Wednesday, 25 July 2007

Mega trendy

Ernst & Young's latest Global Venture Capital Insights Report (released last week, and downloadable from here) includes a lengthy round-table discussion of 'Clean Technology Mega Trends'. It's based around seven key trends for 2007-08 identified by the Cleantech Network. These are, in short:
The ICT industry 'waking to both its environmental impacts and market applications and opportunities';
China 'both leading and lagging the world in use of cleantech';
Water scarcity to 'emerge as an issue equal in scale to energy';
Toxicity of industrial products, with rising public concern (again?) forecast, particularly in the EU;
'C-Suite' - senior executives 'taking direct line responsibility for the environment';
Carbon innovation - 'debate and action will increasingly focus on R&D, market creation and purchasing decisions; and
Policy, where 'governmental decision-makers are starting to see cleantech as a major source of new jobs, wealth creation and property value, as well as a solution to pressing energy and environmental problems'.

Nicholas Parker of the Cleantech Network, Stephen Dolezalek of Vantage Point Venture Partners, Heinz Haller of Dow and Jeff Lipton of the Jefferies investment bank kick those round the table. There's nothing radically new comes out of it, but it's a decent overview of (US-centric) thinking on the state of play.

The article also includes a handy graphic of 'Global energy technology venture backed companies', showing 100-odd such companies arranged by sector and sub-sector, which is now pinned over my desk.

As for the trend in the other sense of the word - ie, fashionability - I had an interesting chat recently with a prominent tech corporate finance specialist for a piece I'm writing on the broader resurgence of early-stage VC. He noted, in response to a question about hot areas, that cleantech is a place where a lot of cash is currently being generated: "Everyone is redefining their funds as cleantech - when you talk to guys like Esprit or August they say 'We have 15 cleantech investments, we just didn't call them that at the time'[...] We've got a couple of things we're doing at the moment in cleantech, and we're having people knocking on the door because they've got cleantech funds to invest."
Let's hope that appetite isn't followed, as it so often is in hot areas of tech, by too much indigestion.

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