Manufacturers that embrace deep tech as a critical driver of competitive advantage can position themselves at the forefront of a sustainable future
In an era where speed, quality, and cost-efficiency was once the driving force behind manufacturing, a new imperative has emerged. Sustainability, previously seen as incompatible with traditional manufacturing goals, is now a strategic necessity. Companies face the challenge of reconciling sustainability with profitability. Deep tech, the convergence of physical and digital technologies, offers a promising solution. As this innovative field matures and gains momentum, it is poised to revolutionise manufacturing by enabling companies to enhance both their sustainability and profitability profiles.
The Global Shift Towards Sustainability
A confluence of factors is pushing manufacturing companies to embrace sustainability. First, the urgency to address environmental concerns is rising due to commitments to achieve net-zero emissions and increasing stakeholder demands for eco-friendly practices. Second, governments worldwide are providing financial incentives and regulatory support for the development of green technologies. Notable examples include the Inflation Reduction Act in the United States and the European Green Deal in the European Union. Finally, transformative technologies are transitioning from the laboratory to practical applications at scale, creating opportunities for manufacturers to seize new markets and tackle supply chain challenges.
To capture the opportunities presented by deep tech, manufacturers must apply these emerging technologies to both their products and processes. Collaboration with the innovation ecosystem, particularly with younger deep tech firms, is also essential.
Enhancing Product Sustainability and Profitability
Deep tech enables manufacturers to reimagine their products fundamentally. Instead of making incremental improvements or partial substitutions, companies can develop new materials that are detached from legacy supply chains and environmental concerns. Geno, for example, produces sustainable alternatives for palm oil and fossil-based ingredients using synthetic biology, significantly reducing the carbon footprint and enhancing supply chain transparency. Modern Meadow has likewise pioneered synthetic biology-derived collagen, partnering with Evonik to introduce sustainable solutions to the personal care and cosmetics sector.
Deep tech can also contribute to supply and price stability by using renewable or more abundant materials, shortening supply chains, and reducing carbon footprints. Niron Magnetics’ high-performance magnets, made from widely available nitrogen and iron, could revolutionise industries dependent on rare earth metals. These innovations align with the shift toward sustainability while bolstering profitability.
Transforming Process Economics
Manufacturers are also re-evaluating their production processes, with deep tech playing a pivotal role in improving energy efficiency. For instance, Boston Metal has developed an electrolytic process for steelmaking that runs on renewable electricity and emits no CO2, addressing a significant contributor to global greenhouse gas emissions. Syzygy Plasmonics’ scalable photoreactor utilises LED light and photocatalytic nanoparticles to make chemical reactions more efficient, reducing the need for combustion and potentially avoiding one gigaton of CO2 emissions by 2040.
Additionally, manufacturers can explore entirely new processes, such as additive manufacturing or precision fermentation techniques, to create conventionally non-manufacturable sustainable products. Companies like Geno have scaled synthetic biology technology to produce sustainable ingredients like butanediol and nylon.
Building an Innovation Ecosystem
Deep tech operates at the intersection of various emerging technologies, demanding significant funding and extended development periods. Traditional manufacturers may find it challenging to navigate this rapidly evolving landscape alone. To make progress, manufacturers should collaborate with partners, including younger deep tech firms and even governments and academia, through commercial alliances, incubators, or ecosystems.
Collaboration, rather than competition, is key to success in the deep tech arena. Established manufacturers can access novel technologies and specialised expertise by partnering with startups. LanzaTech, for instance, collaborates with BASF to convert carbon emissions from industrial processes into sustainable raw materials, benefiting both parties.
Manufacturers should consider partnerships, joint ventures, or M&A approaches when collaborating with deep tech startups, depending on their specific constraints and ambition levels. By leveraging their unique capabilities and relationships, manufacturers can drive value chain transformations that unlock enormous potential.
The Fashion for Good consortium, addressing sustainability in the fashion industry, exemplifies this collaborative approach. By pooling resources and expertise, members are working towards reducing emissions in fashion’s value chain through innovative solutions like Renewable Carbon Textiles, which could revolutionise textile production.