By James Noble
February 6, 2014
The late 1990’s and early 2000’s internet boom has much in common with what the clean technology sector is currently experiencing, according to experts at last week’s Partnership for Canada’s Clean Economy conference.
Like the internet boom, money, entrepreneurs and executives rushed into the clean technology sector early, often before business models were proven. Two key assumptions were made: People would be prepared to pay a premium for ‘green’, and there would be ample funding available to budding clean technologies.
Both of these assumptions proved incorrect. As a result, the cleantech sector experienced the well documented boom and bust that emerging industries are prone to. Thanks to proving out assumptions, calibrating business models and developing innovative financing structures, the cleantech industry is growing again. Much like the internet wave, this post-bust cleantech growth is more gradual and hopefully more stable.
Andy Baynes of Nest Labs, a panelist at the conference, has experienced first-hand what this next generation of success could look like. Nest Labs reinvents technologies such as “smart” thermostats and internet-connected appliances. Recently, Nest Labs announced that Google was acquiring it for US $3.2 billion.
The discussion didn’t only center on disruptive technologies, but also the role of cleantech as a problem solver for large corporates. This involves working closely with corporate partners to identify specific “pain-points” that need solving. Currently corporations like Google, Cenovus Energy and Walmart are working closely with clean technology entrepreneurs and directly investing in their ventures.
Working with government at all levels also remains critical to the future growth of the clean technology sector. Support from smart procurement practices or direct financial investment will help foster stakeholder buy-in and speed up the deployment of new technology. Entrepreneurs with technologies that support public goals will find themselves helped along the commercialization timeline.
The cleantech opportunity is huge, with the Canadian market estimated at $10.6 billion and potentially exceeding $26 billion by 2017. This makes it a significant player in a global clean technology market valued at $1 trillion today and forecast at $3 trillion by 2020. With technology costs dropping and big business moving into the market as a direct investor, the outlook for Canadian cleantech has never been better.