Rebecca M. Henderson

The public debate about how to tackle climate change has been overwhelmingly dominated by the assumption that it can be solved through the adoption of an appropriate pricing regime. This paper argues that while the development of such a regime will be critical to slowing climate change, it is a necessary but not a sufficient condition. We argue that it will also be important to accelerate rates of innovation and cooperation across the economy, and that one important tool for doing this the active encouragement of the development of authentically “purpose driven” organizations.

Artificial intelligence promises to greatly increase the efficiency of the economy. But it may have an even larger impact on the economy by serving as a new general-purpose “method of invention” that can reshape the nature of the innovation process and the organization of R&D. This exploratory essay considers this possibility in two interrelated ways. First, we review the history of artificial intelligence, focusing in particular on the potential for recent developments in “deep learning” to serve as a general-purpose method of invention. Second, we consider some of the implications of this possibility, with a focus on both likely changes in the organization of the innovation process as well as the policy and institutional responses that may be required. We suggest that policies which encourage transparency and sharing of core datasets across both public and private actors can stimulate a higher level of innovation-oriented competition and a higher level of research productivity going forward.

Climate change. Income inequality. Institutional collapse. Sustainable Business Strategy is a flexible, 3 week, highly-interactive online course designed to provide participants with the tools they need to build thriving businesses while simultaneously playing a major role in solving some of the big problems of our time. Sustainable Business Strategy is offered via HBX, the digital learning initiative from Harvard Business School.

Rebecca Henderson is introduced and tells us what she’s interested in at the moment.

Professor Henderson’s current research focuses on the energy, information technology, and real estate sectors and the challenges firms encounter as they attempt to act in more sustainable ways. This work is an outgrowth of her decade-long examination of the organizational and strategic issues that well-established companies face in responding to significant technological and competitive shifts across a wide variety of industries, including semiconductor capital equipment, aerospace, branded consumer goods, automobiles, pharmaceuticals, biotechnology, information technology, and telecommunications. 

Her latest work is motivated by the challenge of climate change. If, as current scientific research suggests, it would be prudent to remove 80 percent of the carbon from the economy by 2050, it is critical to find effective ways to support far-reaching change in both products and processes across the entire economy – and particularly in the energy, information technology, and real estate sectors. Increasing the use of carbon-free fuels is an undertaking of enormous magnitude to the energy industry; real estate is perhaps the largest single consumer of energy; and information technology is the most powerful enabler of change throughout the economy.

In conducting this new research, Professor Henderson is attempting to leverage the insights she has gained in studying large firms that have been particularly successful in responding to major technological shifts. Her previous work highlighted the importance of simultaneously understanding the strategic barriers to change (“We won’t make any money.”) and the organizational barriers as well (“And we won’t be able to get it done anyway.”); of managing overload so that a firm does not become “stuck”; and of learning to communicate with courage and integrity in order to maintain and grow the “relational contracts” that are fundamental to success. Her current research, including work with two large oil companies interested in investing in alternative energy, suggests that these findings are highly relevant to building a low-carbon economy.