A cleantech edge with Ron Pernick - page 2 of 2

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You place a large emphasis in your book on China as a driver of the clean-tech industry. Tell us what we should be watching for in China, and why.

China, or more likely the Chinese populace, is going to wake up! Much like the environmental movements in the U.S. that came out of the book Silent Spring and images of the earth from space—and in Japan because of the Minamata disaster—Chinese (who now claim 7 of the 10 most polluted cities on the planet) are going to start demanding clean air and clean water. At some point development that forsakes people and the environment is no longer tenable. If you’ve been to Beijing or other major industrialized Chinese cities lately, you know the issue that I’m talking about.

Of course, in a top-down, central command government like you have in China, there’s no guarantee of change. That’s probably one of the biggest wild cards/question marks. But in our travels in China for the book and in our talks with government officials and business entrepreneurs, we believe things are indeed changing. In fact, the Chinese Renewable Energy Law will likely result in up to a 120 GW of new renewables being brought online by 2020, with up to $120 billion spent on this new capacity.

China will not only be an export nation, but with millions of Chinese moving out of poverty and into the middle classes, they’ll need a whole new breed of more efficient vehicles, clean energy devices, and more. China already leads the world in the deployment and use of solar hot water heaters and is getting active in biofuels and solar photovoltaics.

The Chinese and Indian markets—in terms of the mass consumption of clean technologies and the manufacturing of new products and services—cannot be ignored.

But I think one of the biggest challenges for foreign companies wanting to work in the growth market of China is how to navigate a very different economic and social landscape. This goes for any foreign market, but in particular China. You really need to have a deep understanding of the Chinese market. And, equally important, you need the right relationships (Guanxi) to make things happen there.

And with regards to establishing manufacturing in China, many companies we spoke with expressed concern around intellectual property issues. Some of them are summarily avoiding the Chinese market because they don’t want to see Chinese partners learn their business and then have patent infringement issues that they can’t enforce.

Others are only doing basic manufacturing in China, and keeping their “secret sauce” technology for manufacturing in the U.S. or Europe.

As you conducted research for the book, what unexpected data did you come across that have informed your thinking now?

One of the most interesting things to me is that the clean tech revolution is happening in so many places and in such a diverse range of companies, all at the same time. It’s not like it’s just being done by multinationals or by entrepreneurs in a garage.

And as we point out in the book this won’t emanate out of one place, like Silicon Valley. It is already, and will continue to be birthed, from dozens of diversified epicenters. Places like Shanghai, Hyderabad, Austin, and where I live, Portland, Oregon. The depth and breadth of the activity and investments being made by venture capitalists, corporations, entrepreneurs, governments, and individuals is quite remarkable.

Given what you learned over this project, is the world’s glass “half empty,” or “half full?” In other words, given what you know now, are you choosing to see the future as one of scarcity, where we must compromise the lifestyles we’ve grown accustomed to, or one of abundance, where we can, in fact, get everything we might want?

In general I consider myself a pragmatic optimist. Which means I work to stay grounded, understand the obstacles and challenges, but believe overall in the larger opportunity for positive change through human ingenuity and creativity. So, I guess you could say I see the glass as half full, with caveats.