They’ve passed every test, cleared every hurdle, jumped through every hoop.
Now, all that remains is to unleash them on the world.
But wait— what’s this?
Ah, yes, there’s one more challenge. They must now across the valley of death.
All new products must pass through here before they reach the market.
Many never make it out, and sometimes that’s OK—
if they don’t work, don’t fill a need, or for any number of other reasons.
But inventions that could help address massive global issues also face this risk.
That’s because a technology’s potential isn’t the only factor
that determines whether it will succeed.
The valley of death is especially risky for innovations
involving complex physical objects as opposed to software,
and for those in highly regulated industries,
like medicine, building materials, and transportation.
Regulations and other obstacles aren’t inherently bad—
they’re often designed to keep people safe—
but they do tend to scare off investors,
and that’s what traps good ideas in the valley of death:
their funding dries up before they can become profitable.
One of the fields where this problem is most pressing today
is zero-carbon technologies.
They’re essential to our future
because they will help us eliminate greenhouse gas emissions
and stabilize our climate.
But they also have features that make them particularly vulnerable
in the valley of death.
Let’s look at why that is, and how we can change it.
All new technologies must go through a development phase
before they can become profitable.
For zero-carbon technologies,
the costs of this phase are high, the timelines are long,
and, in spite of the good they can do,
demand is often low because they can require big changes
in both infrastructure and consumer behavior.
For example, electric heat pumps don’t burn fossil fuels and,
when you factor in savings on energy use,
are cost-competitive with gas furnaces,
but homeowners only change their heating and cooling systems every few decades.
Direct air capture technologies, meanwhile,
remove CO2 directly from the atmosphere.
We need these technologies to reach our emissions goals,
and several of them have already been proven to work,
but they’re at risk of getting trapped in the valley of death
because they're expensive.
This creates a vicious cycle because the best way to lower costs
is by, well, practicing: making more of a product and refining it.
But high initial costs scare off investors,
and without their money,
companies can’t continue to develop their technologies—
and can't ultimately decrease costs.
Fortunately, there’s a way to break this cycle:
governments can help close the gap,
when private investors won’t fund technologies
with such a high potential for social benefit.
This isn’t just theoretical:
in the 1990s, functioning solar panels existed,
but weren’t widely adopted because of their cost.
To change this, Germany offered government loans to companies creating solar panels,
and legally obligated utility companies
to buy electricity produced using renewable energy.
The U.S. and China followed suit by financing major solar panel projects.
The cost of solar has dropped almost 90% since 2009,
making it much easier to adopt.
A similar thing happened for wind energy:
during the oil crisis of the 1970s, Denmark invested in wind power
and started taxing winds’ fossil fuel-based competitors.
Other countries took similar steps,
and as more wind power was generated worldwide,
the costs of this technology dropped dramatically.
These success stories tell us that government initiatives work—
initiatives like boosting spending on research and development,
offering tax and loan incentives to startups
that want to develop zero-carbon technologies
and consumers who want to buy them, and putting a price on carbon emissions.
We need governments to do what they did for solar and wind
for many more innovations.
At the end of the day, ideas and inventions alone
can’t solve our most daunting problems—
policies and markets have to be shaped
so the most promising technologies can succeed.