Published on March 20th, 2019 | by Steve Hanley0
Cleantech Startups Thrive When They Collaborate With Government Agencies
March 20th, 2019 by Steve Hanley
An international team of researchers at the University of Cambridge, the Technical University of Munich, and the University of Maryland reports that startups which collaborate with government agencies file 73% more patent applications than those who do not pursue such collaboration. Their report, published March 7 in the journal Research Policy, is entitled Governments as partners: The role of alliances in U.S. cleantech startup innovation. The findings could have important implications for new green startups in the cleantech sector.
“Our findings suggest that some of the signs commonly used to track innovation and business success, such as patents and financing, increase when new cleantech companies partner with US government departments or labs,” says study co-author Laura Diaz Anadon, professor of climate change policy at the University of Cambridge. According to Science Daily, the patenting activity of a startup climbs by more than 73% every time they collaborate with a government agency on “cleantech” development — from next-generation solar cells to new energy storage materials.
The study also found that every time a cleantech startup licensed a technology developed by a government agency, the company secured more than double the amount of financing deals when compared to similar startups and a 155% increase one year after taking out a license.
Professor Claudia Doblinger at the Technical University of Munich, said: “Government research laboratories have a major role to play in the climate challenge but also the growth of small businesses — twin objectives at the heart of many policy discussions such as the Green New Deal in the United States.”
The researchers studied assembled data on 657 US cleantech startups and the more than 2,000 partnerships those companies established between 2008 and 2012 to gauge the different outcomes for private and public alliances. 66% of the startups were less than five years old in 2008. The remainder were formed during the study period. The research included companies across the sustainable sector from wind power to marine power, recycling, and batteries.
The research results suggest government agencies like the US Department of Energy have a long term perspective that private investors often lack. Agencies like the 17 national laboratories that are part of the DOE — particularly the National Renewable Energy Laboratory — are a natural compliment to nimble startups that can adapt technological developments to market opportunities at a faster rate.
“Governments can and should have longer-term perspectives when compared to the private sector, and thus play a critical role in energy innovation,” said study co-author Prof Kavita Surana, from the University of Maryland. “Beyond grants and supporting the early markets, it is the joint development and transfer of knowledge that government agencies are able to foster with startups that makes a difference.
“As the US Congress and civil society prepare to debate the substance of the policies like the Green New Deal, facilitating public-private partnerships could well be an important, and relatively inexpensive, part of any forward-looking policy package,” Surana said.
Because NREL is located in Colorado, it has helped promote cleantech startups outside of Silicon Valley, distributing the innovative forces at work in cleantech today to parts of the country not normally associated with cutting edge green technology.
The researchers point out that NREL has granted more than 260 licenses since 2000, an indication of how valuable government agencies are to startups in particular. “Initiatives such as investing more in technology transfer capabilities, starting entrepreneurs in residence programs, or allowing government scientists to take temporary leave to work with a private firm, could reduce information asymmetry and provide incentives to researchers,” Professor Doblinger said.
The lessons learned from the study apply outside the US as well, says Professor Anadon. “For the agencies of any government to successfully work with startups, sufficient and stable funding is vital — along with technology transfer and communication support. Our findings should be taken into consideration whenever funding for public research into sustainable energy is being debated. Cleantech that comes from public-private partnerships will be essential for meeting global climate and sustainability goals,” she said.
It is popular among so-called conservatives to pillory government partnerships. They love to slap their knees and chortle into their whiskey about the Solyndra debacle that saw a major government investment dissolve into nothing, leaving an ugly bankruptcy behind. These are the same people who clamor for more fossil fuel subsidies, however, giving the lie to their purity of thought. Government assistance is welcome when it puts money in their pocket but when it helps someone else it is something to be vigorously opposed.
The world is in desperate need of new renewable energy and storage technologies, new recycling ideas, new carbon reduction programs, and new electric vehicle breakthroughs. In most cases, only government agencies have the tolerance for such long term programs. The private sector is focused on results next quarter or next week. As the Trump maladministration seeks to take a chainsaw to the Department of Energy budget, America’s political leaders would be wise to see that essential basic research programs are vital to America’s long term interests and remain fully funded.