JEDDAH — Technology start-ups provide one of the most important vehicles for developing and commercializing innovation to meet these challenges, while generating value for investors. In “The Global Cleantech Innovation Index 2012” report based on evaluation of 38 countries on 15 indicators related to the creation and commercialization of cleantech start-ups, Saudi Arabia showed strong drive toward adoption of innovative clean energy solutions. The index highlights the fundamentally global nature of cleantech innovation, with both eastern and western hemispheres giving rise to new companies and key players. North America and northern Europe do emerge as the primary contributors to the development of innovative cleantech companies, though the Asia Pacific region is following closely behind. In terms of general innovation drivers which address the general conditions that facilitate the development of innovative start-ups in a country, Saudi Arabia was ranked number 11. Like any other form of technological innovation, cleantech innovation requires supportive institutions, enabling infrastructures, and a culture of ingenuity as well as a ‘championing' of entrepreneurial zeal. Entrepreneurial culture plays an especially important role in innovation, as it is primarily through entrepreneurial ventures that technologies achieve impact beyond the laboratory doors, out in the market where it counts. Even the most impressive ideas need drive and business skill to reach a wide market and realize their potential to achieve financial or environmental impact, hopefully both. This factor is a blend of the general innovation inputs as measured by the INSEAD Global Innovation Index and entrepreneurial culture as measured by the Global Entrepreneurship Monitor. US topped this scale, with Silicon Valley representing a case in point for how the above factors interact to foster the creation of innovative companies. Driven by the rich resources and strong research culture of San Francisco, Stanford University, and UC Berkley, this tiny area is home to a vibrant community of entrepreneurs that has spawned such titans as Google and Apple, as well as a new generation of cleantech companies like Miasole and Solazyme. Emerging US start-ups are supported by a strong venture capital market; even accounting for the nation's enormous GDP, the US has by far the most venture capital spending on cleantech amongst countries surveyed for this study, with over $5 billion invested in 2010 alone. The private sector's enthusiasm for cleantech is matched by mixed support from the US government.
Policies in the nation's states vary massively: California has a target to produce 33 percent of its energy renewably by 2020, while Pennsylvania's target for the same period starts with 8 percent17. The federal government is similarly inconsistent: while the Department of Energy has supported cleantech start-ups with $38.6 billion in loans issued to date18, Republicans in Congress are seeking to undercut the Environmental Protection Agency and forthcoming regulation under the Clean Air Act. Thus, while the US is currently a world leader in the creation of cleantech companies, without serious support for the industry and environmental policies to incentivize a domestic market, some of the potential profit and jobs from cleantech commercialization may be lost to foreign competitors. Brazil is an interesting case as the Global Entrepreneurship Monitor scores it highest for entrepreneurial culture. The country has policies supportive of renewable energy and world-leading biofuels production, but lacks significant numbers of innovative cleantech companies. Brazil has been developing its biofuels industry since the 1970s, when Brazilian companies began creating a first generation of biofuels innovations including agricultural techniques. — SG
