The Dilemma of Proven Innovation in Energy and Oil & Gas
Talking about great innovation, Steve Jobs, one of the greatest innovators of all time! “The Innovators Dilemma: When New Technologies Cause Great Firms to Fail” (worth reading) the only business-related book on his list of favourite books.
So, what is the overall dilemma of innovation? It all comes down to whether companies want to proceed on meeting their customers’ needs or focus on the prospective need of new customers.
Disruptive innovation breaks into the market at the bottom, not appealing to large traditional audiences or companies.
Although, they can work their way up becoming a differentiating niche in the market and capitalising against less adept market leaders.
In 2018 it was stated that SMEs in the UK are performing more positively to innovation and those SMEs working together in the UK are nearly 50% better than those in the rest of the EU.
The Need for Innovation in Energy and Oil & Gas
There are several factors that have pushed for innovation within the Energy sector. Before the downturn, Oil was +$100 but suddenly came crashing down very hastily. Jobs within this industry from 2014 to 2016 fell by 120,000 due to the drop in oil prices.
In order to facilitate processes, recover from the crash and create a more efficiency focused industry there became the need for innovation.
The industry is on a push for a lower carbon economy meeting the net zero emissions by 2050, this could also support in creating 1.8 million new jobs within Europe by 2050.
Innovation within the Oil industry has been a slow process with it taking nearly 15 years for the industry to welcome new tech. Companies such as The OGTC have created opportunities in the North East for start-up innovators through acceleration programmes (e.g. TechX Pioneer Programme).
Are start up’s now the future of Energy and Oil & Gas?
Offering Optimum Opportunities
Diagram 1 below, taken from Start-Up Britain, a start-up tracker for the whole of the UK which stopped producing stats in 2016. It shows Aberdeen as a location where a higher number of start-ups are produced, since then start-ups have expanded due to more opportunity in Aberdeen.
The Guardian also stated in 2016 that start-ups within the North East of Scotland have a 9.8% chance of survival, higher than the rest of the UK.
Now in 2019 tech innovation is high priority, start-ups finally have an opportunity! The TechX programme planned to invest in over 100 start-ups and 200 SME businesses in the next 10 years to support in bring in new technology supply chain.
“How can you prove it works”
From AI and Big Data to Robotics and Digital Logistics the energy industry is ready to change but are people willing to try?
Experimentation comes alongside innovation and companies need to be open minded to create change.
Oil and Gas companies were once the instigators of innovation in the original digital age, a distant time before AI and Big Data which led to new hydrocarbon assets and creating a more efficient activity. The industry is capable of change.
So, are we going to break the hesitation of new innovations and fight against the dilemma?