4/29/2010




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4/29/2010




                                                      A Cubic Mile of Oil ‐ CMO
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4/29/2010




                                                      Replacing Today’s World Energy Requirements*          ...
4/29/2010




VC Investment in Cleantech Takes Off                                                                        ...
4/29/2010




Cleantech Patents Indicate Growth                                                                  Corporate...
4/29/2010




                                                                          Cleantech Companies/Projects


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4/29/2010




Other Regions and Countries Are Investing Heavily                                 What to Do? Think Innovati...
4/29/2010




The New Balancing Act for Cleantech Companies                        Thank You, Enjoy the Conference!

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Innovation in Cleantech - Steve Ciesinski - SRI International - April 2010

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Presented at Nordic Green II conference, April 2010

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Innovation in Cleantech - Steve Ciesinski - SRI International - April 2010

  1. 1. 4/29/2010 Overview • Welcome! • Our Perspective on the Energy Issue • The Dramatic Growth of the Cleantech Industry • Mega Trends and Dynamic Markets • Innovating to Thrive Innovation in Cleantech  Thriving in Dynamic Markets Thriving in Dynamic Markets Steve Ciesinski Vice President, Strategic Business Development Nordic Green II, April 27, 2010 © 2010 SRI International ‐ Company Confidential and Proprietary Information     2 SRI’s Impact on Society SRI is Heavily Invested in Cleantech Research Innovation! Multidisciplinary technology and research provides real‐world solutions Information Technology HDTV Health, Education,  and Economic Policy SRI’s Value Creation Engineering and  Systems Process™ Advanced Materials,  Biotechnology Microsystems, and  Nanotechnology 3 4 1
  2. 2. 4/29/2010 A Cubic Mile of Oil ‐ CMO Understandable unit: mental image Our Perspective on the Energy Issue Statue of Liberty 6 Visualizing a Cubic Mile Current Global Energy Consumption Is About 3 CMO  How long can we afford to live off our inheritance? What are the social costs? Renewables Biomass Hydroelectric 0.19 Geothermal <0.01 0.17 Wind + Photovoltaic + Solar Nuclear Thermal <0.03 0.15 Oil 1.06 Natural Gas 0.61 Inherited Coal 1 cubic mile = Manhattan under 150 feet of oil 0.81 7 Source: A Cubic Mile of Oil, Hewitt D. Crane, Edwin M. Kinderman, Ripudaman Malhotra  8 *2006 Data 2
  3. 3. 4/29/2010 Replacing Today’s World Energy Requirements*  Projected Energy Demand by 2050 Any single resource is not enough Need additional energy on the order of several CMO/yr 10.00 Recent energy growth rate: 2.5%/yr 2050 9 CMO 9.00 Annual GDP growth rate: 8.00 8 00 World:   5.5% World: 5 5% • Hydro China:   11% 7.00 India:     9% 6.5 CMO • Nuclear Energy Demand (CMO) 6.00 • Solar CSP • Windmills 5.00 • Solar Roofs 4.00 4 CMO D 3.00 2.00 1.00 0.00 1990 2000 2010 2020 2030 2040 2050 2060 *Current world energy consumption is about 2.6 cmo Source: http://www.spectrum.ieee.org/print/4820 9 9 Year 10 Changes in Global Energy Mix Have Occurred Before Transitions take scores of years, Cleantech companies can lead! 100 esources 90 Wood/Biomass Percent Total Prima Energy from Various Re 80 Coal 70 60 ~1960 50 The Dramatic Growth of the Cleantech Industry 40 ~1940 Affecting the scope and speed of innovation Oil ary ~1880 30 Coal 20 Gas Nuclear 10 Oil Hydro Wood/Biomass 0 1850 1870 1890 1910 1930 1950 1970 1990 2010 Year 11 3
  4. 4. 4/29/2010 VC Investment in Cleantech Takes Off Investments by Industry From negligible to substantial in just 9 years Q4 2009 – All industries Clean‐Energy VC Investments in US‐Based Companies as % of Total Year Total Venture Energy Technology Energy Technology  Investments Investments Percentage of  Percentage of (US$ Billions) (US$ Millions) Venture Total 2001 $40.6 $351 .09% 2002 $22.0 $271 1.2% 2003 $19.7 $424 2.2% 2004 $22.5 $650 2.9% 2005 $23.0 $797 3.5% 2006 $26.5 $1,308 4.9% 2007 $29.4 $2,867 9.8% 2008 $28.3 $3,213 11.4% 2009 $17.7 $2,216 12.5% Source:  Bloomberg New Energy Finance with supporting data from Clean Edge and Nth Power, 2010 Source:  2009 MoneyTree Report 13 14 Renewables Capacity Nearly Tripled in Last Decade Renewable Energy Costs Vary Widely Wind and PV capacity is growing most rapidly But electricity from certain renewables is now cost competitive Source:  2008 Renewable Energy Databook, July 2009, DOE Source:  2008 Renewable Energy Databook, July 2009, DOE 15 16 4
  5. 5. 4/29/2010 Cleantech Patents Indicate Growth Corporate Commitment to Sustainability  Chief Sustainability Officers are the newest hire The Definitive Corporate Sustainability Benchmark – Top 10 2010 Key Performance Indicators K P f I di t • Energy productivity • CO2 productivity • Water productivity • Waste productivity • Leadership diversity • CEO‐to‐average worker pay CEO to average worker pay • % tax paid • Sustainability leadership • Sustainability pay link • Innovation capacity • Transparency 18 17 Is Cleantech a New Bubble? Recently, IPOs have dropped off the radar‐ ominous And M&A Exits Have Dipped from Previous Years VC‐backed company exits 1992‐2008 M&A transactions IPO transactions IPO transactions Too broad to pop? Uncertainty still surrounds the US IPO market! Maybe Cleantech can lead a new wave! Jean Paul Rodrigue, Transportation Geographer, Hofstra University, NY, USA, February, 2008 Source: PWC Money Tree  Q4 2009 Report www.renaissancecapital.com 19 20 5
  6. 6. 4/29/2010 Cleantech Companies/Projects “Venture capital firms have invested almost $20 billion into  hundreds of greentech startups since 2005. All of these  firms are looking to launch a disruptive force into their  target markets, scale rapidly and grow quickly. Innovating to Thrive Very few of these firms will actually make it.” ‐ GreentechMedia, March 2010 22 Nordic Region Pioneering Cleantech Innovation The Creation of the Wind Turbine Industry Supporting cleantech through policies, investments, and purchases  A Nordic example of government supported innovation • Geothermal • Public transportation/hydrogen buses Denmark 1978 – Denmark 1978 2009: • District heating • From 22 kW to 3.6 MW turbines • From 0 to 20% of total electricity supply • Energy efficient buildings • 28.000 jobs created • Strict building code • From 0 to 7.2% of total Danish exports • Wind turbines • Biomass 23 24 6
  7. 7. 4/29/2010 Other Regions and Countries Are Investing Heavily What to Do? Think Innovation! It’s become serious business for many • Korea: “Green New Deal” ‐ $46 billion / 5 years • Japan: invests $63 billion / 5 years • China: invests $440 billion / 10 years Innovation is the creation and delivery of new  • US: plans to invest $172 billion / 5 years customer value in the marketplace with a  sustainable business model for those producing it. Cleantech VC investments as % of 2009 total: Remember: True Innovation is more than R&D: US 21%, China 14%, India 6% It’s Research + Development + Commercialization 25 26 Innovation Creates the Highest Value SRI’s Five Disciplines of Innovation Entrepreneurs should focus on being truly innovative Highest company  1 Important Customer & Market Needs Innovation and societal value 2 High Value Creation High Value Creation Top 10 Business  i Book of the Year! Invention and knowledge  Not customer or market focused 3 Innovation Champion creation from R&D 4 Innovation Teams Low‐cost incremental  No breakthrough or sustainable advantage Low‐cost incremental  No breakthrough or sustainable advantage improvements i 5 Organization Alignment O i ti Ali t Disciplines are multiplicative Market Low‐ Low‐cost  Success imitation Commodities at minimal value 27 27 28 7
  8. 8. 4/29/2010 The New Balancing Act for Cleantech Companies Thank You, Enjoy the Conference! • Focus on True Value Creation (not incremental) • Deeply understand your market, and how it’s changing Headquarters q • Capture your niche SRI International 333 Ravenswood Avenue • Secure growth financing Menlo Park, CA 94025‐3493 +1 650.859.2000 • Constantly analyze your Washington, D.C.  approach or solution‐ SRI International 1100 Wilson Blvd., Suite 2800 Arlington, VA 22209‐3915 avoid getting caught in +1 703.524.2053 a bubble that can burst! b bbl th t b t! Additional U.S. and  international locations www.sri.com 29 29 8
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