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									MILES BUSINESS PLAN
By Innovative Reflections
MILES is an electric vehicle system for inter-urban truck transportation, and possibly cars,
combining grid infrastructure and batteries. The system is constructed to adapt the electrical
grid to provide power directly to vehicles on freeways while simultaneously charging the
vehicles’ batteries for off grid driving. We propose semi-publicly funded investments in
smart grid, renewable energy, research in the high and medium voltage grid, turfing the
relevant highway lanes1 and erecting the overhead conductor lines and equipment. On the part
of the private sector this will present a significant business opportunity to create MILES
compatible trucks and technology.


Early sketch                                        Photograph of 1:14 model




Business Case
The transfer technology through which electricity is transferred from the road to the wheels of
the truck can be patented and presents a major business opportunity.2 We see the state as the
customer for MILES technology, because the nation state is responsible for providing
infrastructure for sustainable growth and reducing carbon emissions.
The economic advantages are both to be reaped by the state as the primary customer, the
truck producers, the transportation companies and an entire transport sector in need of
reducing emissions and possible carbon taxes. The state as an owner of the MILES grid and
thus as considerable consumer of energy will thus be able to place demands on the energy
industry to deliver renewable energy. This plan will focus on the business case for Denmark.


Brief Background
Transportation accounts for 30% of carbon dioxide emissions in developed countries and 40%
of vehicle emissions are caused by truck transportation. The Danish minister of transport,
Lars Barfoed, has stressed that the Danish transportation sector is in need of profound change
and that the political aim is to be a catalyst for such change. Barfoed has stated that the goal is
to make our nation a testbed for demonstration projects, and and he shares the view of the
current government that Denmark must be known globally as a first mover in cleantech.


1
  We suggest implementing a MILES lane for MILES compatible trucks on highways. Holland for
example has already established “trucks only” highway lanes.
2
  Furthermore, the experience from managing the learning curve can be used to provide consultancy for
the implementation of the MILES system in other nations.

                                                                                                   1
To realize MILES as a sustainable form of transportation the electricity supplied to the grid
must be generated by renewable energy. As such MILES deals with the problem that electric
vehicles have had a short range and heavy batteries have meant that it was not a viable option
for truck transportation. Furthermore MILES will provide the flexibility and power we know
from conventional diesel engine trucks.
MILES will revolutionize cargo transportation into a potential sustainable 100% carbon
neutral business. The growth potential in the transport sector and the feeding industry is huge.
The current financial crisis will require large infrastructural investments for a more
sustainable socio-economic growth, the present market allows for such investments and there
is a clear political inclination towards decisive steps. The existing momentum is fueled by the
private sector, states, regions, cities inter-governmental organizations and companies.
The infrastructural investment required by this system is targeted directly at the state level, as
the existing grid will need to be adapted and more renewable energy must be produced to fuel
it. The market opportunity will be for truck companies to begin producing compatible EV-
trucks and possibly to transform existing trucks. Thus far only 3 states in the world have
become test areas for electric vehicles, Denmark, Israel and California. This presents a huge
possibility for these states to become early adopters of MILES.


THE TEAM
MILES is a venture by the organization Innovative Reflections. Lorentzen and Jorgensen co-
founded Innovative Reflections in California in 2008 to investigate and develop the concept
of sustainability using economic and artistic practice as tools. They founded Innovative
Reflections after working on a project where they investigated the aesthetics and economics
of Silicon Valley and see MILES as a way to put some of these ideas into practice.


Morten Knudsen
Technical Advisor to Innovative Reflections and technician on MILES
Morten Knudsen is the technician who built the 1:14 scale model in collaboration with Lorentzen for
MILES. Knudsen has been a truck driver and has completely renovated his own Scania truck.

Ida Lunde Jorgensen
Co founder and CEO of Innovative Reflections, Cleantech researcher on MILES
Jorgensen holds a Bsc in Business, Language and Culture at Copenhagen Business School, she expects
to graduate with a Msc in Business and Politics in 2011. In 1999 she invented a solarstove with some
classmates and co-founded the non-profit organization Global Ecology. After graduating from high
school in 2004 she spent a year raising funds to implement the solarstove in Mumbai, India. She co-
founded the commercial spin off Sunstove in Cape Town, South Africa the following year. She has
also helped start-up Copenhagen Cleantech Cluster, while working for Copenhagen Capacity.

Claus Andersen
Economic Advisor to Innovative Reflections and MILES
Andersen holds an Msc in economics (cand.polit) from the University of Copenhagen from which he
graduated in 2008. As a student he worked at the Confederation of Danish Industries as well as on the
Danish Welfare Commission. Today he works as an economist for MOVIA a Danish public
transportation company.

Lasse Ernlund Lorentzen
Co founder and Creative Director of Innovative Reflections and Principal Investigator on MILES
Lorentzen is a graduate student at the Danish Royal Academy of Fine Arts, from which he will receive
a MFA June 2009 and a MA January 2010. In 2007 he became a Fulbright Scholar at California
Institute of Technology and Telecommunications (Calit2) at University of California, San Diego
(UCSD), where he was later offered a research scholarship as Lead Researcher at the B.A.N.G.lab at
Calit2. Lorentzen is currently finishing a 1:14 scale model of MILES technology, which will be
exhibited May 16th at GL STRAND.


                                                                                                   2
THE PLAN
There are several economic, social and practical aspects to implementing the MILES system,
these have been outlined in the following chapter.


Timeframe
The implementation of the project will take place in several phases as outlined below:




In the early stage we wanted to test MILES technology in a 1:14 scale model and present it as
a public presentation.
In the second stage, we want to create a full-scale test facility in collaboration with
prospective business partners (Such as the EDISON project for electric cars). Here it is expected
that the first consumer, in this case Denmark bears the cost of the test facility, possibly with
research funds as well as regional funds from the European Union and in collaboration with
private companies who can co-finance the research. We imagine that the first full scale test
and demonstration will have a regional followed by an inter-regional grounding.
From the full-scale test and demonstration (early commercialization) we expect to fully
commercialize the MILES system in an inter-regional grounding. The natural regions of
integration would thus be Northern Germany (via Femeren Belt) and Southern Sweden. In
this stage envision partnering with companies such as Siemens, IBM, Scania, ABB and
Vestas, research institutions such as the Danish Technological University, Aalborg University
and the Danish Technological Institute. We would also engage in political collaboration with
for example the Ministry of Transport as well as the Ministry of Climate and Energy and the
Confederation of Danish Industries.
Beyond 2012 we expect to look at state led implementation in the rest of Europe and as well
as implementation in California (followed by the rest of the US). Innovative reflections plans
to investigate the possibility for such a roll out in its partnering process in 2010, as the
organization already has substantial contacts in California, including Calit2, NASA, Stanford
University, the Institute for the Future, Innovation Center Denmark etc.


Expected technological developments
The truck producing industry is expected to follow the following technological development
in dealing with climate change mitigation:




As the industry is characterized by a high degree of conservatism and predictability we can
assume that the technical forecast is realistic. This forms a solid basis for MILES technology
to be developed both in cooperation with the industry and parallel to it, as described in the
timeframe for implementation. It is central that the combustion engine combined with MILES
technology can be used for the first years, until the grid is fully implemented. The natural
hybridization period will provide a stable transformation of truck transportation to MILES.

                                                                                               3
SWOT Analysis
Strengths                                        Weaknesses
 A comprehensive solution for sustainable        MILES is a costly system to implement
  truck transportation.
                                                  A business which is highly dependent on
 The system is flexible as opposed to             getting the “state aboard,” and relies on
  freight transportation via railways.             political will
 Almost all technologies used already            It will require political agreement and
  exist; they are simply being utilized in a       cooperation at state level
  new way.
                                                  The project requires university incubation
 We have developed one new technology             and research funding for R&D to mature
  to transfer energy from the grid to the          the technology.
  truck.
                                                  The venture currently does not have
 MILES technology can be patented and             sufficient funds for a IPCT Application
  developed with key stakeholders, such as         (international patent) but we have
  Scania, Siemens, ABB and IBM etc.                consulted a patent lawyer and are in the
  Giving each partner shares in MILES              patent process
  technology.
                                                  Truck producers are resistant to change, as
 MILES technology will be able to run on          they have invested in the combustion
  hybrid technology (traditional fuel and          engine.
  electricity) in the early implementation
                                                  Transportation companies and drivers are
  phase.
                                                   extremely entrenched in “business as
 MILES technology will leverage the               usual”
  development in hybrid-electric trucks over
                                                  If the production of electricity does not
  the next 10-15 years, which matches
                                                   come from renewable sources, the use of
  implementation period of MILES into a
                                                   electricity as fuel can be extremely
  100% electric vehicles system.
                                                   polluting.
 There are small signs of change as shown
  by truck producers’ prototype hybrids and
  small (short range) electric trucks.
 MILES does not compromise economic
  growth or the need for flexible
  transportation and can do this while
  reducing carbon emissions.
 Implementing a MILES lane on the
  freeway system does not require complex
  construction changes. The existing
  freeway can easily have the interior lane
  modified. This can be done without
  disturbance of the other lanes.
 Innovative Reflections as the mothering
  organization already has academic
  credibility, as it has been invited to
  sustainability and innovation conferences
  at Stanford University, California Institute
  of Technology and Telecommunications,
  and exhibited other projects at the
  University of California.




                                                                                               4
Opportunities                                    Threats
 The financial crisis presents an incentive      That Better Place may see the project as a
  for large infrastructural investments to         threat, and seek to block implementation,
  boost economic growth.                           as the system can (but is not intended to)
                                                   facilitate the automatic charging of cars.
 A similar scale infrastructure investment
  project (Better Place) has been agreed to       That the venture is not significantly
  by the state and DONG Energy. However            protected and simply stolen by another
  their business model does not address the        company or individual.
  issue of heavy load transportation.
                                                  The financial situation is changeable so
 The Danish government and regions wish           that the incentive for large infrastructural
  to leader the global cleantech market in         investments to boost the economy may
  test and demonstration as well as early          decrease.
  implementation.
                                                  The conceptualization of climate change
 The Copenhagen Cleantech Cluster                 as an important and actionable threat,
  wherein Copenhagen Capacity and a                which humans can in fact mitigate could
  number of high profile cleantech                 change, or cease to be of importance due
  companies (Vestas, DONG, Siemens etc.),          to other technological or political
  universities and instutions (Risø, Scion,        solutions.
  DTU etc.) have launched a DKK 162 mio.
                                                  The technological advance of EV (electric
  initiative to improve the conditions for
                                                   vehicle) batteries may increase faster than
  new and existing cleantech companies, the
                                                   expected, outperforming Moore’s Law.
  organization will be able to assist projects
  like MILES, connecting them to capital          If no intergovernmental agreements can
  and prospective partners.                        be reached it will not be possible to
                                                   develop MILES throughout the western
 The state would be able to regulate the
                                                   world.
  pricing of road use and electricity, gaining
  more control over energy use and                The WWF has stressed that the use of
  congestion                                       electricity as fuel can be extremely
                                                   polluting if the production of electricity
 The financially challenged truck industry
                                                   does not come from renewable sources,
  can become more financially,
                                                   this means that sufficient production of
  environmentally and socially sustainable.
                                                   renewable energy is central to the
 The Danish government has laid out plans         venture’s environmental promise.
  to increase the use of renewable energy
  from 20% to 30% by 2025.
 The Danish government will double the
  budget for energy research to a yearly
  amount of DKK 1 billion.
 Danish (and western) energy use is
  expected to grow by 60% up to 2030,
  implementing the MILES is a way to
  reduce the carbon emissions in transport
  sector while the economy.
 The state can internalize costs of
  implementing MILES and the project can
  be used for financial (or break-even),
  societal and environmental gain.
 An opportunity to use wind power in off



                                                                                                  5
   peak periods
Stakeholder assessment and response
Our stakeholders primarily fall into the following categories:




The assessment and response pertaining to these stakeholders is included in this section. As
outlined in the SWOT the state plays a deciding role in the implementation of MILES. To get
the state “on board” it is central that the public utility and value proposition clearly shows the
value to Danish society. As the environment is a hot and appealing topic, for both voters and
thus legislators the issue is not in fact whether the solution will be considered, but whether the
cost of doing so can sufficiently show the economic, social and environmental advantages.
Getting the state on board, however, will not happen unless the industry “buys in” to the
system, this means that a number individual truck-producing companies and truck-
transportation companies will be needed to advocate the issue. This need gave rise to the idea
of establishing a MILES Goodwill Ambassador Corps (see sales and marketing). Besides the
buy in from a number of individual truck-producing companies and truck-transportation
companies it is central to get the leading industry associations aboard, this counts the
Confederation of Danish Industries’ Transport division (DI Transport) and Danish Transport
and Logistics (DTL - Dansk Transport og Logistik). These are organizations we already have
significant dialogue with stemming from our attendance at various transport and sustainability
conferences. The attendance of conferences to foster and maintain this network is also
described in the sales and marketing section.

Besides the buy in from industry associations, it is central to get the advocacy from political
and environmental opinion leaders, the “self proclaimed” experts whom the people listen to.
This links back to the state as the vox populis is central in most state decisions. It is also
central to communicate the vision and mission of Innovative Reflections as the primary
incubator for the MILES venture, communicating that Innovative Reflections goal is to create
a sustainable business model and that the organization strives to research how economic can
reduce growth reducing our carbon footprint. This in itself, along with the considerable
academic credibility, which Innovative Reflections has already established, having been
invited to sustainability and innovation conferences at Stanford University, California
Institute of Technology and Telecommunications, and exhibited other projects at the
University of California – means that the organization already has some institutional power as
an opinion leader in itself.
This brings us to the last central stakeholders, that of universities and incubation. As
mentioned in the timeframe we want to create a full-scale test facility in collaboration in the
“safe environment” of the research institution with prospective business partners. But as
implementing the full-scale model requires Denmark to be a test-nation, we imagine that the
university setting will provide a safe environment (in the form of institutional support) to
undertake significant research and development to support Denmark as a full-scale test
facility. As Innovative Reflections is about 50% business and 50% research and development,
the university setting is central. At present we have the institutional support of the Danish
Royal Academy of Fine Arts, where we have been given a project room for creating the 1:14
scale model, hold meetings, write on the business plan etc. However already beyond May
2009, the team will require significant funding and quite possibly a research lab to mature the



                                                                                                6
technology and organization. The team will seek considerable consulting, and will begin to
make partnership agreements with appropriate universities and companies in this process.




                                                                                        7
MARKET ANALYSIS
The following sections will briefly discuss the demand and factor conditions as well as an
overview of the truck industry and related industries relevant to the implementation of
MILES. The sections overlap a great deal, and are mainly meant to give a sense of the market
for MILES technology, the information has largely been gathered empirically, from news
papers, internet research, and conferences.

Demand and factor conditions
During 1980s the Danish government enticed massive private and public investments in the
wind energy sector spawning a small cluster in wind which later drew in suppliers and
companies from around the world and the industry quickly became a flagship for the Danish
cleantech sector. Our investments in wind energy also meant that we had to invest in our grid
and electricity regulation early on, these investments in turn made it possible to provide
energy from various sources of renewable energy such as biomass. These early investments
indicate a public interest and favourable demand conditions for projects like MILES.
Today Danish cleantech strongholds lie in research, development, test facilities and a market
full of early adapters. We have cutting edge test facilities for smart grid, electric vehicles,
smart home technologies, wind energy innovations, fuel cells, biomass, enzymes and biogas.
All of the above political, corporate and social parameters indicate a society, which is well
suited to adapt MILES.
Denmark also has a strong voting base and political leadership with regard to the
environment, our Minister of Climate, Connie Hedegaard has ambitious aims both nationally
as well as for an internationally binding a replacement of the Kyoto protocol. At all the
conferences we have attended (see company CV) experts and politicians alike are saying – the
future will bring a price on carbon emissions.
Danish consumers are among some of the most critical in the world and Denmark boasts an
impressive $62,625 GDP per capita, with high and evenly spread disposable incomes, Danish
consumers have been able to place high demands on the origins, development and disposal of
their products. As a result, organic food, fair trade products and recycling has flourished in
Denmark, and an impressive 36 % of all citizens commute to work or school by bicycle.
The conclusion is that if presented with the right value proposition Danes favour products and
services, which have a sustainable life cycle, as such we believe that there is a un discovered
potential in products labelled “sustainably transported.” Finally the Danish state as a buyer
seems extremely inclined to show environmental will and substance, and MILES thus presents
a value proposition, which can help the government demonstrate this commitment.
Historically, Denmark has an unparalleled tradition for cleantech, in 1971 we established a
Ministry of Environment and in 1973 we were the first country in the world to implement an
environmental law. The laws exemplify the political will and societal momentum, which has
formed the base for the Danish cleantech sector.
Being a cold climate, during winter, Denmark has also pioneered the construction of energy
efficient and liveable buildings. As such, sustainability woven into the fibre of Danish
business and society more than it is a niche. We have a unique mixture of historic interest in
sustainability and rapid adaptation of cleantech products.

We have a large government sector and a proactive state, which has played a central role in
many technological developments, and have leading universities in sustainability and
strategic research. Over the past 30 years Danish universities have increasingly undertaken
research of direct relevance to society and in close cooperation with the private sector. These
factors bode well for the development and implementation of MILES.




                                                                                             8
Industry
In this section the truck industry is briefly outlined, with regard to both the truck producing
companies and the truck transportation companies. At present the both the truck producing
companies and the truck transportation companies are under immense pressure.
The truck producing companies (such as Scania, Volvo, GM etc.) are hard hit by
unsustainable business models and little innovation towards environmental sustainability.
Truck producing companies are characterized by an oligopolistic structure, with a few large
companies and extremely high barriers to entry.
The truck transportation companies have been characterized by a mixed market of a few
large, some medium sized and many small players and relatively low barriers to entry. Truck
transportation has however developed a preference for the “hub and spokes” model,3 which
has been efficient to transport large amount of cargo from place to place, focusing on the
overall cost efficiency rather than the cost efficiency of any individual package. Traditionally
truck transportation companies have operated with extremely low profit margins. The focus
on individual efficiency and environmental footprint has raised criticism of this model, the
current financial crisis where the amount of goods has decreased, has exacerbated this, since
half empty containers are now being transported in a both commercially and environmentally
unsustainable way. Moving large amount of truck transport onto rail can not solve this
problem, not only due to rail systems at full capacity for freight, but also due to the high costs
of inflexible transport. In fact, it has been suggested that rail systems could more efficiently
be used for the transportation of people, as they are light, mobile and intelligent goods.
As mentioned in the previous section, there is a significant political move towards looking at
the carbon footprint at a unit level, this means a focus on the environmental footprint of a
person, a product or a service. This movement is gaining strength because it pertains directly
to a cost and allows for a degree of accountability, which has not previously been part of the
commercial market.
In conclusion, it is likely that MILES will be meet by significant criticism from competing
industries in land-based transport such as rail transport companies. And some initial
resistance is expected from the established truck transportation companies. The least
resistance is expected from the truck producing companies, which will be able to become
partners in the production of the full-scale system, and thus will have interest in the patents
and innovations that arise. While the truck producing companies will reap enormous benefits
from future sales, it is central that their engagement in the entire system of transportation will
be greater, as they will need to communicate their need to the developers of the grid and road.
The besides the companies producing consumer products (mentioned in the previous section)
the companies involved in the development of the grid and road form a significant related and
supporting industry. As stated in the business case we propose that the state assume this
significant infrastructure investment and that the state as an owner of the MILES grid and thus
as considerable consumer of energy will thus be able to place demands on the energy industry
to deliver renewable energy. The delivery and development of turfing and test of grid
management can be undertaken in a consortium of players similar to that of the EcoGrid, the
Cell Project and the EDISON project, where several partners from the public and private
sector, energy, infrastructure and vehicle producers collaborate.
As mentioned in the timeframe we envision partnering with companies such as Siemens,
IBM, Scania, ABB and Vestas, research institutions such as the Danish Technological
University, Aalborg University and the Danish Technological Institute. Such partnering to
advance a sustainable technological development is exemplified by the aforementioned
projects (the EcoGrid, Cell Project and the EDISON project).

3
    Which is also used by the airline industry.


                                                                                                9
FINANCIAL AND ENVIROMENTAL ANALYSIS
The following chapter has been divided into two sections. The first section focuses on the
costs of the entire economy for establishing the MILES, as final cost model for the project
will be decided upon in cooperation with the state, universities and private companies, we
have chosen to look at outlining the relevant principles for calculating the cost of the project.
In this section we will also focus on outlining the relevant principles for calculating the
operational cost and benefits of the project. In the second section, we briefly look at where
Innovative Reflections is with regard to funding and outline the costs of starting up MILES.


Section 1
The goal with this section is not to calculate the exact financial and environmental costs of the
project but instead to outline the principals for which it will be done. The reason for this is
that we have just started a full scale macroeconomic analysis, and thus presenting initial
results would be more misleading than enlightening.


The project will be divided into two phases. A project phase and a production or operating
phase. The project phase is characterized by containing only costs and no benefits. The
operating phase is the whole reason for the project and is characterized by containing all
benefits (but also costs). For the project profitable on the whole the initial costs of the project
phase have to be smaller than the discounted net benefit of operating phase. Therefore we will
start out by analyzing if the operating phase is producing a positive net value and second to
evaluate if this benefit is higher than the initial costs. Written in another way:


                                       It  Ct
                           
                               n N
Step 1: Evaluate if 0                                , where N is the lifetime of the project I is the benefit
                               t 2
                                      1  rt 
                                                  t


and C is the cost. If this is fulfilled continue to step 2 else stop the project.


                                      I t  Ct
                           
                               n N
Step 2: Evaluate if C1                               . If this is fulfilled then execute the project.
                               t 2
                                      1  rt 
                                                  t



The operating phase
As we see above the operating phase has four unknown factors: The production costs, the
production benefits, the length of the lifetime period for the project and the path of the
interest rate. Projects like MILES are highly influenced by the interest rate since costs and
benefits are appearing in different time periods.
The benefits and costs:
Basically the sale is just a mark up on the cost. The annual income of the project will be the
cost per unit of power plus the tax on using MILES times the annual number of units:
It   ct  m * X t where ct is the average unit cost in year t , m is the tax on MILES and
X t is the consumption of power in the MILES system in year t .
The cost is given by:
Ct  ct X t
Therefore the profit of year t can be calculated as:
P  It  Ct   ct  m * X t  ct X t  mX t
 t




                                                                                                           10
Afterwards the demand, X t has to be determined:
The demand for using MILES will depend on many factors: Negatively on the price of the
power in MILES, ct  m , positive on the price of gasoline, positive on the business cycles and
so on. In a further research we will need to investigate the demand and market in greater
depth, but we already know some characteristics:
If ct  m  g then X t  0 where g is the gasoline price. This is true since MILES needs an
initial equipment investment from the truck owners which will only be executed if the
investment has a positive net value.
Let us assume that demand function is given as followed:


        f  yt    ,....
Xt                             where y is GDP. The profit function will be given by:
         ct  m
                    F ( gt )



                      f  y    ,....
 Pt  mX t  m
                      ct  m
                                        F ( gt )



If we maximize the profit we will obtain following result:


mMAX  h  gt    , ct   


Pt MAX  i  gt    , ct    , yt   


If we add this information we obtain the following result:


                                       i  gt    , ct    , yt   
Project profit   t  2
                                n N
                                                                              C1
                                                    1  rt 
                                                                t



The MILES tax which maximizes the profit, mMAX is not necessarily the tax which
maximizes the environmental improvement since the project contains a strong positive
externality if power production used for one truck miles is cleaner than the gasoline used for
one mile. We call tax mCLEAN and:

mMAX  m*  mCLEAN where m * is the political optimal tax.


In other words it is political tradeoff between financial and environmental sustainability. It is
worth noting that under these assumptions mMAX will still be an improvement of the
environmental sustainability compared to a situation without MILES.




                                                                                             11
Section 2
As mentioned goal of this section is not to present financial statistics but rather to look at
where Innovative Reflections is with regard to funding and briefly outline the costs of starting
up MILES.
Innovative Reflections has provided the forum for developing MILES. MILES is currently in
the earliest stage of development. We have made a 1:14 scale model to show a proof of
concept. We have financed the project from our own pockets thus far, but we have now
reached a point where we must seek funding, incubation and professional support from the
outside. We wish to consolidate the business so that we can apply for public funding. The
intent of the business venture is to take the business to market and eventually become part of
the larger organization, however we are fully aware that bringing the model to the market will
require hard work, extensive collaboration and expertise of others. It will also require a strong
and capable team, political will and a public full-scale demonstration project, similarly to the
EDISON project on Bornholm. We are also inspired by the ability of Californian project
Better Place to partner with DONG energy to bring personal electric vehicles to the Danish
market and believe that there is a lot to be learned from their financial model, a mix of state,
venture capital and capital funds and see this model as a potential one for full
commercialization.
The cost of running Innovative Reflections next year is estimated below, this is is the absolute
minimum for developing MILES technology, but does not include the cost of a full scale
model or research unit.

 Current estimate without salaries
 All figures in DKK       Month Year
 Research and
 development                4000   100000
 Office and overhead        4000    48000
 Transportation             2000    24000
 Conferences                2000    24000
 Insurance 1:14 sc. model    500     6000
 Telephone & internet        800     9600
 Lawyer                             10000
 Accountant                         10000

 Misc.                               1000       12000
 Estimated total                               243600

The cost of creating a full-scale model with no business partners or incubation and fully
funded research labs has been estimated below. What we would do in this “low budget”
model is simply to adapt a truck to show the truck technology in full scale and build a 1 mile
test lane. This model is not ideal, as the organization does not currently have the funds to do
it, however we have presented this “low budget” model to show that we would undertake this
investment, raising funds by applying for grants and entering in competitions, which would
stall the process and would not generate the contacts needed for commercialization.


 Full scale - low budget
 Technical equipment
 Truck
 Low budget truck adaption                     300000
 Low budget 1 mile lane                        300000
 Lawyer and accountant                          20000
 Estimated total


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In the ideal model to reach full commercialization we want to create a full-scale test facility in
the “safe environment” of a research institution with prospective business partners. As
Innovative Reflections is about 50% business and 50% research and development, the
university setting is central. At present we have the institutional support of the Danish Royal
Academy of Fine Arts, where we have been given a project room for creating the 1:14 scale
model, hold meetings, write on the business plan etc. However already beyond May 2009, the
team will require significant funding and quite possibly a research lab to mature the
technology and organization. The team will seek considerable consulting (incubation) and
will begin to make partnership agreements with appropriate universities and companies in this
process. This opens up for the possibility of co financing, such as the projects
Højteknologifonden help finance, it is also possible that the project phase can be co-financed
(and geared) with European Union and state funds.1


    Full scale – fully funded budget estimate
    (R&D to run over 3 years 2010-2012)

    Costs estimate              1 year           Total
    Research lab            1.700.000       5.100.000
    overhead covered
    2 PhD positions           500.000       1.500.000
    1 Economic advisor        480.000       1.440.000
    1 technical advisor
                              480.000       1.440.000
    1 technical advisor
    part-time                 240.000         720.000

    Estimate of full
    scale model
                2
                                           10.000.000
     Energy supply
     Transformer station
     1 km lane
     Technical equipment
     Truck

                            3.400.000      20.200.000
    Estimated total

Notes
We fully understand the need for an accountant to advise and document our business,
research and development; this is one of the first things, which we will invest in.
1
 If the project is co-financed, the funds which the university housing the research institute has
to provide can be as low as a tenth of this figure, as their financial input is geared by public
institutions, and private actors may finance part of the costs.
2
 It is important to note that the final cost model and estimates will need to be developed over
time in cooperation with the state, universities and private companies.




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MARKETING STRATEGY
Instead of a classical 4p’s (price, product, promotion and placement) sales and marketing
strategy, we will focus on marketing with a more human interaction, as many of the pricing
models for the project will be decided in cooperation with the state and private companies.
The product – or value proposition is clear – if implemented correctly MILES delivers the
promise of sustainable and carbon neutral transportation of cargo on land. Thus the promotion
will focus on communicating the environmental and economic advantages to the political
stakeholder and the public. But also being visible in the research community, to engage
prospective partners and having an amount of spokes people both to help the project and to be
ambassadors for MILES. Lastly we will focus on “telling the story” of the truck driver, the
artist and the economist who decided to fundamentally change one of the most important but
most polluting industries, upon which our globalized world depends. As such the marketing
strategy uses the following key initiatives:


 Political Lobbying
 Conference Participation
 Miles Goodwill Ambassadors Corps
 Press relations


As we are a small organization, we will use our professional networks to get MILES out,
Innovative Reflections brand is founded on the principle of environmental, economic, and
social sustainability, this is the brand we wish to convey, but we don’t want to do it via
expensive advertising campaigns, but rather by showing a small number of important
stakeholders by showing them out project. The brand thus emerges as an idea that these
principles are lived by the group and exemplified by the project rather than added to the
product before it reaches the market.
It is also important to us that we maintain our integrity, academic credibility, and
transparency in the way we work, partner with business, universities and how the project
evolves. We would like to remain closely connected to the research institutions from which
we have emerged and which have supported us in our endeavor. This especially applies to the
Royal Academy of Fine Arts, which has housed our project room, provided tools and
institutional backing, and the opportunity to exhibit our model to our stakeholders. But also
to Copenhagen Business School and the University of Copenhagen. Furthermore as our
project is so heavily dependent on research, close cooperation and dialogue with research
institutes of technical strength such as the Technical University of Denmark, Danish
Technological Institute and Aalborg University is central.


Political Lobbying
As mentioned in our partner section we will pursue significant political lobbying, to get our
value proposition to the table of political decision-makers. However we aim to involve these
decision makers in the process to arrive at a final cost model for the project in cooperation
with said universities and private companies. We believe in the value proposition of MILES,
and our criterion for success is an implementation, which ensures that the complete
environmental, economic, and public utility is achieved. As such we will engage in an active
dialogue with the Ministry of Transport as well as the Ministry of Climate and Energy and the
Confederation of Danish Industries, where we already have significant contacts.




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Conference Participation
Part of what has educated, challenged and driven Innovative Reflections forward has been our
very active participation in conferences, where the idea of re-inventing business with the
ethical concern as a point of departure, using aesthetics and economics as tools to create a
sustainable business, has been extremely well received. Not only have we attended many
conferences, but we have been able to chose from numerous invitations to attend various
conferences and engage in various collaborations. As such conference participation has been
an extremely awarding and simple way to get in touch with the people we wish to reach.


MILES Goodwill Ambassadors
The idea for MILES Goodwill Ambassadors is inspired by the Copenhagen Goodwill
Ambassador Corps which is used by Wonderful Copenhagen, the official tourist agency for
Copenhagen and Copenhagen Capacity the official inward investment agency of Copenhagen
to attract foreign tourists and business. The Copenhagen Goodwill Ambassador Corps uses
prominent Danes abroad, who help “sell” and brand Copenhagen, but the corps consists only
of volunteers and thus exemplifies an non-financial commitment to the cause. We want to
pursue a similar model both nationally and internationally using prominent scientists,
architects, and politicians, at home and abroad to “sell” the idea.


Press Relations
It is rare that truck drivers, artists and economist collaborate, truck drivers and artists are
often employed in the economic system, where truck drivers “facilitate” business as usual and
aesthetics are used to “beautify” it.
Likewise in periods of economic growth art is often succumbs to pure commoditization. We
have seen artists work like business men – and businessmen adopting “creativity” as a
strategy – and some are formidable at selling art, while others specialize in banking on their
creative talent in the workplace, but it is extremely rare that a sustainable balance is reached.
As mentioned we wish to “tell the story” of the truck driver, the artist and the economist who
decided to fundamentally change one of the most important but most polluting industries,
upon which our globalized world depends. Transportation.
In our careers as artists and economists we have attracted significant academic and media
attention for our work, and we will use these contacts to share the story and development of
MILES, we believe our story is inherently interesting and appeals to both popular, scientific
and academic literature, we must simply present it to the contacts we already have in these
networks.
We are interested in conveying the unique business process and the promise that sustainable
business might be possible.




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INNOVATIVE REFLECTIONS / MANIFEST APRIL 2008

    Mission     To create a sustainable business

    Vision      We envision economic growth reducing our carbon footprint

Innovative Reflections was founded as a multi-disciplinary collaboration between economist
Ida Lunde Jorgensen and visual artist Lasse Ernlund Lorentzen in California in April 2008.

With the aim of re-inventing business with ethics as our point of departure, using aesthetics
and economics as tools to design – a sustainable process, a sustainable product and a
sustainable business.

We are aiming to merge our economic, artistic and academic practices to create valuable
research for a so-called postindustrial western consumer society where cost benefit is still the
dominating paradigm. We still consume, waste and repress third world countries. We still see
our dominating western consumer culture as the only functional model even it has in fact
created a non-sustainable mono-cultural global market place. The primary aim even through
financial aid, is not to help third world countries or fight poverty but to in crease our own
market share. A convention of the nation state and neo liberalism, which have made it the
ruling model in our western culture in both micro and macro-cosmological matters. We
cannot participate in this ignorant and repressive convention of non-sustainable consumerism
destroying the environment and human lives. Business can be sustainable and still make profit
to increase growth. The aim of this project is through innovative reflections to create a
sustainable business for our own benefit but also as a model to follow and develop for others.


Company CV

Apr. 2008       Innovative Reflections founded in San Diego, CA.
Apr. 2008       Nordic Green’08 cleantech conference, Silicon Valley.
May 2008        Invited to innovation conference (INJO’08), Stanford University.
                Presentation of Innovative Reflections at University of California, San Diego.
Jul. 2008       MILES idea conceived, Technological Advisor added to team.
Aug. 2008       Kick-off of Copenhagen Cleantech Cluster initiative, by Copenhagen Capacity.
Nov. 2008       NASA International workshop on pollution prevention and sustainable development
Jan. 2009       Ethics and the Economy conference at Copenhagen Business School
Feb. 2009       Workshop on Transportation, by Øresund Logistics and Transport Økonomisk
                Forening
Feb. 2009       Workshop on Railway Cargo, Danish Ministry of Transportation
Mar. 2009       Transport Conference at the Danish Technological University
Mar. 2009       Climate Change Conference hosted by the University of Copenhagen.
Mar. 2009       Workshop on the future of infrastructure, hosted by Øresund Logistics and Transport
                Økonomisk Forening
Apr. 2009       1:14 MILES scale model under construction.
Apr. 2009       Climate Strategies for Business at Copenhagen Business School
Apr. 2009       Economic Advisor added to team
May 2009        Exhibition of MILES technology at the EXIT exhibition at GL STRAND




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