Cleantech Sector Research Articles

Decarbonization, hegemonic projects, and the green growth policy-planning network: the case of Québec

ABSTRACT Since 2010, grassroots-led socio-ecological movements in Québec, Canada played a key role in overturning carbon extractivist proposals. Building on their successes, these groups now aim to move energy transition debates toward a broader conception of transition that includes radical social justice and post-capitalist alternatives. Meanwhile, corporate actors and the state enlisted major environmental NGOs and union federations into various technocentric ‘green growth’ projects. These hegemonic and counter-hegemonic struggles define how transition unfolds in the province, yet few have studied how actual social actors organize to carry out these divergent responses to the climate crisis. We develop a structural analysis of the green growth policy-planning network in Québec. Starting from five organizations at the core of transition debates, we analyze the network of board interlocks they are embedded in. We describe the overall structure of the network and its main corporate, civil society, and individual actors. Analysis outlines the possibility of a new hegemonic bloc forming, positioned around the green growth project and the cleantech sector, close to achieving dominance in Quebec, that would threaten deeper decarbonization efforts. Thus, despite the recent ban on petroleum extraction, like elsewhere, energy transition in Quebec still faces deep social and ecological contradictions.

Financing Early Stage Cleantech Firms

In this article, we analyze the financing of firms in the Cleantech sector that has successfully raised equity crowdfunding on platforms in 16 European countries. We find that firms with lower total assets and higher cash balances raise greater amounts of crowdfunding. In the period precrowdfunding, illiquid firms raise less finance and firms with greater assets raise more debt. In the postcrowdfunding period, crowdfunded firms raise significantly greater amounts of external equity, suggesting signaling effects. Our study highlights the ameliorating liquidity effects of crowdfunding, which are especially important in early stage firms developing new technologies.

How Do Sustainability Stakeholders Seize Climate Risk Premia in the Private Cleantech Sector?

This paper explores the strategies and practices of capturing climate risk premia for venture capital (VC) fund managers and entrepreneurs in the private cleantech sector. It also examines the impact of the feed-in tariffs (FITs) policy on the management of cleantech investments. It is shown that a longer investment period, less investment capital in cleantech investment management strategies, and optimistic climate risk management practices will help investors to better capture climate risk premia. In fact, the FITs policy will give rise to VC fund managers and entrepreneurs having a positive view regarding the prospects of the cleantech sector, motivating them to make long-term investments. Furthermore, it is shown that the greater the impact of the FITs policy, the greater the climate risk premia to be captured. In addition, the captured climate risk premia are greater in weaker economic conditions and in times of increased uncertainty with regard to product demand.

Windows of opportunity for catching up in formative clean-tech sectors and the rise of China in concentrated solar power

We analyse the potential for industry entry and catching up by latecomer countries or firms in formative sectors, by deriving a framework that builds on the concept of windows of opportunity for catching up. This framework highlights differences in technological, market, and institutional characteristics between formative and mature sectors, and elaborates how this may affect opportunities for catching up. We apply this framework to the global Concentrated Solar Power sector, in which China has rapidly narrowed the gap to the global forefront in terms of technological capabilities and market competitiveness. We find that the formative nature of the sector resulted in turbulent development of the technological, market, and institutional dimensions, making it more difficult for early leaders to retain leadership, and therefore easier for latecomer firms or countries to catch up. This signals an increased role in early-stage technology development in the next phase of the energy transition.

China’s role in the next phase of the energy transition: Contributions to global niche formation in the Concentrated Solar Power sector

The role that emerging economies, and China in particular, play in the global energy transition appears to be transforming. Transition literature to date characterizes the formation of cleantech sectors in emerging economies as being heavily dependent on foreign inputs of knowledge and other key resources. This article argues that in the, currently unfolding, next phase of the global energy transition, Chinese actors may play a more central role in global niche development for high-tech industries, including in constructing innovative and effective socio-technical configurations. This argument is illustrated with a case study of the Chinese Concentrated Solar Power industry, which is found to have developed largely independently of foreign resources. The case is used to highlight a number of specificities of the Chinese environment that set it apart from niche formation environments in OECD countries, and may allow China to open up technological trajectories unlikely to develop in those OECD countries.

Whatever Happened to Green Collar Jobs? Populism and Clean Energy Transition

In today’s populist moment, climate change response has become anything but “postpolitical.” The project to decarbonize energy supplies is generating ongoing political clashes today, including between competing forms of capital/ism. In the United States, rising renewable energy industries in places like California contend with fossil fuel blocs and their regional bases. Such confrontations are sparking populist organizing on the right and left. I argue that critical geography must further consider left populist movements’ role in these politics of clean energy transition, grievance, and reparation and openings for collectively advancing more liberatory futures. I survey a wave of coalition-building that has evolved in the United States since the beginnings of the New Economy, allying U.S. environmentalists, organized labor, and, more recently, racial and community justice organizers. This movement became most visible as it built networks around calls for national “green collar” job creation during the late 2000s financial crisis and 2008 presidential campaign. Its organizing shaped noteworthy, if ultimately limited Obama administration programs and continues to influence clean energy rollout in regions such as California, particularly campaigns for job quality and racial diversity in green construction. I consider here both these successes and their limits in a turbulent clean-tech sector: the need for farther reaching transformations in energy–industrial policy and democratic participation in shaping them. Key Words: clean energy transition, climate change, green collar jobs, green economy, populism.

Unobtrusive Maintenance: Temporal Complexity, Latent Category Control and the Stalled Emergence of the Cleantech Sector

AbstractDisruptive innovation changes the basis of competition within an industry and poses substantial threats for market incumbents. While researchers have focused on whether incumbents can successfully adapt, we know little about how potentially disruptive innovation may be avoided. Studying clean technology in Canada, we examine incumbent resistance when potentially disruptive technologies are seen as socially beneficial. We identify actions taken by incumbents and other socio‐technical regime actors to respond to the issue while simultaneously enacting legitimate stabilizing mechanisms within the regime’s institutional infrastructure. Specifically, temporal and resource‐based actions led to temporal complexity for disruptive cleantech entrepreneurs, and evaluation structuring work led to latent control of the cleantech category, privileging incumbents and resulting in unobtrusive maintenance. Our findings contribute to the disruptive innovation and institutional theory literatures by showing how disruption may be stalled by the enactment of legitimate elements of the institutional infrastructure rather than direct institutional defence.

Application of satellite-based sulfur dioxide observations to support the cleantech sector: Detecting emission reduction from copper smelters

Abstract In this study, we present the result of the application of space-based sulfur dioxide (SO2) observations to evaluate the efficacy of cleantech solutions in reducing air polluting emissions from metal smelting. We analyze the Ozone Monitoring Instrument (OMI) satellite-based SO2 observations over Tsumeb (Namibia) and Bor (Serbia) copper smelters, where two sulfur-capture plants, designed to transform gaseous SO2 emissions into sulfuric acid, were implemented in 2015. We observe a reduction in the annual SO2 emissions by up to 90% after 2015 at both smelters, as a result of the implementation of the sulfuric acid plants. The OMI-based emission estimates are mostly in line with those reported at facility-level and reproduce the same year-to-year variability. This variability is driven by the changes in the copper production, the sulfur-to-copper ratio and by the technology employed to reduce the SO2 emissions. OMI observations are directly used by the company operating the sulfuric acid plants to confirm the efficacy of the employed technology using independent satellite-based observations. The results demonstrate how satellite-based observations are able to detect relative changes in SO2 emissions and can be used to verify and complete existing emission informations. The approach presented here can be applied to other sources on global scale to support cleantech companies as well as decision-makers involved in environmental policies and sustainable development.

Supporting regional cleantech sectors in North America

The development of a vibrant clean technology (or ‘cleantech’) sector has numerous advantages for a regional economy, among them economic development and job creation. But how do governments go about developing this sector? General demand policies and environmental regulations are clearly important, but this review of regional cleantech policies focuses on the less well-recognized area of governmental assistance for cleantech-business development. The research identifies four main policy instruments: clean-energy and high-technology funds; commercialization and incubation support; research, development, and testing facilities; and assistance to business networking organizations such as business associations. Two cases of cleantech-sector development, one in California and one in New York State, are discussed in more detail. They show how state- and local-demand policies provide important background assistance but also highlight the importance of developing independent intermediary organizations that represent and network the cleantech-business community. Moreover, this focus on the business-networking side of clean-energy policies can also help to broaden political support, especially in conservative regions where environmental frames are controversial.

An intermediary approach to technological innovation systems (TIS)—The case of the cleantech sector in Finland

The Technological Innovation System (TIS) framework has become a popular tool for the analysis of innovation dynamics, particularly on a national scale. There have been calls to utilise the framework at sub-national levels too, and to pay attention to location-specific features and interactions. This article contributes to the discussion by studying how the sub-national intermediary network of the Finnish Carbon-Neutral Municipalities (HINKU) complements and challenges the national cleantech innovation system in Finland. To achieve this, we propose an analytical framework that combines the TIS framework with intermediary functions. Our study shows that the TIS framework is a practical tool for analysing potential discontinuities and policy development possibilities regarding innovation systems across spatial scales. Empirically, the study reveals the ways in which certain technological innovation system functions, such as market formation and experimentation, are particularly important for local-scale cleantech deployment and should be analysed further.

Venture Capital and Cleantech: The wrong model for energy innovation

Venture capital (VC) firms spent over $25billion funding clean energy technology (cleantech) start-ups from 2006 to 2011. Less than half of that capital was returned; as a result, funding has dried up in the cleantech sector. But as the International Energy Agency warns, without new energy technologies, the world cannot cost-effectively confront climate change. In this article, we present the most comprehensive account to date of the cleantech VC boom and bust. Our results aggregate hundreds of investments to calculate the risk and return profile of cleantech, and we compare the outcomes with those of medical and software technology investments. Cleantech posed high risks and yielded low returns to VCs. We conclude that among cleantech investments, “deep technology” investments—in companies developing new hardware, materials, chemistries, or manufacturing processes—consumed the most capital and yielded the lowest returns. We propose that broader support from policymakers, corporations, and investors is needed to underpin new innovation pathways for cleantech.

Spatial lifecycles of cleantech industries – The global development history of solar photovoltaics

New industries develop in increasingly globalized networks, whose dynamics are not well understood by academia and policy making. Solar photovoltaics (PV) are a case in point for an industry that experienced several shifts in its spatial organization over a short period of time. A lively debate has recently emerged on whether the spatial dynamics in new cleantech sectors are in line with existing industry lifecycle models or whether globalization created new lifecycle patterns that are not fully explained in the literature. This paper addresses this question based on an extensive analysis of quantitative data in the solar PV sector. Comprehensive global databases containing 86,000 patents as well as manufacturing and sales records are used to analyze geographic shifts in the PV sector’s innovation, manufacturing and market deployment activities between 1990 and 2012. The analysis reveals spatial lifecycle patterns with lower-than-expected first mover advantages in manufacturing and market activities and an earlier entry of firms from emerging economies in manufacturing and knowledge creation. We discuss implications of these findings for the competitive positions of companies in developed and emerging economies, derive new stylized hypotheses for industry lifecycle theories, and sketch policy approaches that are reflexive of global interdependencies in emerging cleantech industries.

Defining a new sector in the green economy: Tracking the techno-cultural emergence of the cleantech sector, 1990–2010

• The emergence of the cleantech sector in 2000–2010 is investigated. • Sectoral emergence is tracked using online search data. • The performance of sectoral identity and cleantech’s economic growth are linked.

Venture Capital and Cleantech: The Wrong Model for Energy Innovation

Venture capital (VC) firms spent over $25 billion funding clean energy technology (cleantech) start-ups from 2006 to 2011. Less than half of that capital was returned; as a result, funding has dried up in the cleantech sector. But as the International Energy Agency warns, without new energy technologies, the world cannot cost-effectively confront climate change. In this article, we present the most comprehensive account to date of the cleantech VC boom and bust, aggregating hundreds of investments to calculate the risk and return profile of cleantech, compared with those of medical and software technology investments. Cleantech posed high risks and yielded low returns to VCs. We conclude that “deep technology” investments — in companies developing new hardware, materials, chemistries, or processes that never achieved manufacturing scale — drove the poor performance of the cleantech sector. We propose that broader support from policymakers, corporations, and investors is needed to underpin new innovation pathways for cleantech. Public policy can directly support emerging technologies by providing easier access to testing and demonstration facilities and expanding access to non-dilutive research, development, demonstration, and deployment (RDD&D) funding. The public sector can also encourage new investors and corporations to invest in cleantech innovation. Corporate strategic investment in emerging technologies coupled with deep sector-specific expertise can accelerate scale-up and provide access to markets. And non-VC investors willing to supply substantial capital for a decade or more are more likely to reap satisfying returns in the long run, if they work with those partners to help develop and de-risk technology.

Do eco-districts support the regional growth of cleantech firms? Notes from Stockholm

In cities around the world, achieving greater environmental sustainability is increasingly accompanied by economic motivations. This is illustrated in Stockholm, Sweden, Europe’s first Green Capital (2010), where an important aspect of the city’s contemporary environmental success has been the development and promotion of flagship eco-district projects. Packaging the environmental sustainability and marketability of these development projects has been part of a concerted strategy in Stockholm, one shared by numerous cities around the world. But to what extent can eco-districts contribute to economic growth? Despite implicit policy motivation, a concise approach to connecting and measuring these issues has yet to be established. Based on an examination of two eco-district developments, this paper combines a qualitative commentary consisting of company-specific interviews with and analysis of productivity of regional cleantech firms in an effort to verify the connection between Stockholm’s eco-districts and the growth of its cleantech sector. Through this mixed methods approach, promising opportunities to assess the economic impact that eco-districts can have on local eco-innovation sectors have emerged. This type of information can be used to support wider public initiatives in eco-district projects.

Engaging with changing spatial realities in TIS research

Highlights: The aim of this commentary is to discuss how to engage analytically with the changing spatial realities of clean-tech sectors and TIS. The commentary argues for a situated rather than a descriptive notion of context in TIS studies. The commentary suggests how concepts and mechanisms from economic geography can be incorporated into TIS research.

Review of Venture Capital Investing in Clean-Tech Industry from the Perspective of Policy Preferences

Clean-tech industry, also identified as the advanced stage of eco-friendly industry and typical high-tech, has to gain enough financial support to develop. Meanwhile, it has provided substantial market opportunities as well as investment options for venture capitalist. In an attempt to form a comprehensive understanding of VC policy preferences in clean-tech sector, relevant studies have been done by researchers from organizations, universities, and firms, from various perspectives, forming an independent “niche” research field. Based on the interactive relation between industry development and clean-tech investing, this paper performs a time-sharing, multidimensional, and dynamic review on international clean-tech policies literatures, focusing primarily on investor preferences. We aim to provide references to the lenses and methods currently used for future research including policy tool design, investment attraction effects, and policy efficiency. Moreover, the findings facilitate the innovation and expansion of related research for China, by which it can form effective financial support for domestic clean-tech industry.

Entrepreneurial Team Formation Dynamics: Mind the Sector

The purpose of this paper is to extend existing research on entrepreneurial team formation under a competence-based perspective by empirically testing the influence of the sectoral context on that dynamics. We use inductive, theory-building design to understand how different sectoral characteristics moderate the influence of entrepreneurial opportunity recognition on subsequent entrepreneurial team formation. A sample of 195 founders who teamed up in the nascent phase of Interned-based and Cleantech sectors is analysed. The results suggest a twofold moderating effect of the sectoral context. First, a technologically more challenging sector (i.e. Cleantech) demands technically more skilled entrepreneurs, but at the same time, it requires still fairly commercially experienced and economically competent individuals. Furthermore, the business context also appears to exert an important influence on team formation dynamics: data reveals that individuals are more prone to team up with co-founders possessing complementary know-how when they are starting a new business venture in Cleantech rather than in the Internet-based sector. Overall, these results stress how the business context cannot be ignored when analysing entrepreneurial team formation dynamics by offering interesting insights on the matter to prospective entrepreneurs and interested policymakers.

‘it's all a question of business’: investment identities, networks and decision‐making in the cleantech economy

Cleantech has emerged in the last decade as a major new investment sector at the forefront of the green economy. It responds to the need for innovative technologies to combat the impact of global environmental, climate and resource trends. Focusing on the cleantech sector, this article explores the central importance of relationality within the financial domain of the green economy. The central aim of this article is to deepen understandings of the operation of cleantech investment by examining the decision‐making processes of cleantech actors, how these are influenced by (and influence) cleantech investment networks, and the relationships between these factors and the macro‐level drivers and discourses focused on the cleantech sector. A relational economic geography approach is used in conjunction with other frameworks (spanning the cultural, structural and actor‐network dimensions of cleantech investment) to investigate: how cleantech investors define the sector; the macro‐ and micro‐level drivers of cleantech investment; and how cleantech networks form and operate to create and disseminate cleantech discourses and to generate the mutual trust and information sharing needed to secure cleantech investments. In so doing, the article seeks to shed greater light on the micro‐level processes contributing to the creation and growth of cleantech investment markets as an essential catalyst and component of the green economy.

Market Entry and Adoption Dynamics in the Emerging Cleantech Sector

Much of the growth in the emerging cleantech sector has been fueled by entrepreneurial entry and technology adoption in the marketplace; in turn driven by a complex combination of political, economic, technological and socio-cultural factors. For example, a growing number of state and federal legislations have been implemented to encourage and facilitate the adoption of clean technologies by both businesses and consumers. In a similar vein, significant amounts of both public and private funding have been invested in startup firms seeking to develop and commercialize cleantech solutions. And concurrently, a number of private actors such as environmental groups and social movement organizations have gained increasing voice in the face of growing public environmental concerns, delegitimizing existing industrial practices while simultaneously creating opportunities for entrepreneurs. Hence in its current state, the Cleantech sector serves as an exemplar of a nascent but emerging sector, whose entry and growth dynamics are driven by a complex combination of actors. The four empirical papers in this symposium, all examine topics pertaining to entry dynamics in this sector from different theoretical perspectives. Venture Capital Firms’ Investment Trajectories in the Emerging Cleantech Sector. Presenter: Anu Wadhwa; Ecole Polytechnique Fédérale de Lausanne Presenter: Xin Yao; U. of Colorado, Boulder Presenter: Antoaneta Petkova; San Francisco State U. The Effects of Organizational Identity on Firm Entry into Movement- Driven Markets Presenter: Shon R Hiatt; Harvard U. Presenter: W. Chad Carlos; Brigham Young U. The Geography of Entrepreneurship in the Emerging Cleantech Sector. Presenter: Siddharth Vedula; U. of Colorado, Boulder Presenter: Jeffrey G. York; U. of Colorado, Boulder Social Movement Intervention in Cleantech Industry Development Presenter: Desiree F. Pacheco; Portland State U. Presenter: Theodore Andrew Khoury; Portland State U.