“The pace of change has never been this fast, and yet it will never be this slow again’’- A statement coined by Justin Trudeau, the prime minister of Canada sums the emotions and the key message derived from the World Economic Forum during the meeting at Davos. Despite solid growth and a buoyant equity market the gathering at Davos was overshadowed by fears of looming woes, from trade protectionism leading to clashes between great trading powers, the fear of the fragility of nation states in the wake of a digital democracy, ‘’The Fourth Industrial Revolution”- short hand for ubiquitous automation, big data and artificial intelligence - and finally the fear of the gaping hole in global economic governance. In light of this, these questions still stand: should businesses be taking a bet on their energy needs? Should your business switch to renewable energy sources like solar power and go green? Is it time to automate the business and manage data properly? The answer is an emphatic yes, and just like the previous industrial revolution, there are always winners and losers and at this point the urgency of jumping on the band wagon of a green world and a digital democracy cannot be overemphasized.
To address this, let us look at General Electric’s big bet and gamble on fossil fuel. Last March executives at General Electric power plant business in conjunction with a financial firm Lazard presented a bullish forecast to Wall Street for the year. In their presentation they claimed that natural gas, coal and even some nuclear power plants were the lowest-cost producers of electricity on the planet, cheaper than wind or solar. Did that big bet go in their favor? Certainly not! Although GE’s shares rose 2 percent during the announcement, the forecast turned out to be a mirage and rather than rising, GE Power’s profit fell 45 percent last year and shares have fallen by more than 50 percent since the forecast last March.
The truth is wind and solar now cost substantially less than gas and other conventional energy sources and to bet your company’s future and fortunes on this is akin to the gamblers ruin where the gambler eventually goes broke playing a fair game against an opponent with infinite wealth. Proponents against the green revolution like the USA evident in their opting out of the Paris Climate Change Agreement and the introduction of Trump Tariffs could throttle back rapid growth in the US economy with a ripple effect across countries as the Dollar is the global reserve currency. In support of this and coupled with other reasons, the Dollar trade-weighted index has dropped 2.5 percent so far this year which is said to be a continuation of a fall that began in early 2017.
It cannot be business as usual as we are on the verge of the Fourth Industrial Revolution. Change must be quickly accepted and inculcated into the fabric of businesses. Consider the changes being wrought in the insurance business for instance. For over 200 years, it has been based on the notion of risk pooling: average the cost of insuring individual property and divide the cost among the collective. Now in the wake of data and technology, insurance groups will be able to monitor information from tracking boxes in cars, and sensors embedded in homes, inverters provided by solar panels to craft hyper-personalized policies.
One of the ways to ensure survival of your company in the years ahead is to take a close look at your energy needs. The reality is, every business owner and nonprofit manager wants higher profit margins. One of the most unpredictable expenses eroding cash is your electricity bill and its extremely paramount that businesses put that expense in check. Replacing your traditional energy provider with renewable energy sources like solar power and wind will shrink or eliminate your electricity bills and that’s fact. From the strong return on investment (ROI) on renewable energy, to the tax and financial discounts and the environmental impact, renewable energy will certainly deliver profound business returns and usher your business into the new world.
