Google!” Friedman sees an incredible explosion of innovation, innovative thinking, and experimentation around energy and education in the US. He believes that these are the key playing fields for success in the 21st century. He stresses the importance of “dynamic” and “flexible” thinking, which, he says, he is beginning to see again in the US. He says American industry still has all the secrets to success in the fight for the future. He notes that American business is finally not waiting for the government to lead the country out of this dilemma. He now believes that, while the US will not automatically win the battle for 21st century leadership, neither will we automatically lose.
He cites examples of the type of innovation and the beginning of key paradigm shifting actions he has seen emerging in the US.
CISCO is looking for ways to add intelligence in their routers so that they can substantially lower the energy demands of their clients’ server farms. In a future where the computer is the network, the energy demands of server farms supporting the network will be enormous. CISCO understands that whichever company most reduces the energy load will win future business.
When Texas Instruments (TI) recently set out to build a new chip fab, it challenged its facilities team. The only way the fab would be built in Dallas was if the cost could be $180 million less than the cost of the l999 chip fab. That would be the only way Dallas would beat out competing countries like Taiwan and China, most of which were offering incentives to TI to move to their countries. After initial reactions about the impossibility of doing such a thing, the team finally came in with a proposal that saved over $200 million over the 1999 fab cost. The team did this by thinking “out of the box.” They eliminated an entire floor of the fab and co-opted $300M in funds from the state of Texas and other Texas-based businesses to bring UT- Dallas up to Stanford/MIT quality to support training for new fab staff.
As an example of US innovation deployed outside the US, Friedman cites the amazing work of Bill McDonough3, a world-renowned architect practicing and teaching ecologically, socially, and economically intelligent architecture. Friedman met Bill, an American, in China where he is architecting green design cities from the ground up. As Friedman notes, the Chinese Ministry of Technology is a US Green Building Council gold-standard green building, advised by the Natural Resources Defense Council, a US-based non-profit energy advocacy group. Friedman asked the Chinese which countries contributed the various technology elements to the building. Thirty to forty percent came from China, 30 to 40 percent came from Europe, and the rest came from the US.
Friedman says big paradigm shifts can occur when big players contribute even for seemingly “wrong reasons.” Walmart, for example, plans to convert its entire delivery fleet to flexible energy and is planning to “green” its procurement processes. Friedman suggests that, while the underlying cause is “about branding,” such a move by Walmart is bound to lead the way for other big businesses4.
Friedman asks Doerr what KPCB is investing in these days. Doerr says the venture industry has been investing in clean technology for a long time at about a six percent rate. They have seen a jump in growth in this area in the last year. In the last five years, KPCB has invested in nine new energy ventures, and, in their latest $800 million fund, at least $100 million is earmarked for energy initiatives. Doerr indicates that the technologies they are starting to see today, including new materials, ought to achieve compound energy improvements approximating Moore’s law, where the bang for the buck goes to venture capital firms. (It should be noted that, in May, KPCB inaugurated its Greentech Innovation Network, consisting of 50 of the world’s leading entrepreneurs, scientists, and policymakers. They are gathering to build a strategic map for evaluating needs, to encourage innovation, and to forge new partnerships. Furthermore, KPCB has announced a Prize for Green Innovation, a $100,000 annual prize to be awarded starting this fall for the best technology or policy innovation in Greentech.
Likewise, Doerr asks whether Friedman is putting his money where his mouth is. Friedman says all his family uses only hybrid cars. His home is geothermal, heated and cooled naturally by ground temperature. He is about to retrofit his home to be more solar heated because the original design team could not economically do this three years ago when it was built. He deliberately moved to a townhouse with a reduced land footprint to save greenscape.
Friedman says there is neither a short nor long term solution to the energy crisis unless American government and leadership are ready to ask the American people to do something hard. We must get two things right: (1) we must level the playing field, and (2) we must force innovations. As an underlying premise for success, we must educate our youth in math, science, and engineering. He suggests that the major transformation on energy can be done only if a Republican oilman from Texas who is also the American president becomes a strong pro-green leader—this would move the country. He suggests that President Bush must use the “bully pulpit” of the presidency to encourage the country to adopt a strong pro-green policy. He proposes leveling the playing field by enacting a gas tax and removing the various oil subsidies that have artificially kept the price of oil low. Higher oil prices will force the American people to recognize that the price of oil is never going back to what it was. Secondly, he suggests that the government become the major early adopter and set high standards for its suppliers in energy conservation and innovation. Also, the American government needs to re-examine its position on the Kyoto Protocol and engage in international conservation initiatives if we expect to continue as a major world force.
Friedman suggests that an artfully crafted, strong pro-green government policy led by President Bush would be history-making and enable the US to lead in the 21st century. He cites a recent poll that suggests the American people are ready to support such a move. When asked if they would support a gas tax, 85 percent of the people polled were against it. However, when asked of they would support a gas tax from which the proceeds would be used to make the US energy independent, 55 percent were for it. Further, when asked if they would support a gas tax if its proceeds would be used to combat climate change, 59 percent were for it.
Friedman views present political efforts as minor at best and not likely to engender the major transformation the country needs. He believes that Al Gore’s movie, “An Inconvenient Truth,” is incredibly compelling, and Al Gore is sincere and on track on energy issues. However, he does not believe that Gore demonstrates the compelling leadership necessary to move the nation forward. He sees examples of good political initiatives, such as the state of California’s energy initiatives. He views the NEMW Congressional Coalition as a boutique effort5.
Friedman says we must approach the energy battle with the same seriousness as we did the Cold War. Friedman believes the 21st century will be the Energy Age. He continues to push his agenda through his column and other professional forums6. For a complete transcript of the original interview, refer to the Charlie Rose Website and ask for the interview dated 5/22/06 with Tom Friedman.
1 John Doerr has been a partner of the notably successful venture capitalist firm Kleiner, Perkins, Caulfield & Byers since 1980. Doerr serves on the boards of Google, Amazon, Intuit, Homestore, and Sun, among others. He has been called “the single best venture capitalist in the world” and “the center of gravity in the Internet.”
2 Thomas L. Friedman, The World is Flat