Clean Tech Outlook 2011, Part 1: Professor Peter Adriaens Weighs in On China and Shifts in the Investment landscape

Shannon Beeman
November 30, 2010

Michigan has been positioning itself for several years as the nation’s hub for clean tech innovation and the Institute continues to play an important role in developments. Not only are several of the nation’s most promising clean tech start-ups rooted at the Institute, including Vortex Hydro Energy and Ambiq Micro, but also the ground-breaking “Clean Tech Venture Assessment” and related courses have paved the way for bringing together MBA and engineering students to apply skills in technology commercialization, marketing and business development to the clean tech space.

Professor Peter Adriaens is a faculty member of the University of Michigan’s School of Business and Natural Resources and the Environment and College of Engineering, where he regularly teaches clean tech courses. We recently sat down with him to get his take on where the industry is headed in 2011. Here is the first in a two-part overview of his 2011 clean tech outlook:

  • Co-Opetition With China Continues – The ongoing battle between the U.S. and China for clean tech dominance is far from over, and neither country will emerge as a winner. The U.S. has developed a culture of innovation and entrepreneurship necessary for clean tech R&D and early-stage investment, yet China has the policy and infrastructure to actually deploy it. Partnerships, investments and policies that span both countries will continue to be critical to the entire industry’s advancement.
  • Focus on Software for Greater Capital Efficiency – Like many other sectors that were impacted by the recession, there is an intense focus on capital efficiency on all clean tech investments. In turn, there is a shift away from resource-intensive hardware investments that require intense physical infrastructure changes and a movement towards more software deals (data and energy management), which are more easily scalable and require less capital over less time.
  • Increase in Corporate Investments & Acquisition Activity – Private venture capital firms were the dominant investors in the industry to-date, but to fill the void caused by lack of liquidity during the economic downturn, direct and venture investments by corporations have increased. There will be more corporations taking minority stakes in start-ups and with this, there is also likely to be greater acquisition activity.