by: Thomas Schmitt
The CleanTech Forum in Bilbao is a meeting of entrepreneurs and investors who are driving growth and innovation in technology under the common belief in supporting “clean” technologies. Clean technology, or “CleanTech,” is not an industry per se, but rather an investment theme that refers to technologies that are intended to replace older, pollution-producing products or perform an existing or new function with little to no environmental impact. This includes the renewable energy sector, which is of particular interest to me.
This conference gave me an increased sense of how venture capital functions in the field of technological (and therefore regional and economic) development. It is the lifeblood of innovation, but it does not flow independently of government policy. There are many challenges for policymakers in the attempt to channel venture capital to a region. One of the most common remarks that I heard was that policy has to remain consistent over the long-term, as well as transparent and adaptive to future changes. Technology needs time and a lot of support before it becomes self-sustaining commercially. Politics is anything but consistent, and therefore policies to support innovation can also waver and cause great disruption to the technological development process. Many industry leaders also seemed to agree that clean technology companies (especially renewable energy tech) need to start investing in politics, to organize as larger business associations and bring pressure to bear towards changes in policy. They feel that as they mature as a field, they will need to provide a united front against older, more-politically-established, non-clean industries that benefit from maintaining existing unfair policy advantages. In other words, they need to start competing in the political realm, as well as in the market.
A few examples of my encounters at CleanTech Forum:
Autodesk: The American company Autodesk is a supporter of CleanTech Group, and their representatives were on hand to explain how their company supports emerging clean technologies. Autodesk essentially provides hundreds of thousands of dollars worth of industrial design software to young companies in the field of clean technology (including renewable energy). In this way, they step in to provide an incentive to innovate, providing a subsidy in the form of extremely expensive software – saving a young company a great deal of money, much like a tax subsidy would from the government. In this way, the Autodesk model showcases how industrial stimulus is a responsibility and function that stretches beyond the public sector, and it illustrates an innovative way in which business can support business rather than simply expecting government to support business. The long-term dividends stemming from this type of support are also highly beneficial to Autodesk.
Latin America focus: Some of the largest economies in the world will be in Latin America soon and are quickly further liberalizing their economies to attract foreign investment, and interest in clean technology is growing. I had the chance to converse with the Assistant secretary of State for Science, Technology and Higher Education (Evaldo Ferreira Vilela) in Minas Gerais State, Brazil. In his public discussion, which was clearly intended to entice investors, he talked about a Federal investment package for innovation US$16 billion from the Agência Brasileira Da Inovaçáo. In his chat with me, he told me that even though they design strong policies in Brazil, they have a problem with long-term follow through and implementation.
CENER Tour: We took a tour in a small group the day after the conference ended. By bus we travelled through the mountains of Basque country to a ecology-minded region called Navarra. This state contains CENER, the national renewable energy center. CENER was an excellent example of applied long-term government policy in the field of technological and economic development. The government built these laboratories to advise and assist private industry in the area of renewable energy innovation. For younger businesses, the labs work with government funding to help these technologies reach commercial viability. More established businesses, such as those in commercially-sustained technologies as wind and solar photovoltaics; these become clients for the lab and must pay for testing and advice. But in these cases, private clients can expect the best service and expertise from CENER because the lab’s operational cost constraints (because of government) support do not compromise the quality of research generated. This 11-year old institution is a fundamental component of the innovative growth in clean technology in the Basque region, and in greater Spain as well.