Over the last few years, clean technologies have become a part of our daily lives. They are everywhere: in the cleaner vehicles available at the dealership, in the energy efficient light bulbs in our houses, in the power produced from alternative sources of energy we use every day. It’s becoming obvious to all of us that they can have a direct impact both on our environment and in our personal lives. However, what might not be so obvious is the tremendous economic opportunities that cleantech can create, at a time when Canada and the rest of the world are seeking measures to create new jobs and economic activity.
In the current global context, an increasing number of countries are entering the cleantech race, convinced that investments into low-carbon technologies and green infrastructure can help create jobs in the short-term and play a key role in the shift to a new clean economy. For example, the U. S., under the new Obama Administration, will spend $150 billion over the next decade on clean energy, creating an estimated five million jobs.
As major markets like the United States and China seek to shed costs and increase value in their product offerings, resource-based economies like Canada’s must move up the value chain in order to position themselves at the front of the pack.
There’s no shortage of innovative and promising clean technologies in Canada. In fact, SDTC’s SD Tech Fund™ has a portfolio of 154 projects that, once they reach the market, have the potential to bring positive environmental impacts for Canadians and others. In total, SDTC has committed $376 million to these projects from across the country. That amount has been leveraged with an additional $905 million in funding from other project partners for a total project value of $1.3 billion. While this financial support is essential in helping them move towards commercialization, it is often not enough.
In the instant-gratification world of today, the payback from supporting and adopting innovative clean technologies can sometimes get lost. The development and demonstration of clean technologies often requires high capital expenditures for plant construction, product scale up, and manufacturing capability. However, while sometimes difficult to finance, successful technologies lead to broader and more integrated supply chains, spin-off economic opportunities, and a multiplier effect in job creation. This entire chain of innovation is fed by knowledge workers with diverse skill sets, creating ideas that lead to product development. These technologies are manufactured, distributed and then enter markets, creating jobs and wealth for a greater number of individuals in the supply chain.
As the global cleantech race continues there will be a strong global demand for market-ready clean technologies. In the absence of such technologies, Canada could find itself unable to fulfill its traditional role as an exporting nation, and become a net importer of clean technologies in order to keep up with global advances.
While there isn’t a silver bullet solution to ensuring that Canada can take full advantage of the cleantech opportunity to strengthen its economy, achieving this goal will require efforts from a multitude of sectors. First, all levels of government must use their leadership to develop and implement harmonized regulations and incentives to encourage the widespread adoption of clean technologies in domestic markets.
Second, industry executives need to be leaders in the adoption of clean technologies that will ultimately reduce both costs and their impact on the environmental. Other private-sector players, such as the investment community, must develop a greater appetite for the risk attached to funding clean technologies, further appreciating the greater rewards they could potentially reap.
Both early-stage and expansion capital funds are needed as young companies struggle to obtain financing in this tough market. Canada stands to lose an entire generation of cleantech companies if we don’t ensure successful commercialization of their products and tap into burgeoning domestic and international markets.
Canada has the choice to seize these opportunities and be a technology maker or it can lag behind and become a technology taker. The time to act is now; together, we can transition successfully into a new 21st-century economy in which green infrastructure plays a critical part and supports the objectives of prosperity and environmental sustainability.
Vicky Sharpe, Ph. D., is President & CEO, Sustainable Development Technology Canada (STDC) in Ottawa, Ontario. Contact Vicky at email@example.com
“Canada can be a technology maker or it can lag behind and become a technology taker.”