What You Might Not Know About Cleantech and Oregon
December 06, 2016
Developing and growing cleantech businesses has been a priority for Oregon during the past 10 years, and it is paying off, writes Oregon BEST's David Kenney.
During the next several months, as Oregon’s governor and Legislature make tough decisions about budget priorities, one area they will evaluate is how to ensure that Oregon’s economy will continue to grow consistently — and sustainably — for many years ahead.
While most of the funding in the state’s budget will go to support current needs in education, human services, corrections and other areas, the small portion devoted to economic development can be tremendously catalytic and — when targeted effectively — help grow industry sectors that leverage our state’s many strengths. One sector in which Oregon has done this effectively is clean technology.
Clean technologies, or cleantech, represent the wide range of products and services that help address many of the environmental challenges facing the world, including clean energy solutions to fight climate change, water technologies to ensure that people have access to clean and safe drinking water, or precision agriculture tools to help farmers increase harvests while reducing the water and fertilizer needed.
Developing and growing cleantech businesses has been a priority for Oregon during the past 10 years, and it is paying off. Through Oregon Innovation Council funding, state tax credits and support for international trade missions, cleantech startups and mature companies alike have grown and created jobs while developing products that are reducing the impact people have on the planet.
Ranging from the startups we support at Oregon BEST, some of which are just one or two entrepreneurs or inventors when they start, to the highly advanced robotics and hundreds of employees found at SolarWorld’s Hillsboro facility, cleantech companies are having an economic impact in Oregon.
Even better, the future looks very bright for cleantech and for Oregon’s role as a cleantech leader. Despite political talk at the national level suggesting less emphasis on climate friendly policies, the demand for cleantech products is driven by business bottom lines, stakeholder demands, local and state policy and markets that are growing all over the world.
As Bloomberg New Energy Finance reports, “The clean economy merits attention because its growth responds to worldwide megatrends associated with critical national and world challenges — notably the growing demand for global environmental sustainability, the sharpening need for resource security and the aspiration everywhere toward economic transformation.”
Here are a few statistics you might not know about:
- Investment in cleantech is rising: Between 2000 and 2015, global investment in cleantech grew from $1.07 billion to $29.1 billion. In that same period, investment in Oregon cleantech grew nearly 10 times, from $3.5 million to $33. 4 million. (Source: i3 Connect Database)
- Cleantech = Manufacturing + Exports: The clean economy is both manufacturing and export intensive, with about 26 percent of all clean economy jobs offered by manufacturing establishments, compared with just nine percent in the broader economy. (Source: The Brookings Institution’s report, "Sizing the Clean Economy")
- Cleantech adds value: On a per-job basis, cleantech companies export twice as much value per job as a typical U.S. company. Clean jobs are on the rise: Oregon ranks No. 2 nationally in clean economy jobs per capita, with 3.4 percent of total jobs in the clean economy. And clean economy jobs for the pacific coast states are projected to grow from 508,000 in 2010 to more than 1.5 million by 2020. (Source: Brookings Institution)
- Cleantech creates rural jobs: Nearly one-fifth of clean economy jobs involve agriculture and/or natural resource conservation, an ideal fit for Oregon.
These statistics clearly suggest a robust future for cleantech in Oregon, and I'm pleased that Business Oregon and the Oregon Innovation Council have played a key role in supporting our state's visionary leadership in cleantech. I'm also proud that Oregon BEST is seeing tremendous results from our work pioneering cleantech development in Oregon during the past decade.
Oregon BEST has deployed $5 million in early-stage investments to more than 45 Oregon cleantech startups. Since these investments were made, these companies have secured more than $40 million in follow-on funding from private investors and competitive federal grants. This 8:1 follow-on funding ratio shows that these cleantech companies here in Oregon are recognized by national-caliber investors as strong contenders to scale up in competitive markets and succeed nationally.
In the last 15 months alone, Oregon BEST's portfolio of cleantech companies has brought more than $16 million into the state in follow-on grants and investments – with an additional $17 million in revenue earned by those same companies during that time.
When it comes to strategic economic development funding, it's clear to me that Oregon’s targeted approach — guided by the private-public Oregon Innovation Council — is paying off. In cleantech, Oregon has established itself as a national leader, and our state is seen as a great place to invest in innovation and technologies that are improving life on our planet.
Further, we see tremendous growth opportunities in a few specific areas. Smart cities, precision agriculture, smart grid and advanced wood products are all cleantech sectors that can create jobs and simultaneously strengthen many of Oregon’s traditional industry sectors.
As we like to say at Oregon BEST, cleantech is good for Oregon and the world, and Oregon is very good at cleantech.
David Kenney is the president and executive director of Oregon BEST.
This column appeared in the Portland Business Journal on Dec 6, 2016: