Cleantech Group 2014 national Index: will cleantech's future always be ahead of it?

There is hardly a dearth of rankings for various hi-tech fields, whether based on companies or countries. Nevertheless, this blogger has not encountered an abundance of such rankings in the area of cleantech. It was with particular interest that his attention was drawn to the Global Cleantech Innovation Index 2014, published in partnership between the Cleantech Group, here and World Wildlife Fund (WWF), here, with the cooperation of The Swedish Agency for Economic and Regional Growth (Tillväxtverket), here. This is the second such report, the first having been published in 2012. Forty countries were included in the report (readers interested in reading the full report may subscribe for a free download, here.)

The study conceives of “clean tech” broadly, noting as follows:

“The term has been used interchangeably with ‘resource innovation’, ‘industrial efficiency’, ‘sustainable technology’, but all essentially have the same meaning – doing more with less (e.g. fewer materials, less energy expenditure, reduced water availability),while making money doing so.” 

The ranking (called “index scores”) for each country is based on the “the average between inputs to innovation and outputs of innovation”, where “inputs” address the “creation of innovation” by a country, while “outputs” relate to the ability to commercialize such innovation. Generally speaking, inputs to innovation considered both a country’s “general innovation drivers” and “cleantech-specific innovation drivers.” Outputs to innovation considered what was called “evidence of emerging cleantech innovation” as well as indicia for commercializing this innovation. Further refinement of the methodology is set out in the report.

Based on this methodology, the results found that the top ten countries for cleantech innovation are as follows: Israel, Finland, United States, Sweden, Denmark, United Kingdom, Canada, Switzerland, Germany and Ireland. Israel’s ranking at the list was attributed in material part to its “outperformance of start-up companies per capita”, together with an especially fertile environment for start-up activities (as captured in the best-selling book about Israel, Start-Up Nation, here). The Report noted that, while such countries as China, India, and Brazil are not yet in the top rung, it can be expected that their rankings will rise given their research capabilities and commercial needs. The Report further observed that so-called laggards, such as Russia and Saudi Arabia, can be expected to show improvement in the cleantech area (that said, one wonders whether such prognostications may not have a whiff of political sensibility.)

From the point of view of patent activity, the Report noted a 100% increase in activity among the 40 countries between 2008-2011, with the United States and Japan leading the way. On a GDP basis, South Korea leads in the number of cleantech patents. In that connection, South Korea was mentioned for its implementation of fast track examination of in “green innovation” (Canada, the UK and Israel were also mentioned in this regard). For further discussion about fast tracking of “green” patents, see Antoine Dechezleprêtre , “Fast-tracking Green Patent Applications: An Empirical Analysis”, published by International Centre for Trade and Sustainable Development (ICTSD), here. It is unfortunate that more recent information about patent filings was not included and it is hoped that future reports will update patent filing data.

One can always query to what extent a ranking of this kind, based on taking the average of various factors, reflects what is really going on within the various countries surveyed. Seen from this angle, the index is perhaps most useful in setting out the broad categories of countries at the top, middle and bottom of the range of cleantech innovation and commercialization. Moreover, the Report includes substantial discussion of the cleantech innovation situation at the country level, which helps the reader get a much better feel for the nuances of various country situations. What emerges is a dizzyingly degree of diversity among the countries surveyed.

Perhaps the biggest cause for concern that comes out of this study is the disjunction between high levels of research innovation
and low levels of successful commercialization. There is no better example than Israel. Despite its overall no. 1 ranking on the index, it ranked only in 8th place in commercialization. Even more, Israel, together with Finland and Sweden, show the largest gap between cleantech innovative activity and monetizing the results of such research. Indeed, except for Denmark, the study found that virtually all countries with high levels of innovative activity in cleantech are finding commercialization to be a continuing challenge. A famous sportscaster in the U.S., Curt Gowdy, here, would sometimes observe that athletes had "their future ahead of them.” While Gowdy was sometimes mocked for saying this (isn’t the future always ahead of us?), there is a melancholy truth in his words, especially as they apply to cleantech. It is often observed that cleantech continues to be the “technology of the future” rather than the present. How we get from here to there is still the overarching challenge, no matter which countries come out on top.