As a new concept called "clean tech"–alternative energy, more efficient power distribution, and new ways to store electricity, all with minimal impact to the environment–gains footing in the business world, schools and colleges are joining the wave by creating programs that give students real-world training and job possibilities.
Despite last fall’s financial meltdown, public and private investments in clean tech are pouring in, fueling startups and reinvigorating established companies. If it takes off, clean tech could seep into every part of the economy and our lives.
Some of the biggest booms first blossomed during recessions. The telephone and phonograph were developed during the depression of the 1870s. The integrated circuit, a milestone in electronics, was invented in the recessionary year of 1958. Personal computers went mainstream, spawning a huge industry, in the slumping early 1980s.
Innovation is focusing on better batteries, more efficient solar cells, smarter appliances, and electric cars–not to mention all the infrastructure needed to support the new ways energy will be generated and the new ways people will be using it.
Yet for all the benefits that might be spawned by clean tech breakthroughs, no one knows how many jobs might be created–or how many old jobs might be cannibalized. It also remains to be seen whether Americans will clamor for any of its products.
Still, big bets are being placed. The Obama administration is pledging to invest $150 billion over the next decade on energy technology and says this investment could create 5 million jobs. The current recession has wiped out 7.2 million jobs.
And clean tech is on track to be the dominant force in venture capital investment over the next few years, supplanting biotechnology and software. Venture capitalists have poured $8.7 billion into energy-related startups in the U.S. since 2006.
That pales in comparison with the dot-com boom, when venture cash sometimes topped $10 billion in a single quarter. But the momentum surrounding clean energy is reminiscent of the internet’s early days. Among the similarities: Although big projects are still dominated by large companies, the scale of the challenges requires innovation by smaller firms that hope to be tomorrow’s giants.
"Ultimately IBM and AT&T didn’t build the internet. It was built by Silicon Valley startups," says Bob Metcalfe, an internet pioneer who now invests in energy projects with Polaris Venture Partners. "And energy is going to be solved by entrepreneurial activity."
Schools are wasting no time preparing students and staff for what could be the next big innovation.
The California Department of Education and Pacific Gas and Electric Co. are laying the groundwork for a new "green energy" academy pilot program.
The New Energy Academy, launched Oct. 1, is a three-year program designed to provide energy career education for students who otherwise might not have the opportunity.
"Career partnership academies get students excited about learning," said State Superintendent of Public Instruction Jack O’Connell. "Green energy is a growing field that is critical to turn the tide on climate change."
The New Energy Academy program started this academic year, with curriculum planning and teacher development. Through the program, educators selected to teach the career-focused courses will spend nearly a year evaluating, contributing, and studying course content. The selected schools will receive grants and access to professional development workshops and industry experts.
The selected schools are Berkeley High School, Edison High School in Fresno, Foothill High School in Sacramento, Independence High School in Bakersfield, and Venture Academy in Stockton.
The Haas School of Business at the University of California, Berkeley, on Oct. 30 will launch a new energy institute in response to the role that business will play in responding to growing energy and climate-change challenges.
The new Energy Institute at Haas will address the rising need for research and the growing student interest in the markets, policy, and technology for sustainable energy.
Haas School Dean Rich Lyons said that while sustainable energy is an area of tremendous growth and opportunity, it also needs new technologies and business models.
And many Haas students are interested in clean tech and clean energy solutions, said Catherine Wolfram, a Barbara and Gerson Bakar Faculty Fellow who will serve as one of the faculty directors.
"The more we can put them in touch with the scientific research being done on energy on the Berkeley campus and at Lawrence Berkeley National Laboratory, the greater opportunity we have to bring real solutions to the marketplace," Wolfram said.
The institute will include several energy-related courses, such as energy and environmental markets.
The Energy Institute also connects students with Cleantech to Market (C2M), a partnership between graduate students and scientists to bring clean energy technologies to market that initially was created by Berkeley MBA students but has expanded into a major program and a graduate course within the institute.
Companies such as GreatPoint Energy in Cambridge, Mass., which has developed a technique for turning coal into natural gas more cheaply and efficiently than previous methods, are all too aware of the potential that clean tech holds.
GreatPoint plans to break ground next year on a power plant in Houston that will cost $800 million and create thousands of construction jobs, says its CEO, Andrew Perlman. Dow Chemical Co. and energy giants AES Corp., Suncor Energy Inc. and Peabody Energy are all GreatPoint investors.
"The opportunities," Perlman says, "are staggering."
A123 Systems, a Watertown, Mass., maker of lithium-ion batteries for electric cars, had one of the most lucrative public stock offerings this year, raising $437.5 million. Its stock price jumped more than 50 percent on the first day of trading in September, with investors willing to overlook that the company has yet to make money.
The Obama administration’s promises about clean tech funding have galvanized the industry, reassuring entrepreneurs that they will have paying customers. The administration has said it will focus on putting more hybrid cars on the road, boosting the amount of electricity from renewable sources, and investing in ways to cut pollution from coal.
One target is "smart grids." As utilities install digital meters in homes and Americans buy appliances that can communicate with the electric system, individual power consumption can be monitored more closely. People could be cued to dial down appliances such as refrigerators and air conditioners when electricity is in highest demand. Such fine-tuning in millions of homes can reduce the need for new power plants.
At Tendril Networks Inc. of Boulder, Colo., which makes software that links utilities to smart-grid devices in homes, the staff has tripled over the past five months, to 90. CEO Adrian Tuck says Tendril could grow even more if some of the $4.5 billion earmarked for smart grids in this year’s federal stimulus goes to Tendril’s clients.
"What we’re about to see is every bit as big as the telecom revolution that gave birth to the internet and cell phones," Tuck says. "It’s going to create as many jobs and as much wealth for this country, if they get it right. Big, Google-sized companies are going to be born in this era, and we hope to be one of them."
The government’s push for these developments parallels the expansion of railroads in the 19th century, when the government granted blocks of land to companies laying track, says Jack Brown, an associate professor in the University of Virginia’s Department of Science, Technology, and Society.
One difference, Brown points out, is that clean energy is such a vast field that government could make the wrong choice in backing one type of technology over another.
It’s not just startups getting in the game. General Electric Co. plans to string transmission lines to deliver solar or wind power. Hewlett-Packard Co. is adapting techniques for printer cartridge chips so digital sensors can send data to smart grids.
But how much of an economic boost does all this add up to? It’s hard to tell–at least at this stage, without products people actually want to buy.
The laser, for instance, was a big innovation, but it wasn’t clear at first what it could be used for. That’s why there wasn’t an economic boom in the 1960s from the advent of lasers, even though they ended up driving everything from medical devices to CD players for four decades.
Sung Won Sohn, an economics professor at California State University, Channel Islands, believes upgrading electric grids and finding new sources of power will provide steady job growth–but won’t be an economic powder keg.
Clean energy projects could simply replace old jobs and functions, like meter-readers. And there’s no guarantee that new jobs won’t shift to countries with cheaper labor.
Some innovations take longer to reveal their economic effects. There are big booms based on specific innovations–along the lines of railroads, automobiles, and the internet–and then there are technologies that grow slowly, spawning offshoot industries for entrepreneurs to exploit over decades.
For example, the emergence of the integrated circuit led to the development of computer microprocessors, which enabled the PC revolution and in turn the Internet Age. There’s every reason to believe energy technology will fall into the same category, Brown says, but he adds: "It depends on how the bets actually play out."