How Green Technology is Shaking Up the Economy

More organizations are investing in green technologies, enabling them to operate more efficiently. This has had a positive impact on the economy as it allows these companies to increase productivity and lower costs. And that benefits businesses and consumers by encouraging innovation and creating jobs, further boosting the economy.

Innovation in green technology is happening on both the business and consumer fronts, and the combined impact of each will lower carbon footprints and aid positive economic growth over the next decade, says Ellen Caviglia, CEO of digital consulting company Tonic.

“Renewable energy sources are expected to provide between 45% and 50% of global energy generation by 2030 and between 65% and 85% by 2050,” according to McKinsey & Co.

This technology will help to increase energy efficiency and availability practically everywhere, Caviglia says. Additionally, green trends, such as remote work and digitized business practices, will help to reduce the environmental impact businesses have while still enabling the creation of a more globalized workforce.

Caviglia adds:

Overall, the increased attention to the carbon footprint of consumers and businesses won’t prohibit economic growth but instead provide an opportunity to create more efficient and sustainable products and business practices.

Here are some ways green technology is shaking up the economy, according to experts.

Data Centers Go Green

From 2017-2020, the carbon footprint of data centers in the U.S. doubled, becoming an IT focal point, says Cassandra Garber, VP of corporate sustainability and ESG at Dell Technologies. And with AI’s entry and expected increase in demand for energy and financial resources, data center sustainability becomes an economic issue.

“This reflects in such efforts as developing more efficient computing devices or responsible cooling methods,” she adds. “In fact, Gartner predicts that up to 75% of companies will have developed infrastructure sustainability programs for their data centers by 2027, up from less than 5% in 2022.”

For major IT infrastructure providers, this means advancing product design and solutions to support the goals and needs of customers and partners across the global economy, according to Garber. It challenges organizations to innovate sustainable, cost efficient solutions.

“Data centers are one area that you don’t have to struggle to balance the cost with sustainability goals,” she says.

“Greening data centers is more productive and efficient, decreases your energy bills, and can lead to less spending on carbon offsets. It is also better for the environment and the economy, reducing the data center’s contributions to costly climate change.”

AI’s Support of Green Tech and the Circular Economy

AI technology is playing a key role in supporting green technologies, says Stanton Thomas, senior VP of sustainability solutions at o9 Solutions, a provider of supply chain management solutions. An example can be seen today in the development and commercialization of autonomous vehicles.

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In the near future, Artificial Intelligence (AI) will play a key role in waste management and the reduction of waste-to-landfill via recycling, recovery, and reuse, he says.

“Everything that goes to a waste processing facility can be sorted using advanced mechanical apparatuses working in concert with AI technology and vision systems to identify waste items, such as recyclable plastics, metals, organic materials, that can be diverted from the landfill stream,” Thomas says.

The materials that can be recovered and recycled would then transit into the input stream of another supply chain instead of a landfill, he says.

“The ultimate objective is to reduce the actual amount of material that goes into landfill by up to 90%,” Thomas notes.

If 90% of everything that we normally would have thrown away goes back into various supply chains to be reused and recycled, then we’ve essentially created a sustainable and circular economy.

And that’s important because the circular economy has the “potential to unlock $4.5 trillion in GDP growth by 2030” by reducing waste, sparking innovation, and creating jobs, according to the Boston Consulting Group.

LED Lighting Innovations Rippling the Economy

While long known for its environmental benefits, LED lighting is undergoing a transformative shift as innovations, such as power electronics integration and building automation, are expanding its applications beyond illumination to include data capture, diagnostics, and advanced safety functions, says Fariyal Khanbabi, CEO at Dialight, a provider of industrial LED lighting technology.

“These innovations are having a ripple effect on the economy,” she says.

By making green tech more affordable and reducing the time to return on investment, organizations are prompted to explore additional cost-cutting measures, energy consumption reductions, and more efficient routes to achieving net-zero targets.

With these sustainable practices and demand for additional green technology advancements on the rise, new job opportunities devoted to continuously improving these solutions are being created, with roles in manufacturing, installation, and research and development, according to Khanbabi.

“Environmentally conscious investors and consumers attracted to this level of innovation and culture of continuous improvement are more inclined to support organizations embracing sustainable shifts,” she adds. “This not only strengthens financial security but also reinforces the economic benefits of embracing greener technology.”

Investing in Green Tech Makes Economic Sense

Climate change has put significant pressure on global markets and economic growth, says Marga Hoek, author of “Tech for Good: Imagine Solving the World’s Greatest Challenges.”

“We have the opportunity now to make positive change happen in financial stability and sustainability through targeted impact investing,” she says.

The multiple ways in which tech-for-good innovations can improve business returns and boost the economy mean that investing in green technologies is not just the right thing to do, but it makes good business sense as well.

Accelerating the pace and scale of the innovative tech breakthroughs of the Fourth Industrial Revolution will require strategic investment and bold action, according to Hoek. Business initiatives are key for stimulating green tech sectors to find new ways of investing money, time, and expertise into the sustainability agenda.

“[For example], Belgian green tech startup Act&Sorb is capitalizing on how the recycling of treated and non-treated wood is becoming mandatory in many countries by bringing its disruptive technology to market,” she says.

Act&Sorb’s innovative materials recycling process is creating value from bio-based wood residues, thereby generating industrial potential with significant positive energy efficiency while helping furniture manufacturers and waste collectors contribute to the circular economy, according to Hoek.

“New and advanced materials are important green tech innovations in areas surrounding consumption and production, as the wood and paper recycling market is expected to reach [$34.87 billion by 2030],” she notes.

Green robots also help mitigate climate change and lead the world into a better future through such initiatives as automating agriculture for enhanced water conservation and soil health, Hoek says. For instance, California Bay Area-based FarmWise and Bear Flag Robotics are deploying physical robots on farms to carry out AI-guided precision agricultural production.

“Businesses employing green robotics technology bring financial benefits to the economy while also conserving the planet,” she says. “As the world population grows and climate fluctuations become more pronounced, the agricultural industry is embracing automated green tech that will see an estimated $100 billion in global market value by 2030.”

The Bottom Line

Green technology is shaking up the economy by boosting efficiency, creating jobs, cutting costs, fostering innovation, and reducing the effects of climate change.

As such, the long-term benefits in terms of economic sustainability, environmental preservation, and social well-being make adopting green technology a compelling and necessary undertaking.