Growing a local CleanTech sector

Following a presentation I gave recently I was asked the question “How can a City or region develop businesses and jobs in the emerging low carbon sector?”  I’m not sure my answer at the time was that illuminating so the following is what, on reflection, I should have said in reply to the questioner;

1)      Cities or regions with aspirations to grow a low carbon sector need some existing, often historic, asset or resource on which to build the foundations of their low carbon industry. It is rare for an area to be able to start with a blank sheet of paper – those regions with a high presence of Cleantech companies usually have a historic legacy; geographic or Industrial, which has provided the foundations for an emerging Cleantech sector. So in the case of the Ruhr Valley the presence of the coal industry drew around it various environmental “clean-up” companies providing associated land remediation, water, ventilation and engineering products and services which subsequently provided the foundations for the Ruhr’s thriving cleantech sector (which, according to the Economist, now employs more people than was ever employed in the coal industry). Similarly in Humberside and the North East coastal locations linked to the historic legacy of docks, marine maintenance services, supply ships and support vessels etc  is providing the infrastructure to secure and grow lucrative off shore wind farm and marine energy investments.

2)      Local public policy must be supportive ……the respective Municipal Government or Local Authority must understand the importance of the emerging renewable energy sector and develop plans to support its growth. Sadly many Local Authorities “just don’t get it” and regard the low carbon sector as the domain of “tree hugging environmental fundamentalists” rather than a major business growth sector which, by 2020, will see a £200 billion investment in the transformation of the UK’s energy infrastructure. Local public support can manifest itself in a number of ways including tailored business support, financial investment programmes, help with recruitment and training, property identification, etc etc

3)      CleanTech Companies need access to finance…….many Cleantech companies are trying to bring forward new products and services when there is no established market for such innovations and uncertainties regarding future public sector support generated by inconsistent Government policies. Such Companies need access to a range of small scale grants to help with product development, prototyping, IPR protection, due diligence, trade marking, right through to equity investment. There is strong evidence that areas able to offer a ladder of financial support packages to companies will attract and grow a CleanTech sector. Examples of this include the investment packaged co-ordinated by Co2Sense in Yorkshire, the Scottish Government’s £103 million Renewable Energy Investment Fund (REIF) providing loans, equity investments and guarantees in renewable energy projects and the Nottingham Technology Grant Fund (NTech)which offers grants between £20K -£1m to clean technology businesses

4)      Apart from funding CleanTech start-up companies need advice, contacts and inspiration; “Sme’s need to be guided, trained, helped, networked, financed, mentored and tracked Like most businesses they thrive where there is a supportive environment of likeminded people, with access to potential investors and a supportive public sector. City’s or regions with an active Low carbon Business Networks such as the Renewables Network in Humberside and the GreenTech Business Network in the East Midlands provide an invaluable opportunity for cleantech companies to network, foster collaborations, learn from others and be alerted to business opportunities and the availability of public sector grant and support.

5)      Areas with aspirations to grow a low carbon business sector need access to an affordable ladder of business property. Ideally beginning with easy-in, easy-out co-worker spaces and small office units ideally in a dedicated Centre, for example the Nottingham CleanTech Centre, through to “grow-on space” (circa 2,000 sq.ft.) and ultimately larger scale industrial or business Park Units. The Cleantech Industry probably differs from other sectors  in that companies tend not to want or need City Centre locations – although there is a danger of making sweeping generalisation “green” companies tend to fall broadly in to two categories which both have differing property requirements neither of which is available in the City Centres;

a)      Sustainable construction trades and Renewable energy Installers, PV fitters, insulation companies etc, who require workshop and warehousing space, van parking , access to the Motorway network and therefore tend to be located in secondary locations on the periphery of a City.

b)      “High Tech” medium sized Cleantech companies who value a close proximity to a University and its research facilities or require a “green” building which fit the Company’s low carbon ethos and are thus drawn to Science or Innovation Park locations.

6)      Having on the patch  a University with energy sector research expertise which is outwardly focussed, offer access to its facilities, is keen to support business via Student placements, internships, and encourages its researchers to engage with local companies can be an invaluable resource. Sadly many University are inwardly focussed, have limited contact with their local business community, generate few if any spin out companies and are often only interested in establishing relationships with medium sized companies able to fund research collaborations.

7)      Skills is the obvious one missing from the list.  Given the embryonic, varied and dynamic nature of the CleanTech sector few if any regions can offer a pre-trained workforce. Evidence suggests that Companies operate on the basis that they expect to train their own staff or will import them from elsewhere. Romax, who design and maintain wind turbine gearbox and drive train systems employ 250 people half of which are based in the UK and half in the Company’s overseas offices in the Far East.  However according to Romax founder, Dr Poon, it is difficult to find people with the right skills; “The UK does not train enough skilled people and that’s one of the reasons we have 16 nationalities at this company”. Sadly few Municipalities now appear to now have the resources to work with inward investors to help them recruit and train a bespoke work force.


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One comment on “Growing a local CleanTech sector
  1. Nick Gostick says:

    Hi Neil,
    I think that you summed it up pretty well. But I think that I would add in two further important components and these are connection and recognition. All those things can exist in isolation but I believe that a cluster really starts working when the elements listed start connecting. In his book “Where Good Ideas Come From” Steven Johnson demonstrates that innovation comes from highly connected groups of people. A highly interconnected/networked cluster will be powerful but recognition both internally and externally also adds to its effectiveness. However these two components are where public policy can force the pace but only when the assets you list are present.

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