Energy in all its forms--oil, natural gas, coal, wood, wind, solar, hydropower, nuclear, geothermal, and bio-derived fuels--is required on a massive scale to drive economic progress and improve standards of living. (1) Seven billion people use energy each day to make their lives richer, more productive, safer, and healthier. Globally, these individual requirements add up to 560 exajoules (2) of energy each year. Even with significant gains in efficiency, demand is expected to increase 30 percent by 2040 (to 730 exajoules), driven primarily by growth in the developing world, particularly Asia and Africa. The sheer magnitude of this energy demand can be difficult to comprehend, but the staggering scale makes clear that meeting tomorrow's energy needs will require advanced technologies beyond the capabilities we see today. New technologies will change the types of energy we use, initiate shifts in how we use that energy, and generate significant transformation of the fundamental energy landscape. This has been the pattern for energy development over the past 150 years, and it will likely continue. A notable example is natural gas from shale, which was largely thought to be impractical as recently as a decade ago and has now transformed the industry. However, the discovery, development, and deployment of energy technologies requires significant investment of time and money, and investment decisions must be made in a rapidly evolving, challenging market. Meeting the energy demands of the future will require disciplined and efficient research and development processes. Expensive mistakes are easy to make. Disciplined program management is critical, yet organizations must remain sufficiently flexible to recognize and capitalize on opportunities to foster innovation. ExxonMobil has developed a flexible but disciplined approach designed to provide a steady stream of innovations to support its position as a technology leader into the future. The success of that system relies on well-developed technology platforms and outstanding people. Defining Innovation But what is innovation? It is more than invention or the proof-of-principle demonstration of a good idea. True innovations must produce value and have commercial significance. As Richard Luecke and Ralph Katz (2003) state, is the embodiment, combination, and/or synthesis of knowledge in original, relevant, valued new products, processes, or services (2). Within ExxonMobil, we view innovations as being either disruptive/radical or sustaining/ incremental (Figure 1). Both types are necessary for success. A sustained, disciplined, and science-based program can lead to an abrupt change in the progress of technology in a particular area. ExxonMobil has many examples of such disruptive change in our catalyst and modeling programs, as well as the more classical discontinuous innovation. In the discontinuous case, a new but initially inferior technology appears and is quickly accepted on the basis of its simplicity or reduced cost. As the technology is better refined, it eventually displaces and renders the existing, fully capitalized technology obsolete. The refining area offers several examples of this type of radical change. But an organization cannot live on disruptive or radical innovation alone, as they are sporadic in their timing and often evident only in retrospect. ExxonMobil also develops sequential innovations that build from established platforms. The platforms are characterized by a series of connected S curves, producing more valuable next-generation technologies based on what is learned in the plateau regions. We have several examples of this type of innovation in our petrochemical and refinery processes. [FIGURE 1 OMITTED] Finally, there is the progressive track for innovation where a steady investment to refine and improve upon existing technology yields a constant return. This process is analogous to investing in a technology area in which core capabilities provide a constant stream of incremental, yet very valuable improvements. …