8 success factors for change

1. Innovation fields: Looking to the future

Austria is already well positioned in specific fields such as supplying parts for innovative energy technologies, heat pumps, solar thermal systems and climate-neutral construction. The goal of reaching climate neutrality by 2040 opens up further opportunities. “In the future, a lot will revolve around energy flexibility and a circular economy,” states Volker Schaffler, head of the Energy and Environmental Technologies division at the Climate Action Ministry. As a result, new technological solutions and innovative services could become more important: from electricity storage and carbon capture utilisation to forward-looking data management. For Volker Schaffler, the plant construction industry, which makes it possible to produce energy technologies in the first place, is also a “local treasure that has yet to be fully tapped”.

Strategic trend and forecast management helps companies identify and shape fields of innovation. It is important to consider funding opportunities to cushion the economic risks at an early stage. For example, the Ministry of Climate Action plans to launch an innovation campaign for the period from 2024 to 2026. Around 2 billion euros are to be invested in research, technology and innovation, including in areas such as the transition to clean energy, production and circular economy. When it comes to developing innovations, we need to think outside the box in general: “Today, there are hardly any purely Austrian projects, research or technology development.”

2. Vision and mindset: Approach opportunities openly and flexibly;

Implementing the transition to clean energy requires the business community to be actively involved. “Smart regulation creates the conditions. But the transformation of our energy system can only succeed if it is driven by the companies themselves. Innovation is the biggest factor,” says Werner Hoffmann. He manages the Institute of Strategic Management at the University of Economics and Business Vienna and supports companies as a business consultant on their path to greater sustainability. The altered market environment requires two characteristics above all else: resilience to deal with uncertainties and agility to exploit new opportunities and scale innovations.

In order to survive in an increasingly dynamic market environment (VUCA = Volatility, Uncertainty, Complexity, Ambiguity), the mindset of many companies needs to change. Anton Schilling, managing partner of Vienna’s Innovation Consulting Pioneers, cites “being open to exploring new ideas and collaborations with new players in the market environment” as prerequisites. “We see the challenges driven by the expectations of customers and the environment as an opportunity for companies to reposition themselves strategically. Visionary realignment is an essential building block for successfully mastering change.”

3. Corporate culture: A clear commitment to innovation

The experts interviewed agree on one thing: successful innovation takes ideas, courage and enthusiasm. Successes should be communicated openly and employees encouraged to share their ideas. “It is incredibly important and, at the same time, challenging to motivate the driving forces behind innovation and keep them on board in the long term,” says Anton Schilling. A good culture of innovation requires diversity. It requires not only technical, but also, for example, economic, legal and social skills. What’s more, completely different skills are needed at the individual phases of development.

It’s no wonder, then, that corporate culture is a sticking point where many innovations fail, alongside strategy, resources and structures. “The best innovation strategy is completely useless if the company’s culture is bureaucratic and therefore anti-innovation,” emphasises Werner Hoffmann. Senior management must demonstrate the appropriate attitudes and mindsets, and demand the same of its team. And internal communication also plays a central role – because even colleagues who are not directly affected should feel the spirit of innovation and contribute to projects.

4. Strategic partnerships: Creating win-win situations

One thing is certain: no company can manage the transition to clean energy alone. Collaborations open up new perspectives and create win-win situations. One example is the VERBUND X Accelerator: since 2019, the energy company has been bringing European climate tech start-ups together with strong corporate partners. “Both sides benefit from each other: start-ups gain access to markets and customers, and established companies can quickly advance new ideas and technologies and engage strategically,” emphasises Franz Zöchbauer. He is head of Corporate Innovation & New Business at VERBUND.

As Tanja Spennlingwimmer points out, it is important to take a holistic view of this. She is head of IP Management, Deep Technologies and Entrepreneurship at the development bank Austria Wirtschaftsservice (aws). “Green innovation also requires social innovation, because we need to bring society on this journey with us. And it needs digitalisation, because data is really crucial for using energy even more efficiently.” For example, aws is using the Preseed and Seedfinancing Programme to promote the further development of innovative and green start-up ideas that provide added value for society. Around 80 projects like this are supported each year.

5. Development: New technologies and collaborative innovation systems

From smart energy storage to ever more efficient solar panels, to upgrading gas grids to transport green hydrogen, the energy transition is closely linked to new technologies. Above all else, the International Renewable Energy Agency (IRENA) cites the use of renewables, the expansion of energy efficiency and electrification as steps towards reducing emissions by 2050. But no technology will advance the energy transition and solve climate problems. This requires collaboration and networking.

In addition to companies and start-ups, universities and other research institutions are key actors when it comes to developing innovations with added value for society and the environment. Tanja Spennlingwimmer emphasises the importance of collaborative innovation systems: “By working together on issues, we can drive innovations forward much more quickly – and today, speed is everything”. Cross-industry collaborations are becoming increasingly necessary: “Energy and sustainability are no longer a specific sector per se, but a broad topic that necessitates different approaches.”

6. Innovation process: Reaching the goal in several phases

The innovation process usually starts with a specific problem from the customers’ perspective: “This gets analysed and a solution is developed over several validation steps,” says Anton Schilling. The problem-solution fit process is followed by product-market fit with a first “minimum viable product” and limited functionality. Once the product is ready for the market, it is time to scale. “The aim is to automate as much as possible and improve the customer experience to enable exponential growth.”

Developing new solutions requires methodological approaches and processes. In many cases, initial ideas are developed using design thinking, and lean start-up methodologies help elaborate on them, conduct experiments and gain insights. Agile project management supports the implementation and prioritisation of product features and helps projects reach their goals faster. “Many of the innovation methods mentioned can already be supported using generative artificial intelligence. A lot is happening at the moment,” explains Schilling.

7. Resources: Innovation needs financing

Developing innovations for the energy transition requires money and resources. Investments in start-ups can speed up processes, as evidenced by VERBUND X Ventures, among others. “We are focusing on founding corporate start-ups and investments in European climate tech start-ups,” says Franz Zöchbauer, head of the Corporate Venture Unit. The corporate start-up HalloSonne offers photovoltaic systems for private individuals to rent or buy. Most recently, investments were made in the Austrian start-up UBIQ, which provides AI-supported services for fleet management in the shared (e-)mobility sector.

Dan Matthies, co-founder and CEO of the global venture capital company and think tank Reaction, knows how important it is to promote start-ups for the future. With a global team and partner network, Reaction runs two sustainable funds and connects committed founders, partners and institutions around the globe. “Our mission as an organisation is to improve the lives of a million people in a decade by scaling innovations.” Beyond financing, other material aspects are also crucial for a project to get off to a successful start: the timing, the team, the idea and the implementation.

8. Technology and market maturity: Bringing ideas to life

Getting to market can sometimes be a complex task. The sooner it becomes clear whether an innovation is technically and economically feasible, the greater the chances of it being implemented. What can we learn from other nations? “Greater proximity to customers even during development. That means developing prototypes or demo versions much sooner and testing them with customers,” says Tanja Spennlingwimmer. She also points out another important aspect: protection of innovation. “Many small and medium-sized companies don’t have intellectual property protection on their radar. And it is extremely important for them to protect themselves in international competition.” The aws supports companies by providing advice and grants in this field.

Mistakes can also happen when developing innovations, because it’s the only way for something new to form. “You have to launch lots of innovations and then move forward in smaller investment steps (experiments). This is the only way to gather further insights fairly quickly,” says innovation advisor Anton Schilling. And it is almost just as important to recognise when things have failed and stop them. Failure is also part of further development. The experts agree that the really good ideas ultimately prevail.