Global clean­tech key to green growth

New Zealand clean­tech guru Dun­can Ste­wart re­ports from the Global Green Growth In­sti­tute Sum­mit in Korea.

Element - - Business - DUN­CAN STE­WART

The Global Green Growth In­sti­tute (GGGI) Sum­mit on 10-11 June in Seoul was an eye-open­ing ex­pe­ri­ence for a num­ber of rea­sons. In a prac­ti­cal sense the scale of South Korean or­gan­i­sa­tional think­ing is man­i­fest in the Songdo Con­ven­sia – a vast ‘in­ter­na­tional city’ pur­pose­built to at­tract and re­tain this type of event; the Kore­ans re­alise that con­fer­ences not only make eco­nomic sense, they can also be used as a means of cap­tur­ing in­tel­lec­tual in­no­va­tion. Even more com­pelling was the depth of green growth strate­gic think­ing and eco­nomic self­assess­ment demon­strated by at­tend­ing na­tions. In this sense New Zealand has a lot be proud of, but it also has a lot to learn.

Green growth is not an ab­stract con­cept in South Korea, it’s a re­al­ity that de­liv­ers bil­lions in eco­nomic re­turns and at the same time im­proves en­ergy ef­fi­ciency, wa­ter qual­ity, food se­cu­rity and pub­lic health. The 27 core tech­nolo­gies deemed as use­ful so­lu­tions to en­vi­ron­men­tal and en­ergy chal­lenges and fa­cil­i­tat­ing tran­si­tion to low-car­bon, green in­dus­tries have a to­tal mar­ket value of USD$1.5tn, and are ex­pected to be worth USD$5.7tn by 2020. Do­mes­tic bank loans for green busi­ness and projects are more than USD$4.5bn. Green in­vest­ment funds to­tal more than USD$1.5bn. Big busi­ness by any mea­sure.

Green growth was for­mally in­tro­duced in South Korea in 2008 by way of a min­is­te­rial taskforce un­der the aus­pices of then Pres­i­dent Lee Myung-bak. The pos­i­tive eco­nomic and en­vi­ron­men­tal out­comes de­liv­ered by this lead­er­ship, in what was a rel­a­tively short five-year pe­riod, is now the sub­ject of in­tense study for econ­o­mists glob­ally.

True, if we look closely, Korea has sig­nif­i­cant tools that New Zealand does not; a 50-mil­lion strong pop­u­la­tion, a more cen­tral style of govern­ment and what we might po­litely re­fer to as ‘less em­pha­sis on life­style’ than your aver­age Kiwi. But also re­mem­ber that South Korea tran­si­tioned it­self into a high-tech man­u­fac­tur­ing pow­er­house from a very poor post-war agri­cul­tural na­tion in the 1950s. In­sight, will­ing­ness and lead­er­ship can achieve great things.

Some rel­e­vant lessons New Zealand can im­port from the South Korean ex­pe­ri­ence, both in terms of green growth and for ‘clean­tech’, as a more en­vi­ron­men­tally be­nign tech­no­log­i­cal in­no­va­tion sub­set of green growth, in­clude:

Put the green de­bate to one side: en­vi­ron­men­tal tox­i­c­ity, re­source con­straints and in­ef­fi­cient use of en­ergy even­tu­ally in­hibit eco­nomic growth. There­fore the point at which a na­tion be­gins to steer its econ­omy in a di­rec­tion that is ‘sus­tain­able,’ (i.e. “can con­tinue in per­pe­tu­ity”) dic­tates the ex­tent of long-run cost ad­just­ments that will in­evitably be re­alised.

Cap­ture dif­fuse value: Clean tech­nol­ogy also pro­vides en­vi­ron­men­tal and so­cial ben­e­fits not nec­es­sar­ily cap­tured by the en­tre­pre­neur, so to en­cour­age growth in spe­cific mar­kets, mech­a­nisms need to be de­vel­oped to ac­count for this value, such as (a). in­creas­ing R&D via credit pro­grammes, (b). pro­vid­ing di­rect fi­nance and de-risk­ing in­vest­ment ex­its, (c). es­tab­lish­ing busi­ness in­cu­ba­tors and net­works of in­cu­ba­tors, and (d). scal­ing up ex­ist­ing tech­nolo­gies through di­rect fund­ing.

Top-down pol­icy re­quires bot­tom-up ca­pa­bil­ity:

Pol­icy in­ter­ven­tion works best when lo­cal/do­mes­tic en­tre­pre­neur­ial busi­ness sys­tems are in place, es­pe­cially for New Zealand’s pre­dom­i­nantly SME busi­ness com­mu­nity, where ca­pa­bil­ity tends to be thin.

Holis­tic in­vest­ment ap­proach: En­cour­age in­vestors to stop think­ing about pick­ing win­ning com­pa­nies, and in­stead think about cre­at­ing win­ning ecosys­tems be­tween cus­tomer, fi­nance, tech­nol­ogy and en­trepreneurs.

Tech­nol­ogy trans­fer can lead to tech­nol­ogy de­pen­dence:

Dif­fer­en­ti­ate be­tween tech­nolo­gies which ac­cel­er­ate per­for­mance and im­prove ef­fi­ciency, and those cre­at­ing an un­af­ford­able de­pen­dence and con­tribut­ing to en­ergy in­ten­sity. Fo­cus the na­tion on as­set cre­ation, not own­ing the lat­est heat pump or air con­di­tioner.

Tak­ing th­ese fac­tors into ac­count, over­all I am re­ally en­cour­aged by what I am see­ing in New Zealand right now – ex­cel­lent work by the likes of Land and Wa­ter Fo­rum has lead to mean­ing­ful pol­icy change around wa­ter man­age­ment, re­gional and city eco­nomic de­vel­op­ment agen­cies are now look­ing at ways to em­brace green growth through plan­ning tools, and cen­tral govern­ment is tak­ing a closer look at how long term wealth might be gen­er­ated by green­ing key as­pects of the econ­omy.

Pure Ad­van­tage will shortly re­lease de­tails of our first three in­te­grated work­streams un­der­way in af­ford­able en­ergy ef­fi­cient homes, woody-mass bio­fuel and sus­tain­able agri­cul­ture.

There is much to be done, but it does feel like real progress is be­ing made.

South Korea is forg­ing ahead on the clean­tech jour­ney.

Aun­can Ste­wart is an en­vi­ron­men­tal sci­en­tist and en­tre­pre­neur­ial in­vestor with a pas­sion for growth busi­nesses and in­no­va­tive tech­nol­o­gyi He holds a grow­ing port­fo­lio of clean­tech com­pa­nies un­der ad­vi­sory brand The Green­housem is the CEO of green growth busi­ness group Pure Ed­van­tagem and a board mem­ber of the New Zealand elec­tric ve­hi­cle as­so­ci­a­tion EPEVi

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