The Institutionalization of Clean Tech: An emergent field

Benson Honig

Teresa Cascioli Chair in Entrepreneurial Leadership; McMaster University, Hamilton

Ontario

Institutionalization: Why should we care?

Much research on technology clusters examines successful environments, attempting to draw conclusions

This success bias has inspired a plethora of industry in the production of “silicon XX’s”, including“ glenns”, vadies, alleys, etc…

Due to this success bias, we know less about the implications for emergent clusters, problems, and possible negative consequences of cluster seeding efforts

Questions: “how does the institutionalization of government economic policy emerge, and what are the resulting consequences?” “To what extent is policy driven by pragmatism, opportunism, political rhetoric, research, public opinion, desperation or expediancy?”

Institutionalization

Much work has been done examining the isomorphism of institutions such as education, science, development, fads and fashions

Research regarding the success or failure of public initiatives and economic development is quite mixed, but provides little guidance for emergent technologies

Less work has been done examining the emergence of new clusters in real time, particularly as a specific target of governmental (regional, national, local) targeted development

Comparative research

Powell et al did a study examining high-tech cluster in the life sciences retrospectively

They looked retrospectively at 11 clusters at 3 points in time: 1990; 1996; 2002

They found government policies were important to cluster formation

Best results when region pursued open norms of scientific research. Public research or universities served as cluster anchor

Comparative research

Each of their different clusters had unique path dependent trajectories – but only 3 were successful, and it would have been virtually impossible to predict which would succeed

Interfirm collaboration was essential in the successful clusters (Boston, Bay Area, San Diego) – in San Diego, an official network provided great help- in Silicon Valley, Stanford helped- virtuous ties of local first, other clusters second, and global linkages last.

Local ties were sparse in non-successful regions. Instead, they developed external (to region) linkages, and were dominated by one very strong local organization.

High Growth regions had both local and global ties

Top cleantech countries* *Shawn Lesser founder and president of Sustainable

World Capital 1 Denmark 2 Germany 3Sweden 4 UK 5 Israel 6 Switzerland 7 USA 8 UAE 9 China 10 Canada

Canada’s strategy Canada has jumped fully into the clean-tech pond. “on many fronts, there are high hopes that Ontario's clean technology will become an

important contributor to Ontario’s economy ( OCF, 2009:17). “Global demand for clean technologies such as alternative energy generation

technologies……has grown substantially in the past few yeas….spurred by increasing energy and water costs, targets set by international agreements such as the Kyoto protocol the desire for energy self-sufficiency, and the public’s call for cleaner, more environmentally sustainable means of living, the demand for clean technologies will see rapid and sustained growth for the next several years. This demand is likely to increase as governments around the world now look to stimulate their economies through investments in infrastructure and clean technologies. (Group, 2009)

To create a knowledge advantage, Canada’s federal government will focus strategically on research in areas that are in the national interest from a social and economic perspective. The four area are : Environmental science and technologies; natural resources and energy; health and related life sciences and technologies; information and communication technology (Public works and government services, 2007). Chapter entitled “improving Canadians’ lives and opportunities through science and technology: federal government is encouraging environmental innovation by : creating clear and effective policy frameworks for the environment: 2) creating the ecoenergy technology initiative 3) supporting collaborative research initiatives to improve the recovery of energy and 4) creating the Canada trust for Clean Air and Climate Change to support projects.

in 2008 there were over 2,600 Ontario companies generating 7 billion employing 65,000 people a year, 7 billion in revenue. The majority are engineering firms .(group:23).

Wind Technology: Goal to become a global wind energy leader that meets more than 20% of its electricity needs through wind energy by 2025 (Canada). Goals include the creation of at least 52,000 jobs, 1.5 billion in annual business activity, 132 billion in investment.

In a chapter entitled “making Canada a World Leader”

“it is no longer enough for countries to support S&T only from a national perspective. Canada must be connected to the global supply of ideas, talent and technologies….Canada and the state of California have embarked on a strategic partnership to achieve world-class research strength in areas such as cancer stem cell research, infectious diseases, sustainable energy, and ICT broadband. Strategic international and inter-sectoral collaboration among governments, researchers, industry and investors is pointing the way toward new approaches to positioning Canada as a global R&D innovation leader (Public works and government services, 2007)”

More promises

NDP promises to spend 8 billion over 4 years: 4 billion for auto sector, 3 billion for green collar jobs

Liberals promise 1 billion advanced manufacturing prosperity fund for green tech

Conservatives (Current Harper Government) created 1 billion eco-trust fund (SDTC), also 230 million to induce clean-energy policies

Canada’s perspective

A higher share of electricity is generated in Canada by renewable sources than almost anywhere else. How will this effect EV development?

Calls have been made to invest in energy storage devices, promote development of charging infrastructure, create regulation and standardization, harmonize in North Am,,legislate building codes, and convert used vehicles to electrification

Orientation of this study

Will employ institutional theory to comparatively examine the emergence of specific clean-tech clusters around automobile conversion

The automobile industry is notable both for its role in industrialization (oligopoly) and job creation, as well as the implications of a technological paradigm shift. Rust-belt environments are competing heavily to capture technological renewal. Ontario produces more cars than any US state (2.7 million in 2004). Big 3, Honda, Toyota

How do regional and national programs impact, both positively and negatively, the emergence of new clean-tech models? To what extent are these path dependent?

One possible additional Target

Shai Agassi’s better place: how will the four demonstration regions (Denmark, Israel, Australia; future Canada, USA, France)

How do strategic partners and investor alliances constrast or compare with governmental policies?

A123 Systems;Acorns to Oaks II;AGL;Automotive Energy Supply Corporatio;DONG Energy;Esarbee Investments Canada;GC Investments LLC;Hawaiian Electric Company;HSBC;Israel Cleantech Ventures ;Israel Corp.;Lazard;Macquarie Capital;Maniv Energy Capital;Morgan Stanley ;Musea Ventures ;Ofer Group ;Renault-Nissan Alliance;VantagePoint Venture Partners;Vayikra Partners;Wolfensohn & Co.