Globalizing the ARPA-E Model: Talking Energy Innovation with ARPA-E’s Cheryl Martin
I recently sat down with Dr. Cheryl Martin, the Deputy Director of ARPA-E, the federal government’s premier program for investing in high-risk, high-reward energy research and development. The interview covered a lot of ground and touched on different aspects of America’s energy innovation ecosystem, so I’ve published it in cohesive parts, lightly edited. This post wraps up the interview.
In part 1, Dr. Martin took a deep-dive into the lessons ARPA-E has learned in its few short years of existence. In part 2, we covered ARPA-E’s efforts to link research and emerging technologies to the marketplace. In part 3, we expanded that conversation to cover ways states and regions can collaborate with ARPA-E to move research to the market.
Moving in a somewhat different direction, Dr. Martin and I discussed taking the ARPA-E model global. Many countries, such as the European Union and Japan, have peaked interest in creating a similarly styled research function of their own, recognizing the potential economic and innovation benefits or remaining at the cutting edge of technology. In fact, during ARPA-E’s Energy Innovation Summit, I had numerous conversations with international academics, representatives, and thinkers about whether their country should create its own ARPA-E and most importantly, how?
To start, what should other countries take from the last three or four years of experience from ARPA-E towards building their own type of high-risk, high-return research entity?
Cheryl Martin: When thinking about the rest of the world, there are a couple different things that stand out. Namely, energy industries in each country all have different structures. What’s a particular countries energy mix? Who do they depend on for energy imports? For instance, France [i.e. largely nuclear based] is thinking about things differently than Germany [i.e. a broader mix of coal, nuclear, and renewables]. Does the country consist of mostly an urban environment? How well is the country’s infrastructure built-up? Understanding the differences is the best place to start.
Diving a little deeper, is there one guiding principle other countries could follow to start building a research institution like ARPA-E?
Cheryl Martin: From years in business, I think structure should follow strategy. What are you trying to do? How much of what ARPA-E is doing and is appropriate to the interested country? I would argue not to just drink the cool aide. It’s working for ARPA-E in the United States, but it may not work in other countries. I would love to be able to be bold and say that everyone can be good at everything, but it’s not going to be true.
Countries have certain talents and resources and that’s a major consideration. For example, take the perspective of a leading thinking looking at the United States from the outside. I met Hans Rosling [who spoke at the ARPA-E Summit this past year] back in the financial crisis of 2008 and he was the most enthusiastic supporter of the United States at a time when everyone was kind of down on us. He told me, “the United States is where innovation happens and gets traction.” And he was speaking at it from the perspective that it’s always been this way in the United States. It’s what makes us different. You can quickly look at a new idea or solution, decide if it’s working and move on if it isn’t. That ability to adjust rapidly and keep moving is very much a hallmark of how we do things. And it’s a hallmark of what ARPA-E is doing. So there will be different models [to high-risk research].
I think one of the important reasons other countries are taking a closer look at the ARPA-E model is that if fundamentally seems different. Like we’ve discussed throughout this interview, you’re having unique and different conversations with industry, entrepreneurs, and researchers. You’re setting technology goals and funding projects to meet them. Compared to many of the ways the rest of the world and the United States has historically funded energy research, this is very different. So is one of the potential near-term successes of ARPA-E – and maybe its lasting legacy for other countries to mimic – is that proved a new model for investing public dollars in research?
Cheryl Martin: Absolutely, I think we’re starting to get more comfortable across the United States about having conversations on where something could go in the market while continuing science and the technology research. I think there is always a worry about becoming incremental. But, heck, things only become incremental if you give up on what you said you were going to do in the first place!
Somebody asked me once whether ARPA-E is supporting incremental [research and development] because we were focused on technologies that have a potential commercial application. For example, we’re working on air conditioners so we’re not always working on some whiz-bang technology idea. I respond by pointing out, let’s not mistake “important” for “sexy.” Fifty percent improvement in an air conditioning system is a big deal and it’s really hard, and you know what, that type of improvement is not incremental at all – it’s a breakthrough. Sure we’re not going to get on the front page of Wired magazine, but we should never mistake that for a lack of importance. I definitely think we are changing that mindset.
It seems a lot of the problems with the ARPA-E model – and public research in general – is an aversion to failure. Is the inherent fear of doing goal-based public research investment also about potentially going down the wrong research path?
Cheryl Martin: Without a doubt, the world is going to change while you’re inventing something and you may not get the results you thought, but they still could be important. More important, is whether you engage your network openly to leverage the research you’re doing so you can remain flexible. For instance, say we thought you were going to invent something for magnets, but they won’t work for an electric vehicle, but maybe they’re going to work for this other technology.” That nimbleness is fundamentally important and often missed.
And investing in research this way is beginning to work. We’re starting to see power electronics break into the market. We’re starting to see grid scale batteries make progress. We’re starting to see emerging technologies with commercial sales. When we started we pretty much had lab experiments and we’re just starting to see successes that are building on each other. We can take power electronics, get it on the grid, match it with grid scale storage and all of a sudden more advanced solar and wind technologies can get on the grid. It starts to feed itself.
I have no doubt that there are ways to move these projects to market; we just need more people talking about how to do it. Being three and half years old, we’re still young. But we stop projects that aren’t working and we’re learning as we go. That’s the other piece — the idea that we can talk right up front that some of this won’t work. For example, we’ve stopped a dozen projects. It’s the fact that it’s not a failure, but its failure if we all knew it wasn’t going in the right direction and we wouldn’t talk about it. That’s the failure. Science doesn’t always work the way you want it to. It wouldn’t be science. It would be alchemy. If you could just magically make it all work.