Opportunities, risks for Midwest in cleantech In a brief commentary I cannot argue the environmental or energy security issues of the green movement. Whichever position you hold, there is consensus that a substantial change in how we use energy is already in process and will affect our lives and our businesses over the coming years. So how do we encapsulate in such a snapshot like this the unbelievable opportunities and the precarious risks of what has become known as cleantech? And equally importantly “Will the Midwest participate and lead this next economic development?” Cleantech covers energy efficiency, carbon trading, power storage, geothermal, solar, wind, biofuel, waste energy and many others. While you may see some technologies more prevalent in this area and the media, they all are driving economic growth and change in our region. Will the Midwest participate in the development of these solutions? We should feel an obligation as we, the Midwest, are the largest polluting “country” in the world behind China, India, Japan and Russia. We are also positioned well to capture a share of this market. For example, our agricultural and automotive areas of expertise allow the region to be the logical research and development area for new products and development in these areas. This base, the scientific talent at our local research and academic facilities, policy initiatives and our corporate growth leaders are critical drivers that must come together for our area to take a leadership role. And the Midwest cleantech cluster is coming together. The Chicago network of the Association for Corporate Growth (ACG Chicago) and others are working to unite these groups in conferences and networks. In addition, last Aug. 28 Gov. Rod Blagojevich signed the Illinois renewable portfolio standards (RPS) and energy efficiency portfolio standards (EEPS), allowing Illinois to stand with more than half the country. The goals are ambitious. Return to the 1990 CO2 levels by 2020 to reduce that by 60 percent by the year 2050. In addition, other policy drivers are the Midwest Governors call for mandatory carbon cap and trade, the passage by Congress on June 11 of the Passenger Rail & Improvement Act, and the hope that the Production Tax credits that have helped drive wind installations will be renewed with a new administration. It is not all just talk and theory. In 2003 the worldwide investment was $33.4 billion and last year it was $148.4 billion, according to New Energy Finance. Are you thinking that was just a bubble that also hit a plateau from the credit crunch? Not so. In the first quarter of the year investment was up more than 40 percent and still strong in the second quarter. Venture capital investments were only about 5 percent of this total (interestingly over half of that was in the U.S., hopefully pointing to future technology leadership in these areas). The rest is project finance, corporate lending and equity investments. And much of this is for large-scale, capital-intensive projects versus the Internet boom of the ’90s where an idea and a computer were enough to start some companies that are still successful today. This is the stuff of Midwestern corporate growth, from specialty financing to construction and services to legal and other advisory services. Our ACG members have traveled the world providing legal, financial and general advisory services in this area and can now bring those to use right here. We have been structuring wind farms for local and foreign investors who have driven Illinois from 107 Mw (megawatts) of wind power at the end of 2006 to 699 Mw a year later and now about 750Mw. We were third in the nation last year for new wind installations and are still going strong in 2008. Other leading professionals in our area have been structuring commercial geothermal power plants and funding biofuels. And to keep the momentum going, we have gathered leading experts on topics as specific as lithium batteries for cars and ultracapacitors to accentuate the performance to venture forums on a broad range of new ideas in solar, biofuels, energy efficiency and other technologies. I challenge all business leaders to participate as much as possible. Your leadership can be from initial greater awareness gained by simply attending our or other organizations’ presentations to enacting cleantech improvements to developing new companies in this sector. All of these will help us meet the projected Midwestern job growth of 120,700 new jobs by 2010 (209,300 by 2020) on $10.8 billion in new economic annual output ($19.4 billion annually by 2020). These should be incentive enough to avoid the most precarious risk we face which is the business community waiting for others to figure out “the best solution.” Join us through ACG Chicago and the other organizations working in this area to capture these jobs and this core foundation of future corporate growth. Craig Miller is Chief Executive Officer of the Association for Corporate Growth Chicago. Contact him at CMiller@ACGChicago.com

Posted on Monday, August 18, 2008 (Archive on Monday, August 25, 2008) Posted by jstoltz  Contributed by jstoltz

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