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The Clean Tech Revolution identifies the forces behind the clean technology phenomenon and provides a wealth of advice to investors and entrepreneurs on how to benefit from “The Next Big Growth and Investment Opportunity”.

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BOOK REVIEW: the clean tech revolution 

 
First published in Issue 3 of Cleantech magazine, September 2007. Copyright Cleantech Investor 2007

The Clean Tech Revolution identifies the forces behind the clean technology phenomenon and provides a wealth of advice to investors and entrepreneurs on how to benefit from “The Next Big Growth and Investment Opportunity”. Throughout, the text is interspersed with sections highlighting a “Clean-Tech Consumer” trend or a “Breakthrough Opportunity” for business. There is a myriad of suggestions of ways in which individuals, companies and governments/municipal authorities can participate and profit from the “Revolution”. A chapter entitled “Create Your Own Silicon Valley” is dedicated to the scope for “hubs or clusters” of clean technology companies, with associated benefits such as job creation and economic growth. Another chapter is dedicated to “Clean Tech Marketing”.

The introductory section provides a useful analysis of the global “Clean Tech” phenomenon. Pernick and Wilder identify six major forces, dubbed the “six Cs”, which are symbolic of a combination of social, economic, financial, political, geographical and geopolitical forces for change. If there is a criticism, it would be that the list appears to have been contrived in order for the book to fit a ‘Beginner’s Guide’ formula. Top of the list is “Costs” (the fact that clean energies are becoming more economically viable as fossil fuel energy prices rise). It continues with “Capital” (this ranges from government grants to VC and stock market funding) and follows up with “Competition” (between regions, to encourage jobs – but also competition for scarce resources such as water and energy – what might be described as the ‘energy security’ issue).

The fourth “C” is “China”, which is described as “emblematic of the resource constraint issues facing our planet”. China, for the authors, is just the largest on a list of countries whose economies are catching up with the developed world and driving demand for clean technology solutions.

The fifth “C” is “Consumers” and again the approach is market-based: the emphasis is on how to meet the needs of that portion of consumers who are demanding ‘clean’ alternatives. Interestingly, ‘Carbon’ failed to make the grade as one of the “Cs”, despite the recent upsurge of interest in carbon trading in the USA. However, “Climate” did make the list as the last “C” and this section includes a discussion of carbon trading. Written from a US perspective, it is perhaps not a surprise that “Climate” comes last on the list. The order would appear to reflect the fact that this is a book about a “…revolution among the inner circles of corporate boardrooms (and) Wall Street trading floors…”. It is most certainly not a manifesto for “…back-to-the-earth utopian dreams”.

Pernick and Wilders’ ”Clean Tech Revolution” is very much capitalist in nature and driven by technology. It follows “…..on the heels of the computer, Internet, and biotech revolutions”. As the authors point out: “The revolution is not coming; it’s here today.” Like the computer or Internet revolutions, ‘Clean Tech’ is “bringing unprecedented opportunities for wealth creation (and) high-growth career development”. It is also bringing “…innovative solutions to a range of global problems”. Rather than dwelling on the problems posed by challenges such as climate change or China, the authors emphasise the investment opportunities arising as a result of the need to find solutions.

Pernick and Wilders explain clearly why clean technology “promises to be the next engine of economic growth”. In a section entitled “How To Profit”, the authors define “The Eight Major Clean Technologies” as: Solar Energy; Wind Power; Biofuels and BioMaterials; Green Buildings; Personal Transportation; Smart Grid; Mobile Technologies; and Water Filtration. A chapter is dedicated to each and outlines the respective opportunity for investors and entrepreneurs. The Solar Energy chapter emphasises strongly the ‘high tech’ aspects of the “Clean Tech Revolution”, with parallels drawn with the semiconductor industry. The authors point out that the solar industry is benefiting from a breed of venture capital financers which recognises its potential to achieve efficiency gains. Each of these eight chapters culminates in a list of “Ten to Watch” companies involved in the respective areas.

It can be a challenge to slice up the various components of clean technology in a meaningful way. There is a clear logic behind the authors’ choice of technology chapter categories. If there is a criticism, however, it might be that the list includes both applications and “technologies” and that the dividing lines can be slightly confusing. “Solar Energy” and “Wind Power” clearly stand alone as technologies, for example, but a “Green Building” might also use both solar and wind power. Commensurately, some technologies have been sidelined by not being allocated a chapter – notably hydrogen/fuel cells and wave/tidal energy.

Early in the book the authors define clean technology by means of a process of exclusion: they argue that nuclear energy and ‘clean’ coal technologies do not qualify. This might be regarded as a somewhat arbitrary decision since there is no suggestion that first generation biofuel technologies from feedstocks such as corn or palm oil should be excluded (although Pernick and Wilder do address the “corn conundrum” in the Biofuels & Biomaterials chapter).

If this book can be considered as a manifesto, it is for a “Clean Tech Revolution” which it is anticipated will have a positive outcome for the “investors and companies that get on board now” – and the sub text would appear to be that the revolution will at least ameliorate the challenges posted by issues such as “Climate Change” or “China”.

For investors considering expanding their portfolios to include clean technology companies, “The Clean Tech Revolution” provides an excellent framework from which to start to approach the sector and a guide to some of the major players, both in the US and elsewhere. For established cleantech investors it should be required reading!

To quote from a very different era and context: “You won’t fool the children of the revolution” (Marc Bolan 1972). Co-author Ron Pernick became the father of twins shortly after his book was published. Time will tell whether the “Clean Tech Revolution” will deliver on all fronts for the Pernick twins and future generations. For now, however, this book is highly recommended as a good and informative read and as a point of reference for anyone involved with or interested in clean technology.

The authors of the clean tech revolution, Ron Pernick and Clint Wilder, are respectively co-founder/principal and contributing editor of Clean Edge, which provides clean technology research and consultancy. As an advisor to corporate, NGO, government and investment sector clients, Clean Edge has been a pioneer in identifying the growth trends in clean technology and publishes in-depth research reports on the topic.