Lost: Clean-tech Commercialisation Funding.

As discussed in a previous post, Australia ranks well among the G20 in terms of absolute and relative investment in green (as defined by UNEP) programmes in the stimulus spending.

UNEP defines the green component as consisting of investments into rail, smart grid, water and waste, building weatherisation programmes, renewable energy project subsidies, and low carbon vehicle programmes.

Much is made by some groups of the positive employment and economic growth potentiality of the clean-tech and sustainability sectors. In 1957 Robert Solow established the impact of innovation on output in his seminal paper ‘Technical Change and the Aggregate Production Function’.

The application of this thinking to the clean-tech world would seem to suggest that strong support throughout the innovation cycle will generate substantial output benefits.

Only last night Julia Gillard on lateline was speaking from California of such potentiality: of new industries, of employment benefits, of low-emissions technology, and the like.  In NSW, the State Parliament Hansard is littered with such references made by the then Minister for Climate Change, Carmel Tebbutt.  In Canberra, there are at least three agencies involved in administering funding for low emissions technologies.

So then it seems that the problem is solved: Government has identified the important role in can play, and has stepped into the breach with a range of programmes and assistance measures that meets the requirements of those brave souls stepping into the world of establishing new businesses and/or new technologies.

You would think.

Government programmes such as the Renewable Energy Target and Carbon Pollution Reduction Scheme will assist in providing the long-term economic framework to provide some security to green infrastructure deployment, that much is true.

But what about those measures due to assist companies navigate the technology ‘valley of death’? One successful programme, Climate Ready, which was administered by AusIndustry, closed its last funding round on 25 June this year.

It was successful because it was technology neutral, covered a breadth of the innovation cycle, and had a series of foreseeable sequenced funding rounds.

There are no such programmes that are currently open, to my knowledge. Any programmes that are in the pipeline are prescriptive.

Some of the technology investment programme promises may actually have slowed investment into clean technology in Australia. This assertion is currently only based on anecdotal evidence, but is echoed by others (see for example David Gold).  Companies and investors sit on their hands awaiting news of Government largesse, thus stalling development.

The new low-emissions programmes identified in the 2009-2010 budget have yet to be seen. Are we to await the formulation and operation of whole new implementation agencies such as ‘Renewables Australia’ or the ‘Australian Centre for Renewable Energy’ before any further funding is disbursed? What is the difference between these entities? When will they be operational? What funding will be available?

The only hint we have of what to expect on the Australian Centre for Renewable Energy comes from the Renewable Energy Target site, and states simply:

ACRE is expected to be established during 2009-10.

Very helpful.

An oft-quoted dictum is that most new businesses fail in their first year.

If innovative businesses in the clean-tech space in Australia must wait between 4-12 months to access Government assistance, then we can expect this to remain true, irrespective of all the cosy things being said.  

The only likely exports in such a scenario will be talent and technology, as entrepreneurs flee for more conducive incubating environments overseas.