They’ve managed to finish every exam, leapt over every stumbling block, and jumped through every hoop. All that’s left now is to let them loose on the rest of the planet.
But wait, what exactly is this? Yes, there’s one more obstacle to overcome.
They must now make their way across the valley of death. Before reaching the market, all new products must go through this process.
Many never make it out, which is fine in some cases—if they don’t perform, don’t fill a need, or any other excuse. However, technologies that have the potential to solve major global challenges are also at risk.
That’s because the promise of a technology isn’t the only thing that decides whether it can succeed.
Innovations involving complex physical structures rather than software, as well as those in highly controlled industries such as medicine, construction materials, and transportation, are particularly vulnerable to “the valley of death.”
Regulations and other roadblocks aren’t necessarily bad—they’re mostly put in place to keep people safe—but they do appear to scare away investors, which is why promising ideas get stuck in the valley of death: their money runs out before they can turn a profit.
Zero-carbon technologies are one of the areas where this issue is currently most pressing. They’re critical to our future because they’ll aid in the reduction of greenhouse gas emissions and the stabilisation of our atmosphere.
They do, however, have characteristics that make them particularly vulnerable in the valley of death. Let’s take a look at why that is and what we can do about it.
Before being profitable, all new inventions must go through a development process. The costs of this process are high, the timelines are lengthy, and, despite the good they can do, demand is sometimes poor because they can necessitate significant changes in infrastructure and customer behaviour.
Electric heat pumps, for example, do not burn fossil fuels and are cost-competitive with gas furnaces when energy savings are factored in, but homeowners only replace their heating and cooling systems every few decades.
Meanwhile, direct air capture methods eliminate CO2 from the atmosphere directly. We need these technologies to meet our carbon targets, and some of them have already been proven to work, but they risk being stuck in the valley of death due to their high cost.
This creates a vicious cycle because the most effective way to reduce costs is to practise: make more of a commodity and refine it.
High initial costs, on the other hand, deter investors, and without their capital, companies can’t continue to develop their technologies—and thus can’t lower costs in the long run.
Fortunately, there is a way to break this cycle: when private investors refuse to finance technology with such a high potential for social good, governments will step in to help close the gap.
This isn’t just a theory: working solar panels existed in the 1990s, but they weren’t widely implemented due to their high cost.
To address this, Germany provided government loans to solar panel manufacturers and legally required utility companies to purchase renewable energy-generated electricity.
The United States and China followed suit, funding large-scale solar-panel ventures. Since 2009, the cost of solar has fallen by nearly 90%, making it much more available.
A similar thing happened with wind energy during the 1970s oil crisis: Denmark invested in wind power and began taxing fossil fuel-based competitors. Other countries followed suit, and as more wind power was developed around the world, the cost of this technology plummeted.
These success stories demonstrate that government policies such as the research and development investment, providing tax and loan incentives to startups developing zero-carbon technologies and customers interested in purchasing them, and putting a price on carbon emissions work.
For several more technologies, policymakers must do as they did for solar and wind.
After all, ideas and inventions alone won’t solve our most difficult problems; policies and markets must be developed to enable the most successful technologies to succeed.