Regarding energy, popular misconception is that there is a serious shortage of energy resources. In reality, we have unimaginable, almost infinite energy resources, 99.9999% of which we never even attempt to use. What we really lack is sufficiently sophisticated technology to efficiently extract energy and transform it into a useful form. And what do we need to develop suitable technology? That most elusive but valuable of resources: knowledge.

We can use wind turbine blades to transform the kinetic energy of the wind (ultimately derived from the sun), to the mechanical energy in a turbine, to electrical energy via an induction generator. This can then be transported through cables to undergo any number of conversions, back to mechanical, to heat, to light, or even radio waves, turning an otherwise useless resource into something useful.

Extend this analogy to knowledge itself. We possess an unimaginably abundant resource of knowledge, of which 99.9999% of which is never used, or lies redundant. Some is captured in patents, publications, reports, and even blogs, but most of all it lies in our heads. So in the same way that infinite energy resources need to be effectively tapped, transported and converted, so too does knowledge, from a useless dormant form into something useful.

So if energy has the wind turbine, the PV cells, photosynthesis, electricity pylons, and transformers, what capture and conversion mechanism does knowledge have? Databases? Books? The Internet? These can at best be viewed as storage mediums, and only a part of what is needed. To be really useful, knowledge needs to be dynamic, to flow, and be converted to different forms, just as electricity is converted or oil refined.

The current infrastructure for capturing latent knowledge, converting it into a useful format and enabling it to flow to those who demand it, when they demand it has an immeasurably low efficiency - yet this is arguably our most vital resource!

So what about our infrastructure for the flow of knowledge? Is this not the most neglected of them all? Just as energy distribution is being slowly revolutionized by the introduction of the “smart grid” knowledge is quietly undergoing its own revolution. So what will the “smart grid of knowledge” look like? In a new world of efficiently distributed demand and supply of knowledge, where do organizational boundaries lie? Does this not lead to an ultimately flexible labour market, where a job is in fact only for a few hours or days, let alone a life? It all reminds me of the Bob Dylan lyric, “The answers are blowing in the wind”.

However, unlike in previous recessions, this time round climate change is widely accepted as a fact, and a real threat to the planet. This will make the need for moving towards a sustainable green economy a necessity and not a luxury of fat times.

Albeit news about global decrease of clean energy project finance by almost 25% in the third quarter to $18 billion, and forecasts of further decrease before the end of the year, (http://www.economist.com/business/displaystory.cfm?story_id=12562281), some long-term investors in green technologies are optimistic.

Bruce Pasternack, a partner at CMEA Ventures, is not deterred from green investments and considers such investments profitable in the long run (http://www.greentechmedia.com/articles/q-bruce-pasternack-5234.html). However, he mentions that a piece of advice they give to their portfolio companies, in the current economic climate, is to stick to the core technology and refrain from adventurous forays into the unknown. He believes, with frugality the existing strong ventures can be steered through the credit crunch, although it all depends how long the downturn will last.

In the current economic climate greentech will suffer from finance shortages, like any other industry. The rate of reductions reported above may well be in line with the general decline in investment in other new ventures. The important factor that will be crucial for the future of the greentech industry is not only the short term financial constraints but long term politics of climate change. However, keeping the green agenda on track in an turbulent economic climate is not expected to be easy, as described in an insightful article in the Economist online, titled “Fighting for the Planet” (http://www.economist.com/theworldin/displaystory.cfm?story_id=12494615).

The main argument behind this view is that companies without a healthy innovation pipeline will fall behind the competition as soon as the economy turns upwards again. Additionally, the constraints imposed by a recession may inspire greater creativity, and being forced to prioritize innovation strategies may provide the impetus needed to overcome the common reluctance to “kill” fruitless projects, meaning that companies invest their R&D dollars more wisely.

However, for all but the strongest companies, a recession will inevitably provoke a change of focus in innovation strategy to improve survival chances. One approach is to increase investment in open innovation while reducing internal R&D investment. Another is to focus innovation more heavily on processes than on products: the cost savings from streamlined processes will benefit the company and its customers in good times as well as in bad. Perhaps only a minority of companies will be in a sufficiently strong position to continue to invest in innovation in a similar way during a recession as during easier economic times, and those few are the ones that are likely to leapfrog the competition as soon as the economic cycle begins to recover.

If recession is approaching in Europe, should we expect that companies in the FMCG sector are likely to change the focus of their innovation towards cost-cutting, process innovation, and perhaps open innovation? Which companies will be affected the most strongly? Is it the largest companies that are likely to have sufficient reserves to be able to continue to invest in scoping diverse new areas? Alternatively, is company size or strength a relatively insignificant factor relative to the effect of industry sector, with some industries hit very much harder than others by an economic downturn?