The way we see it, the future isn’t just about building something new. It’s also about reshaping what we already have. In some sectors, this is easier said than done, but technological advancements are enabling even the most complex systems to update and upgrade how they function in pursuit of more sustainable operations.
What is industrial transformation?
Industrial transformation isn’t merely about integrating the latest technology into old practices. It requires a fundamental rethink and redesign of the way industries operate, incorporating novel technologies, processes, and strategies in a “proactive and coordinated approach to leverage digital technologies to create step-change improvement in industrial operations.”
But where did this notion originate? To understand, it’s essential to trace back to the very frameworks of the industrial revolutions. From the steam engines of the first revolution to the digital ecosystems of the third, each phase witnessed a monumental shift in industrial processes. These shifts were responses to the needs of the times—whether it was rapid urbanization, the emergence of global markets, or the information age. Today, as we stand at the precipice of what many term the “Fourth Industrial Revolution,” characterized by interconnected technologies, artificial intelligence, and biotechnologies, we find ourselves in the midst of yet another tremendous transformation.
It’s a philosophical shift. Historically, industries were built on the principle of extraction, be it extracting labor, resources, or time, to produce maximum output. Today’s transformation, however, is rooted in the idea of “integration.” It emphasizes collaboration between various industry sectors, harmonizing human potential with machine capabilities and, most importantly, aligning economic ambitions with environmental responsibilities.
The impact of industrial transformation
The potential impact of this transformation is immense. Consider the statistics: in the US, the industrial sector contributes about 23% of total greenhouse gas (GHG) emissions. This, at a time when we’re scrambling to cap global warming within manageable levels, is nothing short of alarming. By prioritizing industrial transformation, we’re not only reducing carbon footprints, but we’re simultaneously enhancing efficiency, minimizing waste, and introducing sustainable practices. Getting ahead on a greener future is not just about investing in the coolest new technology or product, but it’s also investing in those that are reimagining traditional industries and processes.
Take steel, for example. Traditional steel production methods have been notorious for their carbon emissions. But with the advent of newer technologies, such as carbon-capture techniques, emissions can be transformed into useful by-products. This not only diminishes environmental harm, but also adds value to the industry’s output and, interestingly enough, we are seeing demand for sustainable steel currently outpacing supply. Industrial transformation startups and companies are positioned at the intersection of innovation and sustainability, aiming to reshape industries for the betterment of the planet.
Another example of an industry undergoing major and much needed innovation is the concrete industry. Concrete, the foundation of the construction and built environment industry, has historically been a notable contributor to carbon emissions. In 2019, it was responsible for approximately 8% of global GHG emissions. Recognizing the environmental implications, there’s a growing momentum towards reimagining traditional practices. Innovation in this space is centered on reducing the carbon footprint of production processes, enhancing the lifespan of concrete structures, and optimizing resource usage. Companies like Canadian CarbiCrete and CarbonCure are creating cement-free, carbon-negative concrete and carbon removal technologies, focusing on the growing market for sustainable concrete.
SaaS for more sustainable processes
While the spotlight often shines on the end products, such as sustainable steel and eco-friendly concrete, it’s the underlying processes that hold the potential to revolutionize industries. Process innovation refers to the strategic reimagination and redesign of operational procedures, technologies, and methodologies used in production. By rethinking how we manufacture, refine, and distribute goods, we can not only improve efficiency, but also dramatically reduce resource consumption, waste, and environmental impact.
Software-as-a-service (SaaS) solutions offer modern computing power and sophisticated algorithms that can help with automated resource allocation and management. Predictive and prescriptive planning and troubleshooting using the latest process data also aids in avoiding system breakdowns or process inefficiencies. Due to relatively low risk and ease of adoption, SaaS is accelerating transitions to more sustainable operations in complex and often critical industrial processes. For example, Pani and Audette are tackling water and energy consumption management in water treatment and commercial real estate portfolios, respectively. Through developing innovative software products that can process vast amounts of customer data rapidly, the two cleantech companies aim to deliver more optimal operating plans and net-zero transition opportunities.
Accelerating impact through investment
Why is it essential for stakeholders, especially investment funds, to focus on startups tackling industrial transformation? Simply put, groundbreaking ideas need more than just vision; they require time and, of course, resources to be able to scale. Ensuring these startups have the capital to actualize their transformative ideas is pivotal for ushering in a new, sustainable industrial age.
It’s worth noting that an investment in industrial transformation goes beyond monetary returns. It is an investment in a vision—a decarbonized future where industries contribute positively to the planet, without compromising their growth.
The evolution of industries is inevitable, and industrial transformation startups are at the forefront of this change. This isn’t just another page in the story of industry; it could be its most defining moment as robust change and demand escalates in the coming years.