Cleantech has a bright future in upcoming years despite of the some reports and comments like Startups Genome report. Changes in environment across the globe, stringent legislative regulations, high costs of wastes management and R&D funding support new green solutions. #Cleantech #Genome #startups #wastes
Startup Genome report underestimates cleantech startups potential
Presented this year Startups Genome report analyze the startups ecosystem globally (1). From professional networking perspective it provides useful insight into regional innovation hubs, their specificity and trends. However, what could surprise is a judgment on cleantech potential comparing to the rest of innovative and hot subjects. According to this analysis “cleantech” solutions are being described as “mature” sub-sector with one of the smallest growth dynamics for startups in this area. Therefore, someone could have a real doubts about this considering dramatically changing landscape for wastes management and chemical, energy and power, automotive and construction industry either in Europe or globally.
Legislation is a driving force for wastes management solutions
In addition, in last few years we have witnessed few significant legislative and social impacts that would shape the cleantech landscape. One of the most significant came with EllenMacarthur Foundation report (2) on plastics lifecycle. The other documents were the European Plastics directives on European Strategy for Plastics in a Circular Economy (3) and on Single-Use Plastics (4) enforcing challenging requirements for plastics producers and users as well regarding future wastes management. In fact, seriosity of EU law enforcement is tangible and known to business (see EU helps fight global monopolies).
China bans import of simple wastes
In addition, sudden ban from China on cheap waste import (5) increased even more difficulties with plastics recycling and utilization. Waste managing companies were not any longer capable of sending the dirty problem away overseas, what cause choking of the European and American landfills (6). As a result, becoming more and more popular videos showing huge oceans areas polluted with plastics and clogging Asian harbors with the floating material. These vidoes have stimulated significantly people’s awareness of plastic problem (7). Popularized in social media movies gave an incentive to set on track interesting startups. In addition, the rapidly growing emission certificates prices (from 5 EUR in 2018 to 26 EUR now) have worsen even more cost structures of chemical, steel, construction or power producers(8).
Cleantech becomes more economically attractive
We must differentiate the drivers that stimulate development of various innovations. Most of them results from the “unmet opportunities” and usually, entrepreneurs find ways to address them in an advantageous way. As a result, business perceives innovations as occasion to utilize current market potential, but burden with entrepeneurship risks (for startups usually high). However, in the cleantech area the business risk of adoption of mature (TR level >=7) is relatively low. The need for new solution is often being pumped by the increasing demand from big industries. Due to the stringent law regulations regarding wastes and emissions management are the driving force of their development. Therefore, the industrial players seek a method to decrease their costs and keep the margins on desired levels.
R&D public funding would stimulate cleantech startups
Above all, research on cleantech is not only in interest of pollution makers, but governments as well. Justified by the needs of national economies I would expect that R&D public funding sources would be even more concentrated on supporting of such developments in upcoming years. Frankly speaking, many of them are still not technologically and economically attractive. In conclusion, that is why we should not consider cleantech as mature research area, but still requiring significant developments.
(1) https://startupgenome.com/reports/global-startup-ecosystem-report-2019
(2) The New Plastics Economy — Rethinking the future of plastics, (2016, http://www.ellenmacarthurfoundation.org/publications)
(4) http://europa.eu/rapid/press-release_IP-18-3927_en.htm
(7) https://www.nationalgeographic.com/magazine/2018/06/plastic-planet-waste-pollution-trash-crisis/
(8) https://markets.businessinsider.com/commodities/co2-emissionsrechte