Monday, July 9, 2007

Five questions: Ron Pernick and Clint Wilder

For readers who haven't picked up a copy yet, Ron Pernick and Clint Wilder's recent book The Clean Tech Revolution is a very good primer on the sector. Even regular readers of this website might find it a very useful read -- and especially might find it a great gift for that special someone (your boss, your father in law, etc.) who doesn't quite get this whole cleantech "thing" yet...

So we thought it would be good to subject Ron and Clint (who also are a principal and contributing editor at Clean Edge, respectively) to be the next victims, er, participants in the overwhemingly popular ongoing series, "Five Questions". And they were kind enough to share their thoughts...

Q. When did you make the decision to write this book? Was there a particular triggering point in the market when you realized your potential audience had gone mainstream?

A. Back in late 2002, when Clean Edge was helping define the clean-tech industry, we felt that the sector was ripe for a book aimed at a broad business audience. We worked on our first book outline and the idea percolated – then went on the back burner as Clean Edge’s business expanded and took all of our attention -- but it never really went away. In late 2004, we decided to get serious about the effort, hired an agent, wrote a formal book proposal, and finalized a contract with Harper Collins in the summer of 2005.

What was the trigger?

There have been so many ‘tipping points’ in the mainstreaming of clean tech – the growth of clean-tech investing by seasoned VC firms, the sale of Toyota’s millionth hybrid car, California’s landmark greenhouse gas legislation, just to name a few. We’ve seen the momentum just build and build. To be honest, as we saw the clean tech revolution become Page One news and the topic of national magazine cover stories in recent months, we were a little worried that our book release date in June might ‘miss the window.’ Clearly those worries were unfounded, as clean tech, and global mainstream awareness of all things green is only gaining momentum.

As we point out in the book, the move towards clean technology -- in energy, water, transportation, and materials -- will take decades to accomplish -- so it really takes a long-term perspective. Indeed, one of the most common things we hear from friends and colleagues is, “The timing of your book couldn’t be better.” We believe that's because we really are just at the inflection point for clean technology.

Q. While the book is suited for a lot of potential audiences, who’s the prototypical reader you wrote the book for?

There are a number of prototypical readers. Current and potential investors in clean tech, ranging from individuals looking at single stocks or mutual funds, all the way up to pension fund investment managers and venture capitalists. People considering a career in clean tech, whether freshly-minted B-school grads or mid-life career changers. Public-sector officials looking for the next engine of economic growth for their city, state, or nation.

We wrote the book with a lot of different ‘entry points’ – Breakthrough Opportunities, Clean-Tech Consumer Tips, and especially our Ten to Watch lists of leading companies in each technology sector – so that everyone from clean-tech veterans to newbies will find something of value.

Q. Is there a cleantech investment bubble? Why, or why not?

A. Any high-growth investment sector, especially those involving cutting-edge technology, will have a host of losers among the winners. That’s how the capitalist system works. And of course, there will be irrational exuberance in some clean-tech sectors at various times.

But we are often asked ‘the bubble question’, and our simple answer is no; the broader clean tech sector will not be a bubble like the dot-com industry. Why? Because clean tech companies, for the most part, are providing technologies that the world truly needs – those that deliver energy, transportation, potable water, materials. We love John Doerr’s quote that really encapsulates this opportunity – the fact that we’re talking about businesses that are involved in atoms, not just bits.

We’re talking about the largest industries on earth – electricity, automobiles, water – opportunities in the trillions of dollars. And the clean tech revolution will need to serve the needs of both the developed world (to replace aging, crumbling, dirty infrastructure) and in the developing world (where 1 billion people lack access to electricity and 2 billion are without access to clean, potable water).

In the dot-com run-up, many companies put something out in the market and then tried to create the demand for it. No one needs to create a demand for energy use or clean water – or more reliable and efficient use of both – we really are talking about the new industrials when we look at clean tech...

Q. How much is the market growth you project in clean energy tech predicated on new favorable policies coming into effect? How much is this industry threatened by random acts of politics or inconsistent policies?

A. We like to point out that there is no energy industry on the planet that is subsidy or policy independent. Just look at the oil, coal, and nuclear industries. None of them would be where they are without government support. So to answer your question – policy that supports clean-tech growth and development is tantamount to its success.

But as we point out in The Clean Tech Revolution, the shift is already well underway. From Frankfurt to Sacramento to Tokyo to Beijing – government entities of all sizes are now viewing clean tech as a main driver of job creation, economic competitiveness, energy independence, and in battling climate change and meeting carbon challenges. Dozens of cities, states, provinces, and federal governments are lining up behind the transition.

Even in the U.S., where national policy has been lackluster, to say the least, states have stepped in to fill the void. There are now two dozen states with RPS and cities around the nation are vying for the jobs being created in the manufacturing of solar panels, smart grid devices, advanced lithium ion batteries, and wind turbines. In fact, California Governor Schwarzenegger most likely won reelection in 2006 by running on a clean-energy platform that has positioned California as a global leader in clean energy.

We’re generally optimistic that this shift in policy will continue – because we see it as an imperative for governments that wish to remain relevant. Those regions that don’t embrace clean energy and clean tech, and provide supportive policies and a shift away from the polluting, volatile energy industries of old, will lose out to those regions that do.

Q. What technology has the highest potential-to-visibility ratio right now? (In other words, what’s your favorite unknown technology that investors should be more aware of…)

A. You ask an interesting question. There are so many untapped areas – some with relatively high visibility and others that are currently being overlooked by the investment community and the broader market.

Without sounding coy, we’d like to recommend that people pick up a copy of our book. Within The Clean Tech Revolution we showcase “breakthrough opportunities” in each of the eight technology chapters. We highlight some of the areas that we think offer the best near- to mid-term opportunity for investors, entrepreneurs, and corporate executives. Everything from next-generation lithium ion batteries and renewable-energy powered desalination plants to closed-loop biorefineries and smart appliances. The answer to your last question is, quite literally, in the book.

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