A New Shade of “Green”
Let us pause, briefly, to applaud Mayor Martin Chavez for his efforts on getting Albuquerque “green”—most notably, on just the idea of being “green.” We can have our quibbles on how this effort was done and what was accomplished, but let’s be clear here: We’ve moved well beyond “why.” That is no small accomplishment.
While Mayor-Elect Richard Berry continues his transition, let’s also consider a small but important question: What now? There weren’t many clues along the campaign trail about how Berry sees green efforts to date. He did not bludgeon the Mayor’s efforts as he did with the streetcar. Still, one has to wonder where his head is at.
For clarity, we'll narrow the lens of “green” to technology—as in investment, startup activity and jobs. Leave aside some of the efforts of Chavez, which tended to tack governmentally inward with programs to retrofit and refuel city vehicles, and to fix city buildings so they heat and cool efficiently.
In the past, a DOE-sponsored event would not be the most likely forum for this kind of activity, but how times have changed. Put it this way: Government is not the enemy.
There’s an opportunity to take what Chavez pushed forward as a concept, massage it and start turning it into real dollars.
Like all campaigns, it starts with the language. Mayor Berry would be well-served to begin using the phrase “clean technology” and flat-out get away from the term “green.” Leave the word as a Chavez legacy. While still viable, “green” has become too pedestrian. Green can mean turning off lights and recycling and everyday conservation, but it’s not what venture capitalists are looking for.
“Clean”—or its variants “clean-tech" and “clean energy”—is the word that pricks up the ears of today's players. Who those players are is the interesting bit.
A couple weeks ago, the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) put on the Industry Growth Forum in Denver. It was populated by angel and seed investors, venture capitalists and government officials, all there to consider proposals from clean technology mavericks.
In the past, a DOE-sponsored event would not be the most likely forum for this kind of activity, but how times have changed. Put it this way: Government is not the enemy. The smart angle is a combination of private and government capital, considering private equity firms are on their asses these days. Without them, the middle tier for financing has a huge hole, and the government has become, through default, the provider of last resort in that area.
Tens of billions in capital is going to flow into this space, and we should prepare for our share of the largesse.
It’s the perfect scenario for Albuquerque. The Obama administration has earmarked a stout $66 billion in stimulus money for renewable energy. About 75 percent of it has yet to be allocated. Governments worldwide have pledged about $163 billion on similar programs.
Earlier this year President Obama announced an additional $1.2 billion for science research at national labs and a proposal to extend a business tax credit for investments in research and development in clean technology. Talk about tailor-made for Albuquerque. It’s right in Sandia National Labs’ wheelhouse, as it became part of Sandia’s mission when the labs were directed by Congress to work in renewable energy.
On the private side, third-quarter numbers for venture capital investments in clean companies spiked sharply, with $1.9 billion in 112 deals in North America and Europe, according to Green Media Inc. That’s up from $836 million in 59 deals in the first quarter of 2009. And $1.9 billion is close to pre-recession investment venture capital numbers. For perspective, that’s more than what was invested in software and biotech companies in the third quarter.
Of note for Albuquerque and the relative scale of our startup companies, there were about 35 seed-funding investments this quarter. This is a significant change, given that a lot of clean tech entrepreneurs here are right in that sweet spot of needing seed capital. Bill Gates started with seed capital and then was turned down by every bank in town for more. Do we have to revisit that historic swing and miss?
Tens of billions in capital is going to flow into this space, and we should prepare for our share of the largesse. Potential federal mandates for clean energy by utilities, the rebound in venture capital investments and a ton of other signs point toward salad days for local clean-tech entrepreneurs.
The title for one of the NREL breakout sessions, “Preparing for a Game Change,” well describes where Mayor Berry’s head should be in this situation. If he needs any clarification, he needn’t look any further than the person who is leading his transition efforts: Technology Ventures Corporation CEO Sherman McCorkle.
McCorkle has spearheaded TVC’s Equity Capital Symposium for 17 years, with an eye for putting tech developed in labs out into the private market. We know how to shake the federal money tree to the tune of more than $1 billion in investments and 12,000 jobs. More than 100 new businesses stood up through the symposium.
So, here’s what I’m proposing.
A shakeup of the city’s economic development department with a focused priority on clean technology and those who toil in it here. Leave the mom-and-pop stuff to the Greater Albuquerque Chamber of Commerce. Make this department a capital and investment midwife for emerging clean-tech companies. More importantly, grab someone out of the private side to head the entire department. It would send a huge message.
Mayor Chavez got us “green.” The buses are not polluting anymore, the buildings are greener, recycling is moving (albeit jerkily) forward, Mesa del Sol has broken ground—and those are all good things.
Mayor Berry, with some precision, boldness and vision, can get us “clean.” That’s an even better thing.
The opinions expressed are solely those of the author.