January 29, 2010
This week we had a kick-off meeting in Brussels for Ecolink+, an eco-innovation project supported by DG Enterprise under the umbrella of DG Enterprise’s Eco-Innovation Platform (Europe INNOVA/CIP). In this project ERRIN is partnering, among others, with Eurada, EBN and two expert consultancies in the area of innovation management and early stage investment, Meta-Group and Europe Unlimited. The ambition of our consortium is to make this project a true reference point for eco-innovation at European level.
This is going to be a project that will help eco-entrepreneurs to share their experiences, refine their business model and improve their internationalisation strategies. We will liaise with a number of leading and emerging green economy regions in Europe to showcase successful support actions for eco-innovation (e.g. pro-active cluster management or public procurement) and to identify and network those companies (creating a “Club of 100 top eco-innovation companies with high growth potential”) that have the most promising technologies and business plans. A call for ERRIN members to put themselves and their companies forward for this action will be launched soon. This will be a great opportunity for ERRIN members to promote their strategies and actions for green economy and give their eco-innovation entrepreneurs a boost.
Within ERRIN these regions cooperate in our Energy/Climate Change Working Group that meets regularly in Brussels. They met this week to discuss, among others, our planned event on “Smart regions” at the Sustainable Energy Week, which will take place between 22 and 26 of March. This will be in many ways a follow-up to earlier work of the group that has led to the publication of an ERRIN statement in the run up to Copenhagen that emphasized the role of regions in creating research and innovation friendly environments and illustrated this with examples of regional excellence in delivering on low-carbon technologies.
Concerning the messy reality of post-Copenhagen and realising that the guys at the top can’t fix it for the moment, I believe that such a bottom-up push via smart local/regional strategies towards greening industries and new eco-innovation technologies and services is getting ever more important.
Related to this I would like to quote from a recent IHT article on this year’s World Economic Forum in Davos that said that even though the long-term trend is towards clean energy, in the short- and medium term many hurdles exist, one of them being financing: “Even before Copenhagen, many manufacturers of renewable energy equipment … were under pressure to shed jobs and close factories because of the economic crunch…and a lot of clean-technology start-ups were unable to secure venture capital. Meanwhile, relatively low prices for fossil fuels last year diminished the urgency for finding alternatives and endangered the development of relatively expensive clean energy production.”
On the one hand this leads to lock-in effects of continuing investments in old and polluting technologies, one the other it makes clean-tech less competitive. As long as the market incentives are low, many clean-tech companies, therefore, rely heavily on public sector initiatives and funding, concludes the article, quoting a G.E. executive who said that “Post-Copenhagen, there is a need for stronger cooperation between private enterprise and government, and we’ll now deepen efforts at cooperating with regions that control huge procurement budgets and with cities that also really spend money on innovative technologies.”
In the meantime, a veritable race is going on between emerging economies and the West to achieve leadership on low-carbon technologies. While China was not ready to compromise in Copenhagen, its state-run economy with its centralized industrial policy is investing heaps of cash into renewable energies (apart from planning to build three times as many nuclear power plants in the coming decade as the rest of the world combined), while the West is still bogged down from an economic crisis caused by greedy bankers that once again have their bonuses for excessive risk-taking flowing in, like it was business as usual.
China will surpass Spain this year as the No. 3 country in terms of wind power installations, behind Germany and the United States. But mind you this is not about saving the planet, it is about economic leadership and leapfrogging Western competitors to become as dominant in these technologies as in manufacturing, thwarting European dreams of capitalising on its first-mover advantage. Some fear that while much of the research and development as well as engineering on green technology — the engine for innovation — are moving to China to co-locate with the green-technology manufacturing that is already there, Western companies fear they are kept out of lucrative contracts.
The Chinese are, of course, as legitimately interested as anybody in these jobs and industries of tomorrow. Renewable energy is already 100.000 jobs in China a year. On the other hand with their massive economies of scale and low labour costs Chinese companies are able to offer renewable energy equipment increasingly competitively helping to get the cost of renewable energy towards being on par with fossil-fuel energy, and, thus, making ambitious renewable energy goals more likely to be achieved.
But this market is not only about producing stuff like solar panels and wind turbines, it is a hugely diversified market including waste and water management, energy efficiency, sustainable construction, and everything that’s aimed at creating more innovative and efficient processes and services reducing environmental impacts of production and consumption. It’s huge, it’s rapidly growing and in many of these areas European companies are still in the lead providing jobs and growth for the regions they locate and cluster.