Emerging markets fertile ground for future clean technology innovation
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- Category: Asia
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14 Mar 2012
- Published on Wednesday, 14 March 2012 17:40
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While North America and Europe have taken the lead in the development and commercialization of clean technology startups, developing countries in the Asia Pacific region are poised to take a large slice of the clean technology innovation market.
This is based on the Cleantech Innovation Index, a report by the Cleantech Group and the W.W.F. which looked at 38 countries to determine which had the best conditions to produce entrepreneurial clean technology startup companies and commercialize clean technology over the next 10 years.
Denmark was found to be the home of a number of high-impact clean technology startups, with public support for research and development.
The world's largest economy, the United States, placed fifth in the overall index, topping the list for venture capital investment. The country was found lacking in strong governmental policies supportive of clean technology.
But currently, India and China rank 12th and 13th, respectively, in the index.
"These are two huge power markets that need the innovations and are giving birth to companies such as Suzlon and Suntech," said Richard Youngman, the Cleantech Group's managing director for Europe and Asia.
The two countries were cited as having the strong potential to rise through the ranks in the coming years due to supportive governments; large sums of private money ready to be invested; and massive domestic markets - traits they shared to some extent with top performer Denmark.
"The technology is not groundbreaking but the get-to-market deployment is impressive," added Mr. Youngman, speaking at a webinar held by Cleantech and the W.W.F. to discuss the report's findings.
Government support
Governments can indeed influence clean technology innovations by pushing R & D spending as well as putting in place favorable policies to help companies achieve competitiveness and facilitate the wider adoption of the technologies.
Government support played a crucial part in one of the decade's most relevant clean technology success stories, that of solar module giant Suntech. While the company is based in China, its technology originally came from Australia.
"When companies come to China, the government, or the support or the ecosystem here for commercialization helps those companies," said Fred Chang, managing director of venture capital firm Chrysalix Clean Energy.
Mr. Chang said in the case of Suntech, this resulted in the company becoming the leading solar manufacturer in just 10 years.
He expects that China will rise in the index to become one of the top 10 clean technology companies in the next few years.
"The Chinese government is really focused on trying to promote innovation at the university levels and in research institutions. I think China has a long way to go in terms of catching up, but we are finding pockets of interesting innovations," said Mr. Chang.
Innovation and the low-carbon fight
For the W.W.F., which is pushing for an 80 percent global emissions reduction by 2050 in order for the planet to avoid dangerous climate change, the innovation and commercialization of clean technology has a huge role to play.
"China is now the world's biggest emitter of greenhouse gases, with the U.S. being number two, and the speed and urgency by which these countries address their emissions and the speed and urgency with which they deploy capital and technology expertise are really critical influences to global climate change," said Samantha Smith, who leads the W.W.F.'s Global Climate and Energy Initiative.
The W.W.F. had previously said in a report that the world could achieve all its energy needs via renewables by 2050, but this would necessitate rapid up-scaling of both renewable energy and energy efficiency technologies.
In order to achieve this, the W.W.F. estimates that investment in clean technology would need to reach about 1,000 billion euros worldwide in this decade, with clean technology solutions reaching the market over the next 10 to 30 years.
Currently the global clean energy technology market has grown 31 percent per annum between 2008 and 2010, from 104 billion euros to 178 billion euros. Cleantech statistics also show that from 2005 to 2011, investment in clean technology has been in an upward curve, with the fledgling market weathering the 2008-2009 financial crisis a lot better than more traditional industries, a trend that will hopefully continue in the future.
"We think [clean technology companies] are going to take us down the road towards a lower-carbon, climate-resilient world," added Ms. Smith. (Katrice R. Jalbuena)
