Growing the green economy

Beating your head against a brick wall hurts. If you don't believe me, ask the entrepreneurs operating in the cleantech and renewable sectors

Speaking to veteran green campaigner Jeremy Leggett, the CEO of Solarcentury and winner of entrepreneur of the year at the Rosenblatt New Energy Awards you get the sense that he is almost amused by having to keep trotting out the same reasons for the government to get on board and kick-start the green economy… An energy crisis is inevitable… The earth is heading for disaster… Let’s act now… It’s a great business opportunity…

The last point tends to be overlooked. Smart fund managers and venture capitalists are investing in renewables and cleantech because they realise this is where business will boom and money will be made. Leggett, in a speech delivered at the UK government’s job summit earlier this year, noted that millions of jobs could be created if the right sort of investment was made in this field.

Germany leads the way. Between 2001 and 2006, the government there invested €3.9 billion in refitting apartments with energy efficient technologies. This leveraged a further €14.3 billion of private money, creating 140,000 jobs. The bonus for politicians is that the government recouped €3 billion of the original investment in tax paid by the new workers and unemployment benefits avoided.

Tomorrow and tomorrow

A forward-thinking, visionary approach is needed. With the current market turmoil, that means letting industries which have had their day go to pasture. In the US, it’s encouraging to see the policy-makers realise that throwing cash at the dying car industry is not the answer. General Motors and Chrysler, in their current form, are not worthy of being saved by public money.

On this side of the pond, the approach seems to be to try and keep everything the same at all costs, ignoring the fact that nobody ever wins a war against change. In light of this, it is disappointing to see yet another missed opportunity as just 0.6 per cent of the government’s £20 billion economic rescue package has been put aside to assist the low carbon economy. While the green sector received £120 million, our car industry got a whacking £2.3 billion. One stat suggests that 20 per cent of the nation’s GDP has been provided to support the financial sector – so much for free markets.

What with that and many small businesses searching for funding through the Enterprise Finance Guarantee scheme like it’s a latter-day golden fleece (although business secretary Peter Mandelson assures us it works perfectly), and you do start to get a Leggett-style air of wondering whether this is all just a bad, bad joke.

Marc Barber

Marc Barber

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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