sweden in the global cleantech innovation index 2017 in the global... · 1. low volumes of domestic...

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SWEDEN IN THE GLOBAL CLEANTECH INNOVATION INDEX 2017

LEAD AUTHORChris Sworder, Analyst, Cleantech Group [email protected]

REFERENCE GROUPRichard Youngman, CEO, Cleantech Group

Andreas Stubelius, Energimyndigheten

Axel Nekham, Tillväxtverket

Stefan Henningsson, Senior Adviser Climate, Energy & Innovation, WWF Sweden

ABOUT ENERGIMYNDIGHETEN THE SWEDISH ENERGY AGENCY

The Swedish Energy Agency is a national authority that works for a sustainable energy system by combining ecological sustainability, competitiveness and security of energy supply. The Agency has a broad spectrum of roles with the aim to attain energy and climate objectives. The Agency finances research for new and renewable energy technologies, smart grids, vehicles and transport fuels of the future. The Agency also supports growth of the Swedish business community through realization of energy related innovations and new business ideas. The Business development department has a special role in commercialising new energy innovations and technology. There is a more than 80% survival degree for the funded companies and an evaluation of the portfolio shows a potential to save 750 million ton of CO2E on an annual base.

ABOUT TILLVÄXTVERKET – THE SWEDISH AGENCY FOR ECONOMIC AND REGIONAL GROWTH

Tillväxtverket, The Swedish Agency for Economic and Regional Growth, is a government agency under the Ministry of Enterprise and Innovation. We promote economic growth in Sweden by increasing the competitiveness of companies. We work to strengthen the competitiveness by facilitating entrepreneurship and creating attractive environments for companies in the regions. Our vision is to have more companies in Sweden that want to grow and have the capabilities and courage to do so. Knowledge, networks and funding are our main tools to achieve it. One task for the Agency is to support small and medium sized enterprises with fully developed green goods and services in their business development. The aim of the financial support is to strengthen their competitiveness in domestic and international markets.

www.tillvaxtverket.se

ABOUT CLEANTECH GROUPFounded in 2002, the mission of Cleantech Group (CTG) is to accelerate sustainable innovation.

Our custom research, subscriptions, events and programs are all designed to help corporates, investors, and all players in the innovation ecosystem discover and connect with the key companies, trends, and people in the market. Our coverage is global, spans the entire clean technology theme and is relevant to the future of all industries.

The company is headquartered in San Francisco, with a growing international presence in London. Learn more at cleantech.com. Our parent company, Enovation Partners, one of Consulting Magazine’s 7 to Watch, is based in Chicago (learn more at enovationpartners.com).

www.cleantech.com

ACKNOWLEDGEMENTS

PARTNERS

ABOUT WWFWWF is one of the world’s largest and most experienced independent conservation organizations, with over 5 million supporters and a global network active in more than 100 countries. WWF’s mission is to stop the degradation of the planet’s natural environment and to build a future in which humans live in harmony with nature, by conserving the world’s biological diversity, ensuring that the use of renewable natural resources is sustainable, and promoting the reduction of pollution and wasteful consumption. The Climate and Energy Practice (CEP) works towards an equitable and just transition that limits warming to 1.5°C degrees, protects people and biodiversity and builds a climate resilient future. A future with universal energy access by 2030, doubled energy efficiency, and a sustainable and fossil fuel free energy system. The core team is based in Berlin, Germany.

www.panda.org/climateandenergy

Disclaimer

The report was developed as an in-depth study for Sweden in relation to WWF and Cleantech Group’s Global Cleantech Innovation Index, 2017. The views expressed in this report are the authors’ own and not necessarily those of WWF, Tillväxtverket or Energimyndigheten. The inclusion of company examples in this publication is intended strictly for learning purposes and does not in any way constitute an endorsement of the individual companies by WWF, Tillväxtverket or Energimyndigheten. Tillväxtverket and Energi myndigheten contributed with generous support towards this study as well as towards the Global Cleantech Innovation Index 2017.

Cover photo: © Chombosan / iStock Background Photo: © Global Warming Images / WWF Printed by Åtta45

mailto:chris.sworder%40cleantech.com%20%0D?subject=

EXECUTIVE SUMMARYThis report aims to summarise the factors that led to Sweden being placed 3rd overall in the 2017 Global Cleantech Innovation Index, before making a critical assessment of how the country could do to claim the top spot by addressing remaining weaknesses and thereby becoming a true global hotspot in continually nurturing and growing cleantech innovation start-ups at scale.

The 2017 edition of the Global Cleantech Innovation Index (GCII) labelled Sweden as a ‘top ecosystem creator’ as a result of the strong scores the country showed in all the inputs to cleantech innovation measured in that Index. However, Sweden has for a long time demonstrated a high-level understanding of the complex factors and technological risks which can affect entrepreneurs, investors, and other stakeholders in promoting sustainable innovation, and has often arrived at creative solutions to facilitate innovation. Indeed, this capacity for innovation has resulted in an improvement in the country’s GCII positioning, rising from 4th in 2014 to 3rd in 2017.

Strengths and Weaknesses SummaryStrengths Weakness

1. Sweden is a ‘top ecosystem creator’ according to the 2017 Global Cleantech Innovation Index

1. Low volumes of domestic cleantech venture capital deployment

2. Leader in general innovation drivers 2. Sweden is not currently an attractive destination for modern renewable energy investments, while having high renewable energy penetration and associated jobs

3. Strong cleantech policy, and focused government institutions, combine to make the Swedish government strongly supportive of cleantech

3. Low efficiency in converting cleantech innovation inputs into commercialised output

4. Sweden has an impressive number of cleantech investors 4. Sweden shows evidence of having relatively weak cleantech commodity trade flows

5. Sweden is seeing increasing amounts of cleantech company commercialisation and IPOs

5. A good number of cleantech IPOs may not be an indicator of successful venture capital exits

Sweden has a very strong base of innovation. This is exemplified by very strong scores in Global Cleantech Innovation Index indicators that aim to measure drivers of innovation, such as cleantech-friendly government policies, early stage entrepreneurial activity, and others.1 However, Sweden does not show a correspondingly high score across indicators that measure the commercialisation of cleantech companies. Therefore, a key observation in this report is that Sweden should improve pathways to successful commercialisation of innovation. In doing so, Sweden has enormous potential to increase cleantech exports, as well as further improving innovation in the domestic market.

Whilst other factors contribute to this observation, a lack of financing options has been observed. This observation is in line with the Swedish Growth Agency’s outlook, based on previous studies and experiences. Venture capital can bridge the liquidity gap that often occurs in new companies until the business is self-financed or in connection with a rapid expansion. The same positive effect has not been found for cleantech in Sweden. Investments made have often not lived up to expectations and the

1 These are outlined further in Research Context, and in detail in Sweden in the GCII – An Overview

4 Sweden in the Global Cleantech Innovation Index 2017

Cleantech Group and WWF

area as such has difficulty attracting domestic venture capital. Cleantech has proved difficult to meet domestic venture capital funds’ investment criteria.2 Furthermore, there is evidence that a lack of attractiveness for new renewable energy infrastructure investments, and limited amounts in cleantech focused funds, are areas that must be addressed for developing world leading drivers of cleantech innovation in the future.

RECOMMENDATIONS SUMMARY1. Sweden should continue towards doubling of cleantech R&D

expenditure that was committed to at COP21 in Paris

2. Sweden should strengthen its efforts at encouraging private early-stage investment in cleantech companies. In particular there is an opportunity to leverage the positive momentum on equity finance from cleantech IPO listings and the growth of green bonds for debt financing. A deeper dive into business models, and foreign vs public/private domestic cleantech venture capital and other expansion finance opportunities for Sweden, is feasible and should be a natural part of this.

3. Sweden is failing to adequately fund and bridge the ‘valley of death’ where start-ups accelerate growth into fully commercialised companies.

4. Work on improving Early Stage Entrepreneurial Activity, R&D doubling, increasing the presence and amount of cleantech funds, improving the attractiveness of renewable energy infrastructure finance, are all pathways to improving inputs to innovation that can be converted into commercialised cleantech.

5. Being one of the few countries that have reached ‘top ecosystem creator’ status in the 2017 GCII, Sweden has a lot of experience to share with other countries on the necessity to work with cleantech across the innovation ecosystem. One unique such opportunity presents itself in Sweden hosting Mission Innovation in 2018.

6. Sweden must also work on ever increasing market demand for cleantech by continually working on approaching a more circular economy and science based action on climate change, water scarcity and other pressing issues from country laws and regulation, regions & cities, financial actors and corporate sector.

2 KTH, Alternative business models for venture capital in cleantech, http://kth.diva-portal.org/smash/get/diva2:1077452/FULLTEXT01.pdf

http://kth.diva-portal.org/smash/get/diva2:1077452/FULLTEXT01.pdf

http://kth.diva-portal.org/smash/get/diva2:1077452/FULLTEXT01.pdf

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Sweden in the Global Cleantech Innovation Index 2017

CONTENTSAcknowledgements 2

Executive Summary 3Strengths and Weaknesses Summary 3

Recommendations Summary 4

Introduction 6

Research Context – the 2017 GCII 8Energy and Water Innovation in Sweden 10

Sweden in the GCII 11

An Overview 11

Strengths 14

Weaknesses 15

Benchmarking against other countries 19Sweden 19

The United Kingdom 22

The United States 24

France 25

Recommendations 29Appendix A – Indicators and Sources 31Appendix B - Framework 32Appendix C – Methodological Considerations 33Appendix D - Further Research Recommendations 35Glossary 36



INTRODUCTIONFrom Celsius to Skype, Sweden has provided a strong base for innovation for a long time. When combined with a strong environmental record (Stockholm hosted the first UN conference on the environment in 1972), Sweden has developed a strong cleantech ecosystem that consistently ranks among the top countries in the world for innovation and strength of the green economy.

The 2017 edition of the Global Cleantech Innovation Index (GCII) labelled Sweden as a ‘top ecosystem creator’ as a result of the strong scores the country showed in all the inputs to cleantech innovation measured in that Index. However, Sweden has for a long time demonstrated a high-level understanding of the complex factors and technological risks which can affect entrepreneurs, investors, and other stakeholders in promoting sustainable innovation, and has often arrived at creative solutions to facilitate innovation. Indeed, this capacity for innovation has resulted in an improvement in the country’s GCII positioning, rising from 4th in 2014 to 3rd in 2017. In addition to this, and as has been corroborated by talking to Swedish cleantech start-up CEO’s, Swedish innovators want to work in the cleantech sphere. Personal driving forces based on awareness and support from climate goals and policies ensures that their efforts are directed at cleantech solutions.

However, there is no ceiling, or ‘full marks’, for indicators used in the GCII. More needs to be done globally across all measurements, whether it is to increase investment in research by increasing cleantech R&D budgets (as is the driving COP21 in Paris commitment for Sweden and those 21 other countries backing Mission Innovation), increasing renewable energy penetration to combat climate change or saving water and other precious resources as one way of halting our alarming biodiversity loss. Each of the countries in the Index should aspire to improve each indicator in their country profile rather than improve rank, and use this Index to support and communicate strengths while addressing weaknesses.3

3 WWF, Cleantech Group, 2017 Global Cleantech Innovation Index, pg. 45

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It is particularly difficult to know what mix of policy and programs will contribute most effectively to further develop the cleantech ecosystem in Sweden. A look at some recent Swedish initiatives certainly concentrate on the cleantech theme, whilst also providing solutions to some of the deficiencies highlighted in the 2014 GCII. For example, the National Innovation Council (NIC) announced five strategic innovation partnership programmes in June 2016,4 with four of the five directly relevant to the cleantech theme, only ‘life sciences’ is unrelated. 5 Indeed, these five partnership programmes are based on three main NIC innovation foci; digital transformation, environment & climate, and life sciences. Cleantech, as the intersection of digital transformation and environment & climate, is therefore at the core of Swedish innovation policy. Commercialising such innovation, from Sweden and other countries, into more and faster growing business on global markets is at the core of humanity trying to stay within planetary boundaries.

Every country has strengths and weaknesses. In this report we once again aim to zoom into the areas where Sweden scores lower relative to other countries in order to understand where resources should be allocated, and to discern what strategy could be adopted to remain globally competitive.6

4 Namely: 1. The next generation’s travel and transport, 2. Smart cities, 3. Circular and bio-based economy, 4. life sciences, and 5. A connected industry and new materials

5 Government Offices of Sweden, Innovation partnership programmes – mobilising new ways to meet societal change, 2016, URL

6 Cleantech Group, Sweden in the Global Cleantech Innovation Index, 2014, pg. 3

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RESEARCH CONTEXT – THE 2017 GCII

The overall score for each country is based on the average between inputs to innovation, and outputs of innovation. By definition, inputs correspond to the creation of innovation (the development of technology supply) and outputs relate to the country’s ability to commercialise innovation. Each of these inputs and outputs are determined by four equally weighted sets of indicators. The four pillars are built from a total of 21 metrics, condensed into 15 indicators, drawn from both third-party research and Cleantech Group’s proprietary data. The raw data for each indicator was normalised using a max-min scaling method to allow for comparisons on a common scale. Outliers were identified as those data points outside the upper and lower bounds,

Inputs to Innovation

A: General Innovation Drivers

• General innovation inputs

• Entrepreneurial culture

B: Cleantech- Specific Innovation Drivers

• Government policies

• Public R&D spending

• Access to private finance

• Infrastructure for renewables

• Cleantech industry organsiations

Outputs of Innovation

C: Evidence of Emerging Cleantech Innovation

• Early-stage private investment

• High impact companies

• Environmental patents

D: Evidence of Commercialised Cleantech Innovation

• Cleantech Imports and Exports

• Renewable energy consumption

• Late-stage investment and exits

• Listed cleantech companies

• Employees

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and then were attributed the value of the upper bound pre-normalisation of the data set. Where relevant, indicators were analysed from a ‘per GDP purchase power parity’ basis to account for relative accomplishment by size of economy, with the exception of renewable energy consumption (which we calculated as a percent of countries’ primary energy consumption) and employment (which is measured on a per total labour force basis). The indicators span from 2013 to 2016 data, which means that the performance score of countries is not fully up to date. The Index results and its country profiles should therefore be interpreted as strengths and weaknesses in relation to other countries in the 2013-2016 period. More recent positive or negative changes are not captured in the Index score. The limitation of data updates is also the main reason the Global Cleantech Innovation Index is updated less frequently than every year.

The scope of the study covered 40 countries, including all of the G20. In order to maintain comparability with the 2014 GCII, this report will not expand this selection in the 2017 Index. However, two additions have been made to the Global Cleantech Innovation Index programme generally. Firstly, a supplemental study of a number of Asian countries7 was conducted. In this report, data availability restricted a complete indexing of all of the Asian countries targeted, but their general position was determined relative to Asian countries that already appear in the GCII (Japan, India, Singapore, South Korea, and China). Secondly, using the GCII methodology as a guide, a cleantech innovation ecosystems assessment was conducted for members of UNIDO’s Global Cleantech Innovation Programme (GCIP), which includes India, South Africa, Armenia, Morocco, Turkey, Malaysia, Thailand, and Pakistan. Once again, data restrictions prevented five of these countries’ being added to the main GCII. For the first time we are also launching a micro-site for the Index where you can click through country profiles and other data, see www.i3connect.com/gcii for more.

The aim of this Index is to re-create the 2014 GCII to the greatest extent possible. To achieve this, the exact same datasets used in the 2014 Index were updated. However, this was not possible for one 2014 Index indicator, Revenue of Cleantech Companies.8 This has been replaced with a measurement of export and import of a number of selected cleantech-related commodities (including photosensitive/photovoltaic/LED semiconductor devices, wind-powered generating units, recycling machinery, water purification machinery, and more). Export figures show the size of the national cleantech manufacturing sector and its international competitiveness. Import figures show the demand for clean commodities, balanced with a potential lack of domestic cleantech manufacturing. We consider the combination of these a valuable substitute indicator as it similarly provides a measurement of the strength of a nation’s ‘green economy’, and is based on publicly available commodity trade data that will be accessible for all future editions of the Index.

The GCII does not reflect how well country targets are set in relation to what is expected to meet a scientific need. For example, this Index does not reflect emission reduction targets, or the amount of Research & Development required within a certain time frame, in order to stay below 1.5 degrees global warming.

For a more detailed description of each indicator, please see Appendix A.

7 Countries in this study include Armenia, China, Georgia, Hong Kong, India, Indonesia, Japan, Kazakhstan, Malaysia, Mongolia, Nepal, Pakistan, Philippines, Singapore, South Korea, Sri Lanka, Thailand, and Vietnam

8 A measure of value-added from cleantech manufacturing as a proportion of GDP and revenue of Low Carbon and Environmental Services companies as a proportion of GDP, based on 2 reports: WWF/Roland Berger Clean Energy, Living Planet, and UK Department for Business Innovation & Skills, Low Carbon and Environmental Goods and Services Report.

http://www.i3connect.com/gcii



ENERGY AND WATER INNOVATION IN SWEDENThere are two important considerations concerning Sweden that should be made before reading this report. The first concerns the impact of Recycling & Waste, and Water & Wastewater, as strong Swedish innovation sectors. The second is the venture capital and energy-centric focus of the Global Cleantech Innovation Index. It must be acknowledged that Sweden is a global leader in both of these sectors with a number of mature companies. While these sectors are covered in the use of Cleantech Group’s proprietary data, there will be a discrepancy where many of these companies matured beyond venture capital fundraising before 2013 (the lower bound of the 2017 GCII). Furthermore, as renewable energy, and energy more broadly, are a core focus of the GCII programme, it is possible that this further detracts from innovation areas where Sweden is particularly strong. However, measurements of renewable energy penetration, renewable energy jobs, and other such clean-energy related indicators provide a valuable signpost for a wider cleantech definition.9

9 2017 Global Cleantech Innovation Index, Appendix B, pg. 33

PHOTO: © OLA JENNERSTEN

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SWEDEN IN THE GCIIThe top three positions are held by Denmark, Finland and Sweden, which is not surprising based on very strong positions in the 2014 Index. All three appear to be gearing up for additional growth with increases in the numbers and amount of cleantech funds. The lowest scoring Nordic country is Norway. There are challenges for Norway but it is also the country with highest cleantech R&D budgets in 2013-15. The world would invest roughly 4 times more in cleantech R&D if it adopted the same level of cleantech R&D per GDP as Norway. The Nordic region performs strongly in 2017 Index.

An OverviewSweden moved up one place to 3rd from 4th since the 2014 GCII, supported by increases in number of investors, public cleantech R&D expenditure, IPOs, renewable energy consumption and jobs. Other key indicators retained already high scores in areas such as general innovation drivers of innovation and early-stage venture capital investment.

Sweden scores 3rd in the Index, trailing its two Nordic neighbours, Denmark and Finland. For general innovation drivers, Sweden shows a particular strength in its citizen’s perceived entrepreneurial opportunities, ranking 2nd behind Saudi Arabia. Highlights in Sweden’s cleantech-specific drivers are the high public R&D expenditure in the cleantech sphere, evidence for a cleantech-friendly policy environment, and a large number of domestic private cleantech investors, despite there also being conflicting evidence that there is a low dollar-amount of domestic cleantech funds available. Evidence for emerging cleantech in Sweden is shown by the country achieving a good score in the successful cleantech start-ups indicator, if reduced from its 2014 performance. Sweden filed 1.5 times the global average number of cleantech-related patents by GDP. Sweden’s commercialised cleantech ranks 3rd overall, with particular

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national strengths in renewable energy consumption by total primary energy, a proxy for clean energy technology deployment, and related clean energy jobs. The country also scores the top rank for the number of cleantech company IPOs in the last 3 years, when weighted by GDP. Sweden also had a healthy number of private equity deals and public companies listed in cleantech indices over last three years.

Sweden’s ranking in 2014 and 2017 by indicator

GCII Indicator 2014 2017

General Innovation Drivers 1st 1st

INSEAD Global Innovation Index 2nd 2nd

Entrepreneurial Attitudes 1st 2nd

Early Stage Entrepreneurial Activity 21st 26th

Cleantech-Specific Drivers 17th 7th

Cleantech-friendly policy 2nd 3rd

Cleantech R&D Expenditure 12th 5th

Renewable Energy Country Attractiveness for Investment Index 20th 22nd

Cleantech funds – count 20th 14th

Cleantech funds - $ total 19th 20th

Cleantech Investors – count 5th 3rd

Cleantech Industry Clusters 4th 6th

Emerging Innovation 4th 6th

Early-stage venture capital investment 8th 8th

High impact cleantech start-ups 3rd 1st

Patents in cleantech sectors 4th 4th

Commercialised Innovation 9th 3rd

Imports/Exports N/a* — 20th/14th

Renewable Energy Consumption 5th 2nd

Late-stage private equity 18th 3rd

Mergers & Acquisitions 3rd 11th

IPOs 17th 1st

Successful public cleantech companies 11th 5th

Renewable Energy Jobs 25th 1st

* Due to the difference in how this indicator is measured, a direct comparison of ranking is not comparable here. For more information, see Appendix C – Methodological Considerations

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General Innovation DriversDespite dropping a few places in two out of three indicators, Sweden once again came 1st overall in general innovation drivers in 2017. This is evidently due to other top performing countries such as USA, Canada, and Switzerland (2nd, 3rd, and 4th place in 2017) also showing lower indicator scores. Sweden’s ‘Early Stage Entrepreneurial Activity’ remains one of the lowest scoring indicators in the GCII. This is consistent with one of the main criticisms in the report that venture capital investment is not matching the strong base of innovation that Sweden has created. There is evidence in the emerging cleantech indicator pillar that early-stage venture capital for cleantech companies is relatively strong (8th), which would indicate a stronger cleantech component to the entrepreneurial activity that does exist, but overall this is a weak link in Sweden’s innovation ecosystem. Furthermore, it should be noted that Sweden is experiencing a 10% decline in early-stage entrepreneurial activity overall, falling from 8.2 to 7.58 in the Global Entrepreneurship Monitor’s calculations.10

Cleantech-Specific DriversAs half of our score for inputs to innovation, Sweden’s improvement from 17th to 7th overall in this indicator pillar is admirable. Particular improvements are cleantech R&D expenditure, which rose seven places to 5th overall. We do not however yet see the evidence of Sweden’s doubling of cleantech R&D expenditure that was committed to at COP21 in Paris. This particular indicator accounts for 25% of the indicator pillar score, and is therefore mainly responsible for the significant shift in overall pillar ranking. The complimentary improvement of both the number of cleantech funds raised and number of cleantech investors present, which rose six and 3 places to 14th and 2nd. The lack of attractiveness for new renewable energy investments and limited amounts in cleantech focused funds are areas that must be addressed for gaining a world leading score on Cleantech-Specific Drivers in the future.

Emerging CleantechIn our 2014 report on Sweden in the GCII, emerging cleantech was highlighted as a particular strength for Sweden, and this remains true in 2017. A two-position rise in high impact cleantech start-ups count is which is measured against a country’s GDP. If the score in this indicator is taken as a count rather than weighted against GDP Sweden ranks 7th, behind USA, UK, Germany, Canada, France, and Israel. While this score is measured relative to GDP to balance across the 40 countries analysed, in raw terms Sweden’s number of high impact cleantech start-ups (GCT100) was half that of 3rd place Germany, but sixteen times that of 21st place (Hungary, Singapore, South Africa, South Korea, and Japan).

10 Global Entrepreneurship Monitor, 2016


General Innovation Drivers 1st 1st

INSEAD Global Innovation Index 2nd 2nd

Entrepreneurial Attitudes 1st 2nd

Early Stage Entrepreneurial Activity 21st 26th


Cleantech-Specific Drivers 17th 7th

Cleantech-friendly policy 2nd 3rd

Cleantech R&D Expenditure 12th 5th

Renewable Energy Country Attractiveness for Investment Index

20th 22nd

Cleantech funds – count 20th 14th

Cleantech funds - $ total 19th 20th

Cleantech Investors - count 5th 3rd

Cleantech Industrial Clusters 4th 6th


Emerging Innovation 4th 6th

Early-stage venture capital investment

8th 8th

High impact cleantech startups 3rd 1st

Patents in cleantech sectors 4th 4th



Commercialised CleantechSweden’s position in the GCII has been greatly strengthened by its performance in this indicator pillar. Large improvements have been made across the range of indicators, except in the number of cleantech M&A transactions relative to GDP. However, due to the small numbers in this indicator, a small real-terms change can have a dramatic impact on ranking. Meanwhile it is also clear that Sweden’s cleantech import and export levels are modest compared to countries like Germany and China, even after weighting against GDP. Sweden’s renewable energy consumption as a percentage of primary energy use once again scores well, having come second in the 2014 GCII as well, however there has only been a 1% increase in renewable energy consumption levels. Investment in renewable energy provides a modern infrastructure upon which many cleantech innovations rely, and so improvement in this metric will contribute to cleantech commercialisation.

STRENGTHSSweden is a ‘top ecosystem creator’, according to the 2017 Global Cleantech Innovation Index. The country shows evidence for promoting a leading innovation ecosystem globally, which forms the underlying stage for a successful cleantech start-up ecosystem. Like the GCII’s first placed country (Denmark) Sweden’s cleantech innovation is highly incentivised by government policy. This includes the $220 million (SEK1.8 billion) cleantech R&D budget, which has grown from $135 million (SEK1.1 billion) in 2015, but still falls short of the Mission Innovation target of $270 million (SEK2.2 billion) by year 2020. Sweden also benefits from an increasing presence of cleantech investors who seem to be successfully raising funds, as the raw count of cleantech funds has gone up by a similar margin. Sweden stands out when it comes to renewable energy jobs and high number of recent cleantech IPOs for a small country, as shown in table 1. However, Sweden has lower than average amounts in cleantech-focused funds compared to countries like Canada, China, Finland, Australia, France, Germany, India, Norway and the UK.

Sweden remains a global leader in general innovation drivers, measured by a combination of the overall score in the Global Innovation Index11 (GII) and two metrics, entrepreneurial activity and attitude to entrepreneurship, from the Global Entrepreneurship Monitor (GEM).12 The slight improvement on these indicators from the 2012 to the 2014 edition has been somewhat reversed with the small declines in ranking for the GEM measurements, but not enough to remove Sweden from leading the group of analysed countries. Sweden remains second only to Switzerland in the GII, a reflection on the strength of the country’s institutions, human capital & research, infrastructure, market & business sophistication, and technological & creative innovation outputs. This strong foundation of innovation should catalyse the recent announcements made by the National Innovation Council, which placed clean technology solutions at the core of its strategic innovation partnership programmes. However, if the negative trend in early-stage entrepreneurial activity is not reversed there will likely be less new Swedish business resulting from this research whilst the

11 INSEAD, Cornell University, World Intellectual Property Organisation (WIPO), Global Innovation Index, 2016

12 Global Entrepreneurship Monitor, Perceived Opportunities and Entrepreneurial Activity, 2017


Commercialised Innovation 9th 3rd

Imports/Exports N/a* 20th/14th

RE Consumption 5th 2nd

Late-stage Private Equity 18th 3rd

M&A 3rd 11th

IPOs 17th= 1st

Successful public companies 11th 5th

RE Jobs** 25th ↑ 1st

* Due to the difference in how this indicator is measured, a direct comparison of ranking is not comparable here. For more information, see Appendix C – Methodological Considerations

** This is due to a separate EU regional methodology change (as IRENA data now accounts for all EU countries and no longer only as a region)

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SOURCE: WWF/CLEANTECH GROUP: THE GLOBAL CLEANTECH INNOVATION INDEX 2017

path towards commercialisation could always go through other countries and that way generate positive environmental impact.

Strong cleantech policy, and focused government institutions, mean Swedish government are strongly supportive of cleantech innovation. Sweden fulfils 6 out of the 8 policy areas that are measured to create the cleantech-friendly policy indicator in the GCII, which places them joint 5th in the 2017 Index (with Spain, UK, Italy, and Australia). The two remaining policy areas to fulfil for an even better score are those of green public procurement and direct clean energy support schemes such as feed-in tariffs or tendering, according to global data sources. However, this does not give the whole picture. Much of the venture investment and cleantech company support is directed by central, and regional, government. This includes participation in cleantech clusters and providing for incubator programmes. This also contributes to an improved ranking for Sweden’s cleantech R&D budget, which now sits in 5th position in the GCII.

Sweden registered an impressive number of cleantech investors, coming 3rd behind Israel and Denmark when the count is weighted by GDP. This strong network of professional investors goes hand in hand with the strong coordination and focus of cleantech from the public sector. However, and as is mentioned in weaknesses, these good number of investors are not being matched by a similar scale of private funds available to invest with, either by fund count or total amount, which both languish at 14th and 20th place respectively. This may be in some part responsible for the perception amongst Swedish investors that we spoke to that this result is somewhat surprising.

Sweden is seeing increasing amounts of cleantech company commercialisation and IPOs. Whereas in 2014 index not a single cleantech IPO could be named in the 2011-2013 period, Sweden now ranks first in cleantech IPOs in the 2014-2016 period, relative to GDP. Sweden rose from 9th to 3rd place overall in the commercialised cleantech indicator pillar, attributed to a combination of a strong showing of IPOs with an increasingly large amount of evidence of late-stage investment activity and high renewable energy consumption and related clean energy jobs.



Table 1 Swedish cleantech company IPOs since 2014

Company Description IPO Size Date Exchange

H&D WirelessProvider of IoT connectivity and cloud-based services for smart homes

NASpeculated Summer 2017

NASDAQ First North

Alelion BatteriesDeveloper of customized batteries, power electronics and control systems for midsize applications, electric vehicles, and renewable energy systems

$11.9M 07/21/16 NASDAQ First North

Absolicon Solar CollectorDeveloper of a parabolic trough concentrating photovoltaic/thermal hybrid solar power and heat system for rooftops

$1.568M 04/30/16AktieTorget Stock Exchange

MinestoDeveloper of commercial power production from low velocity tidal and ocean currents


PowerCellDeveloper of fuel cell systems that can run on reformate or pure hydrogen

$14M 12/18/14 NASDAQ First North

Clean MotionManufacturer of a small three-wheeled electric vehicle for dense urban environments


InsplorionDeveloper of research instruments for the characterization of nanomaterials

06/25/15 AktieTorget

Greater Thandeveloper of technology and social platforms for smarter driving

03/17/17 NASDAQ First North

Arc Aroma pureDeveloper of an energy-efficient preliminary treatment method for biogas raw materials which reduces the emission of greenhouse gases


ChromoGenics

developer of electrochromic smart glass technology based on a unique patented roll-to-roll plastic foil, enabling more scalable and cost-effective manufacturing


HeliospectraDeveloper of intelligent light systems for greenhouses that save energy


SaltX TechnologyProvider of technology which stores energy in salt crystals and converts it to heating and cooling, reducing energy consumption


Mantex Developer of equipment that permits continuous measurement of the moisture and ash concentration of biomass


myFCDeveloper of portable fuel cell chargers for mobile devices


SimrisAlgProvider of microalgae-based agribusiness consumer products for humans, animals


SolTech EnergyProducer of building integrated photovoltaic (BIPV) cells and materials, as well as crystalline silicon PV modules for standalone applications


Sea TwirlProvider of a new floating offshore wind turbine that can be placed at deeper waters.


WEAKNESSESSweden still has low amounts of cleantech venture capital investment, with only a recent uptick in the first half of 2017. There is evidence that this is due to a low number of private cleantech investment funds, as by both count and amount cleantech funds fall to 14th and 20th place. As was highlighted in the 2014 report, Sweden’s venture capital community seem to prefer other areas besides cleantech, even whilst there are some strong public players in the ecosystem such as Vinnova, Industrifonden, Energimyndigheten, and ALMI Invest. There is growing public-backed support, a gap that was highlighted in 2014 that Sweden has recently addressed with Grona Fonden,

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a new $75 million greentech fund launched in 2017, alongside a $338 million (SEK3 billion) portion of the EU structural fund budget targeting the low- carbon economy, which will be half financed by the Swedish state.13 However, galvanising private cleantech fundraising and investment is a key area for improvement highlighted in GCII, and should help to improve the decreasing ‘early-stage entrepreneurship’ metric that has, as outlined above, dropped 10% since 2014.

The Nordic countries are not currently attractive destinations for modern renewable energy investments whilst having high renewable energy penetration and jobs in the sector. In Renewable Energy jobs Denmark and Sweden take 1st and 3rd place, while Finland follows in 8th, and Norway takes 9th place. The countries share relatively high levels of renewable energy consumption and have a high number of public cleantech companies. They also have many renewable energy jobs, with Denmark and Finland taking a joint 1st place and Sweden 2nd place. The exception in this case is Norway, which only takes 21st place for the number of renewable energy jobs. However, Nordic countries’ attractiveness for modern renewable energy investments, which is a large share of global cleantech investments and innovation today, these days is relatively low compared to other countries. The high levels of renewable energy consumption and jobs stem from historic investments in older renewable energy technologies, which are often combined with larger environmental sustainability challenges. This presents a challenge to future attractiveness of Nordic countries as a destination for renewable energy investment as well as continually remaining an innovation hub in this space.14

Figure 3 EU & Israel Cleantech Venture Investment with Sweden, UK, Israel, France, Germany, Finland and Ireland Share

Low efficiency in converting cleantech innovation inputs into commer-cialised output. This indicator pillar measures early stage venture capital investment, which has been covered above, but also includes environmental patent filing and high impact start-ups (measured as the number of companies that appear in the top 300 shortlisted for the Global Cleantech 10015). These three indicators measure how effectively a country is converting innovation drivers into potential commercially

13 www.klimatsynk.se

14 Cleantech Group & WWF, 2017 Global Cleantech Innovation Index

15 For more information, see https://i3connect.com/gct100

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viable cleantech start-ups. More needs to be done to support companies through this commercialisation valley of death.

Figure 3 measures a country’s conversion of a unit of cleantech input into cleantech output. On the secondary axis, we have added the country’s overall score for inputs to innovation (the combined score of general innovation drivers and cleantech-specific drivers). Using this graph we can more accurately measure a country’s innovation conversion rate, compared to the global average.16

Figure 4 Cleantech innovation conversion rates

Figure 4 shows how good countries are at turning inputs to cleantech innovation into commercialised outputs. The grey bar is a country’s inputs score. The yellow bar describes how much of this grey bar is converted into commercialised cleantech outputs. Therefore, as you move right across the graph, countries are worse at converting cleantech inputs into outputs. When read alongside how tall the country’s grey bar is, one can understand more clearly whether a country is fulfilling its support of cleantech innovation.

From figure 4 we can highlight the main weakness facing Sweden’s cleantech innovation ecosystem. The disparity between the amount of inputs (in grey) and the rate of converting those inputs into commercial cleantech outputs (the yellow) highlight a failure to match strong inputs with the corresponding amount of outputs. Put differently, each of the six countries with higher commercialisation rates (Germany, Singapore, South Korea, Finland, Israel, and France) are creating cleantech companies more effectively, with lower input scores. Sweden is in pole position to manifest real leadership in cleantech innovation if the country continues to boost even higher inputs and manages to capture these in larger, more commercialised and mainly private sector outputs.

16 Cleantech Group, WWF, 2017 Global Cleantech Innovation Index, 2017

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Sweden shows evidence of having relatively weak cleantech commodity trade flows. While some metrics for commercialised cleantech have improved since the 2014 report, our measurement for cleantech company commercialisation remains a weakness for Sweden. In 2014, our measurement of Low Carbon Goods and Services (LCEGS) and cleantech company revenues showed that there was a failure in cleantech commercialisation. In 2017, by measuring the balance of a selection of cleantech commodity import and export17, the same is true once again. While a low import figure may indicate the presence of a strong cleantech commodity manufacturing sector, the near-equally low figure for exports indicates that cleantech commodity manufacturing is also deficient.

A good number of cleantech IPOs may not be an indicator of successful cleantech exits. While Sweden scores well in the way this metric is calculated, it may not follow that a high number of IPOs are the result of a good number of companies reaching commercial market maturity.

17 The following UN Comtrade codes were used in this metric: 847950 – Industrial robots, nes 842121 – Water filtering or purifying machinery or apparatus 850231 – Wind-powered generating 854140 – Photosensitive/photovoltaic/LED semiconductor devices 903210 – thermostats 854389 – electrical machines and apparatus. For more information, refer to: https://www.gov.uk/trade-tariff/headings

PHOTO: © OLA JENNERSTEN

https://www.gov.uk/trade-tariff/headings



BENCHMARKING AGAINST OTHER COUNTRIESIn order to place Sweden’s cleantech ecosystem against examples from other countries, it is important to further understand the support mechanisms in Sweden more clearly. This section will therefore first outline support for cleantech in Sweden before offering comparisons from other leading cleantech countries.

SWEDENSweden ranks third overall in our Index, comes second in inputs to innovation (a combination of general innovation drivers and cleantech-specific drivers), and comes third in outputs of innovation (measured by combining emerging cleantech and commercialised cleantech scores). This is supported by above-average R&D, a relatively large number of cleantech investors and cleantech organisations. However, Sweden’s score requires improvement in the ‘middle’ of the pathway to commercialised cleantech, with cleantech-specific drivers ranking 7th, and emerging cleantech ranking 6th. These lower ranked indicator pillars represent the drivers that ensure cleantech is supported through R&D, testing and demonstration, IP protection, and into a growth and financing trajectory required for a fully commercialised company.

Support for cleantech innovation exists alongside strong “pull-side” programs for more mature renewable power and energy efficiency solutions. Since 2003, the country has operated a program for green certification for electricity generated by renewable sources, with energy retailers required to make proportional purchases as part of their normal electricity supply. Real estate law and public information campaigns by the government target more energy-efficient homes, while a special five-year program encouraging reduced energy use in industry in exchange for tax relief has recently been renewed after generating 1.45 terawatt-hours (TWh) in savings per year from 2005-2009. The country also has an agreed target to reduce emissions from transport 70% by 2030, an increase of ambition in an area that was named as a weakness in our 2014 report.18 There have been several government initiatives to speed up the transition, including a law that requires larger pump stations to provide at least one alternative fuel, and tax exemptions for vehicles that emit low or no levels of CO2.19

Going forward Sweden has now decided to implement a Climate Policy Framework across political party groups that will be valid for generations to come. The Framework consists of three parts:

• A Climate Law. Prescribing among other things that governments shall work towards reaching targets set by the parliament, that each government has to present

18 Cleantech Group, Sweden in the Global Cleantech Innovation Index: An Outsider’s Perspective, 2014

19 http://www.government.se/government-policy/environment/fossil-free-transport-and-travel-the-governments-work-to-reduce-the-impact-of-transport-on-the-climate/

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an action plan for each term of office (4 years mandatory action plan across policy areas, to be presented the year after elections meaning the first climate action plan will be due in 2019), and an annual climate revision to be included in the state budget.

• Targets. Sweden should by 2045 reach zero net emissions and thereafter negative emissions. This is expressed as 85 % national reduction 2045 compared to 1990 (incl. ETS), remaining 15 % can be reached through additional measures (sinks and flexible mechanisms) in accordance to international rules. Emissions not covered by ETS should be 63% down by 2030 (of which up to 8 % by additional measures), and 75% by 2040 (up to 2 % by additional measures). In addition, the transportation sector (domestic, excluding aviation) should reduce 70% by 2030 compared to 1990. All targets expressed as “at least”.

• Climate Policy Council. Similar to the UK, an independent council will monitor and advice the government.

In addition, there is a new across political party groups agreement on power production to become 100% drawn from renewable sources no later than 2040, and 50% energy efficiency improvements by year 2030 in relation to GDP growth.

These new frameworks should give private sector security in which direction Sweden is heading in the coming decades which will also open up for mature as well as new, emerging cleantech markets.

As part of the Mission Innovation, Sweden has committed to double investment in energy research and innovation programs over five years compared to the average funding between 2012 and 2015. We have already in 2017 witnessed a 65% growth to 1.8 billion SEK in annual Energy R&D budget compared to 1.1 billion SEK in 2015. And currently ranked 5th for cleantech R&D, a doubling of the 2016 budget would still be slightly lower (relative to GDP) than the leader in this indicator: Norway. With Norway-equivalent cleantech R&D budgets (currently 0.075% of GDP) the world would invest

Enerfy is a product of the company Greater Than AB. Enerfy is an AI-based insurance solution that contributes to smarter, safer and more environmentally-friendly driving by motivating the driver with the right incentives. This solution leads to reduced claims, lower claims costs for insurance carriers, lower premiums for drivers and reduced CO2 emissions.

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roughly 4 times more in cleantech R&D (based on the 2017 Index average of 0.019% expenditure on cleantech R&D).20

The targets of this increase in cleantech R&D budget are likely to be a portfolio of grant/loan-making agencies, as well as direct venturing programs that are long-established and discussed below. A substantial share of venture funding and venture funds raised in Sweden comes from government, with the Swedish Agency for Growth Policy Analysis showing roughly $123 million (SEK1 billion) per year invested in start-up ventures across multiple programs.

A major contribution to aid companies in moving from innovation to commercialisation is the Grona Fonden, a new $75 million greentech fund launched in 2017, alongside a $338 million (SEK3 billion) portion of the EU structural fund budget targeting the low-carbon economy, which will be half financed by the Swedish state.21

The Swedish Energy Agency (SEA) and VINNOVA (the Swedish Governmental Agency for Innovation Systems) are the two agencies most active at the earliest-stage R&D, but also operate programs to support cleantech start-ups throughout commercialization. The Swedish Research Council is a third agency providing basic research support, with access to research facilities and grant-making. The agency makes SEK6.5bn in R&D-stage grants each year, with clean technologies being one of many recipient areas through the council’s natural and engineering sciences arm.

SEA, through its Innovations R&D program, makes different types of conditional loans to cleantech companies at various stages of development, from the very early to those in commercialization phases. Companies applying must not be older than six years, and the loans carry interest rates of 6% above the prevailing Riksbank reference rate. Early-stage loans have no maximum, but growth-stage loans are sized up to €1mn. The agency also contributes with technical expertise, market knowledge and active business development services. The cleantech loan portfolio currently includes around fifty companies across the following categories: buildings, chemistry, energy efficiency, forestry & paper, renewable energy, and vehicles & industry.

VINNOVA funds needs-driven R&D projects through grants. It invests roughly SEK 2bn per year in grants for basic research as well as awards for start-ups. In addition to cleantech, this money is put to work across sectors like healthcare, IT & services and manufacturing.

Formas is an entity that works to support research and innovation in Sweden, and focuses on early-stage R&D funding. The agency does not try to work with commercialisation and market induction in the same way as other organisations mentioned here, but aims to connect researchers with industry and innovation stakeholders. This can involve structuring co-financing instruments which are based on a 50% financing share from the agency and an industry partner. New national programs may open up further funding opportunities for cooperative early-stage funding between Formas and other public sector research funding agencies.

Three other public-sector entities focus primarily on the middle stages of company development – after proof of concept but only up to early growth stages. These are Industrifonden, Tillväxtverket, and Inlands Innovation:

Industrifonden is an independent foundation set up by the Swedish government in 1979 but is structured and functions as a private “evergreen” (fund profits re-invested in the fund) venture capital fund. The fund usually co-invests with other

20 OECDi Library, IEA Energy Technology RD&D Statistics, http://www.oecd-ilibrary.org/energy/data/iea-energy-technology-r-d-statistics/rd-d-budget_data-00488-en

21 www.klimatsynk.se

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agencies or private venture firms across early- and growth-stages. In addition to cleantech, the sectors covered are life sciences and industrial.

Tillväxtverket, or the Swedish Agency for Economic and Regional Growth, works to strengthen regional development and facilitate enterprise and entrepreneurship broadly, and with cleantech-specific program. It was responsible for the EU regional structural fund program from 2007 to 2012 that was primarily aimed at companies in the growth stage. It also operates Swedish Cleantech, an online business-to-business discovery platform, in partnership with the Swedish Energy Agency, Almi Invest, VINNOVA, and other stakeholders.

Inlands Innovation is a state-owned venture capital company with a capitalization of SEK 2 billion that has been active since 2010 in northern half of Sweden. They co-invest equity capital in high growth potential companies, irrespective of the sector or stage, and also make limited partner investments into other funds.

A seventh public-sector funding entity, Almi Invest, is a state-owned organization providing venture capital and loans across early and growth stages, but with a slight bend toward growth-stage investing. The fund, which always co-invests with other agencies, has no specific industry focus. Its typical investment ranges from €0.2-1mn and it never holds more than 49% of a company.

Swedish start-ups benefit from the existence of several incubator organizations with public funding in the region. Cleantech Inn Sweden, something like a national cleantech incubator, was launched as a national program in 2009 after a successful regional demonstration since 2007.

Cleantech Scandinavia, a regional incubator for the Scandinavian countries, is more of a public-private partnership and runs the Nordic Cleantech Open, an annual start-up business plan competition, among other start-up mentorship services.

There seems to be a constant interplay among the aforementioned government agencies and funds in sponsoring these incubator activities. Cleantech Inn Sweden is funded by Tillväxtverket, VINNOVA, and the regional governments of Västra Gotaland and Skåne. Similarly, Cleantech Scandinavia enjoys the support of Industrifonden, the Swedish Energy Agency, Almi Invest, and the Stockholm and Business Sweden economic development agencies, in addition to more than fifty other public- and private-sector partners.

Juha Sojanen, CEO and Founder of Ekorent electric car rental service is honoured Climate Solver by Gunilla Elsässer of WWF Sweden

Climate Solver Nordic companies of 2017: Ludvig Bellehumeur (EnergyNest AS), Georg Rute (Sympower Oy), Per Hansson (Scandinavian Water Technology AB), Stefan Alvarsson (Formconsult AB), Liselott Johansson (Greater Than AB), Sofie Allert (Swedish Algae Factory) together with WWF and Dustin

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THE UNITED KINGDOMThe UK scored well in all four areas of our Index, being the highest scoring European country outside of the Nordic region. In our analysis, the UK scored well everywhere except in evidence of commercialised cleantech. In addition to very good general innovation drivers – private finance, strong venture capital investment and a number of high impact cleantech start-ups contribute to its emerging innovation score.

The UK’s current controversy over membership of the European Union is also creating uncertainty. The Department of Energy and Climate Change (DECC) has since been subsumed into the UK Department for Business, Innovation & Skills. Chief concerns include planned investments of major private-sector participants that are likely be reconsidered, a planned doubling of electricity imports with interconnections to the French, Belgian, Norwegian, and Danish grids that might be subject to new tariffs, and security of natural gas imports without EU bargaining power.

This uncertainty also impacts more direct innovation-funding, as a key public funding mechanism available to UK cleantech start-ups is the EU’s Horizon 2020 Energy initiative. Horizon 2020 Energy, with a budget of around €6bn over the period 2014 - 2020, is the EU’s Research and Innovation grant funding Program for energy technology research, development, demonstration and removing market barriers. The 2016 round has a total budget of over €500m and will cover a range of technology areas including energy efficiency, renewable energy technologies, smart grids and smart cities.

EU Energy Focus is a free UK Government-funded service that aims to ensure that UK companies, research institutions and other organizations are well informed and have every chance of success in applying for and securing European funding for energy-related projects. The service includes one-to-one discussion of proposal ideas, review of draft proposals and applying the learning from the previous Horizon 2020 Energy Calls.

Another point of uncertainty is the recent move to privatize the UK Green Investment Bank. As of June 2015, the publicly funded bank planned to become up to 70% privatized, taking in additional new capital by selling off existing shares to the private sector and taking it off the Treasury’s balance sheet. Established in 2012, the GIB has deployed roughly £2 billion across 50 projects and reported profitability in the 2014-2015 fiscal year at £100,000, pre-tax. Supporters point to a wider capital pool and more sensible steering of investment decisions under the private market. Critics, meanwhile, claim that the move to privatize will dilute the bank’s purpose and begin to erode the UK government’s perceived commitment to decarbonization. Either way, the move is certainly influenced by a broader deficit-reduction movement afoot in government.

Otherwise, current domestic policy is rooted in the country’s 2009 Low-Carbon Transition Plan, which in turn was magnified in the 2012-2013 energy plan that sought to shut more coal plants and revive new nuclear capacity planning alongside EU policies. So-called “pull-side” policy programs and subsidy regimes for mature technologies are likely to continue focus in the areas of off-shore wind development, transport, and efficient heating. Going forward as part of the Mission Innovation, the UK is planning, over the next 5 years – seemingly contrary to the aforementioned deficit-reduction targets – to double central government spending (to £5.8bn over the 5 years) on clean energy technology research, development and demonstration projects. In 2020/21, plans call for more than $600m, complemented and enhanced by other regional investments as well as by funding for research in related areas that could also support clean energy objectives.

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Much of this planned funding is likely to be invested reviving direct grant-making programs. One such initiative is the Energy Entrepreneurs Fund, a competitive grant-funding scheme for start-ups that was started in 2012. Each of that program’s four funding rounds has disbursed fewer funds, going from £16m in 2012 to just £4.5m in early 2015. No fifth round has yet been announced.

Other programs target specific sectors, like DECC’s Heat Networks Demonstration Small Business Research Initiative (SBRI), another grant-funding competition, which made its most recent awards in May, 2015. Many such DECC-administered, sector-specific grant-funding programs were started between 2009 and 2013 and are still operating with existing grant recipients (but are closed to new applicants) in the areas of offshore wind innovation, energy (and heat) storage, marine energy, and wetland biomass to bioenergy. 2013-2014 also saw DECC-funded research into innovation funding schemes for nuclear power, but these have yet to result in any new firm policy programs despite plans communicated by industry consortia to deliver around 16 GW of new nuclear in the UK by 2030.

In 2012, DECC and Innovate UK had created a central online repository for knowledge-sharing and communication of these various funding and support opportunities, called the Low Carbon Funding Navigator. However, the tool has since been shut down, presumably due to lack of funding.

DECC is engaged in two key public-private partnerships for the operation of clean technology incubators. One is Carbon Limiting Technologies (CLT), which, in association with the European Regional Development Fund (ERDF) and The Carbon Trust, mainly steers investment for the Energy Entrepreneurs Fund mentioned above. The second is the Energy Technologies Institute (ETI), which draws on additional UK agency support from the Department of Business, Innovation & Skills (BIS), the Engineering & Physical Sciences Research Council (EPSRC), and Innovate UK (a multi-disciplinary innovation agency). ETI private-sector contributors include BP, Caterpillar, EDF, Rolls-Royce, and Shell.

In addition to its direct grant-making, its EU affiliations, and these public-private partnerships, the UK government recently funded a study comprised of what it calls Technology Innovation Needs Assessments, or TINAs. These TINAs aimed to identify and value the main innovation needs of specific low-carbon technology families to inform the prioritization of further public sector investment. The TINAs have been a collaborative effort of the Low Carbon Innovation Co-ordination Group (LCICG), the co-ordination vehicle for the UK’s major public-sector funding and delivery bodies in the area of ‘low carbon innovation’. Its core members are the now defunct DECC, the BIS, the EPSRC, ETI and Innovate UK. The study’s core findings have not yet been published.



THE UNITED STATESThe US is placed fifth in the 2017 Index with a very high emerging cleantech innovation profile. However, for comparison, the US volume of cleantech patents, on a GDP adjusted basis, is 20% less than Sweden’s, based on the most recently available figures from 2013. However, the US has 4x as much venture investment relative to GDP, based on 2016 figures:

While its future is uncertain, the Department of Energy’s (DOE) ARPA-E program has played in critical role in recent years with documented success. Since 2010 ARPA-E, through 30 programs, has invested approximately USD$1.3bn in 475 projects. 45 projects have gone on to attract an almost equal amount, USD$1.25bn, of follow on private investment. Additionally, 36 projects formed new companies and 60 other projects have collaborated with other government agencies for further development.

In June 2015 the White House announced a series of executive actions to encourage private sector investment in clean energy and innovation. One of the coordinating efforts is the launch of the DOE Clean Energy Investment Centre to make information about energy and climate programs at the Department and other government agencies accessible and more understandable to the public. The Treasury Department planned to issue guidance on impact investing and facilitate investments by charitable foundations in clean energy technologies and other potentially mission-aligned sectors. The U.S. Small Business Administration planned to improve financing options for private investment funds seeking long-term capital, including early-stage investors in capital-intensive clean energy technologies.

Along with the announcement of these executive actions, several investor collaborations announced a combined commitment of over USD $4bn to finance clean energy innovation and climate change solutions. These included over $1bn from University of California, the New Zealand Superannuation Fund, Alaska Permanent Fund, and TIAA-CREF. Another collaboration includes over 250 foundations and family offices under the umbrella of the CREO Syndicate. Numerous other foundations and family offices also committed over USD $500mn to impact investing in tandem with the White House announcements.

Going forward as part of the Mission Innovation, the 2016 budget proposal sought to increase ARPA-E funding by 20% in 2017 and was set to grow to USD $1bn by 2021. A new fund, ARPA-E Trust is proposed to support development of larger-scale ‘investment-ready’ outcomes starting with USD $150mn. Additionally, ARPA-E announced availability of up to $90mn for three new programs: one to develop new technologies that decrease energy consumption of future vehicles using connectivity and automation; another to improve crop breeding for root and soil function to allow for greater carbon storage in plants and a third creating innovative components for next generation electrochemical devices. While these developments are currently under threat from the current US administration, they serve as evidence of where a cleantech-promoting government institution had planned to arrange grant funding, and therefore serves as a useful touchpoint.

Dollars of Venture Investment per Thousand USD of GDP

$4,0

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Research into the patchwork of state-level programs driving innovation in the US would be worthwhile but is outside the scope of this report. The interplay between federal tax credits for renewable installations and state-level incentives have certainly provided a strong “pull,” for instance, but the difficulty of navigating fifty different state-level policy programs for any given technology is often criticized as an impediment to innovation.

FRANCEFrance is very different from Sweden when it comes to the inputs measured in the 2017 Index, as it falls below the mean for general innovation drivers. This is in large part due to a lack of governmental support to the French entrepreneurial community/culture. However, the cleantech and emerging innovation drivers are quite high due strong public R&D and attractive infrastructure for renewables as well as abundant cleantech funds. These funds frequently receive matching funds via government participation. France is one of the countries that have most consistently improved over the years of doing the Global Cleantech Innovation Index France has moved from 19th (2012) to 15th (2014) and to 13th (2017). And the indication of the new Macron-lead Government is to make cleantech a very central part of future plans.

An underlying component to French cleantech is the Energy Transition for Green Growth Bill enacted in August 2015. Reducing GHG emissions by 40%, cutting final energy consumption in half, reducing fossil fuel consumption by 30%, increasing renewable energy to 40%, and cutting landfill waste in half are all long term incentives for cleantech entrepreneurs.

Further legislative innovation arrived with Article 173-VI of France’s Law on Energy Transition for Green Growth (LTECV). This new banking regulation commits financial portfolios to staying below 2 degrees of global warming. This law will drive large scale investments into cleantech in both foreign and domestic markets.22

Central to French policy is the PIA (Programme d’Investissements d’Avenir – Investments for the Future Program) founded in 2009 and covering 2010 – 2020. The PIA’s initial budget was €35bn; its second phase was approved in 2013 with additional funding of €12bn, so that the program’s total budget now reaches €47bn. The three areas of focus are Labs, Large Campuses and Creation of New organizations.

One of the programs under the PIA is “Bpifrance”, a subsidiary of the French state and the Caisse des Dépôts and the major French government industrial investment bank. The program finances businesses from the seed phase to IPO through loans, guarantees and equity investments at each key step of their development to tackle 3 goals: contributing to SME’s growth, preparing tomorrow’s competitiveness, contributing to the development of a positive entrepreneurial ecosystem. This includes repayable advances, subsidies and soft loans for innovation to provide financing to innovative technology based business projects. Two of these activities include €500mn in the Green Soft loans and €150mn in the Environmental Technologies Fund. This fund invests €1-10mn in innovative SMEs, mainly French-based, in the following areas: renewable carbon-free energies and green chemistry, smart grids, the circular economy and vehicles of the future.

The PIA includes the support of the Competitiveness Clusters, “Les Poles de Competitivite” with a key objective of stepping up companies’ innovation efforts and supporting mainly industrial activities with a large technological component. This includes access to financing, international development, the forecasting of companies’

22 http://www.frenchsif.org/isr-esg/wp-content/uploads/Understanding_article173-French_SIF_Handbook.pdf



needs in terms of skills and individual assistance with the development of SMEs, including advice and tutoring.

Another program under the PIA are the Sociétés d’Accélération du Transfert de Technologie (SATTs) are technology transfer offices, with a total budget of €885m. The 14 SATT’s invest in projects aimed at the validation, maturation and transfer of public R&D, and provide commercialization services. One notable achievement is the creation of over 60 start-ups through these activities. There are 71 of these clusters throughout France.

Going forward as part of the Mission Innovation, France has committed to doubling its public investments in research and development for energy efficiency and renewable energies over five years, compared to the average investment level during the 2012 and 2015 period. Investments will focus on renewable energy and energy storage, carbon capture and storage, and innovations aiming at improving energy efficiency (including in industry, transport, circular economy, and smart grids).

The programs appear to be having the desired impact in attracting private investment, as France became the most active country in the EU for companies raising venture funding in 2015 (see figure 5). French corporates, along with those in the Nordic countries, are also active participants in a wide range of open innovation activities as well as direct investments. In parallel, French companies still in relatively early stage have been turning to the Euronext, and specifically its SME-targeted subsidiary Enternext, to raise funds. However, it would seem that this option is currently only available to companies from France, Belgium, Portugal, and Netherlands. In 2014 31 new companies listed on Euronext markets, raising a total of $868 million. SMEs also turned to the financial markets for:

• secondary capital raisings, doubling in 2014 (from $3.2 million to $6.3 million);

• secondary bond issues, amounting to $3.2 billion in 2014.23

Figure 5 European country’s share of cleantech investment

23 Euronext statistics, https://www.euronext.com/en/listings/sme

$2,500

$2,000

$1,500

$1,000

$500

$02010 2011 2012 2013 2014 2015 2016 2017 YTD

% Sweden % UK % Israel % France % Germanytotal $ amount*Excludes outlier deals above $350M

Number of deals35%

30%

25%

20%

15%

10%

5%

0%

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As part of its drive to meet its Paris Accord commitments, France issued its first sovereign green bond earlier this year. This issuance was one of the largest to date, and counts itself as one of the most successful in the fast-growing green bond market, The ‘Green OAT’ facilitated borrowing of over $8 billion to fund the energy transition.

We’ve also observed regional programs having some success in France. One early-stage program we’d point to as a possible model for sector-specific innovation is that of the Axel-One chemicals and materials cluster in France. The government had successfully turned brownfield sites into a “chemicals valley” in the Lyon region, and specifically approached one of the chemical majors that calls the valley home – Solvay – to encourage the creation of the Axel-One program in 2012.

Solvay, with government funding, set up the facilities at its site with the mandate to create collaborative projects among researchers, start-ups, industry incumbents, and other stake-holders. The Axel-One program is not-for-profit and Solvay insists that it is not interested in the intellectual property it might yield. Its interest may be both in the brand-value of being associated with such a program and the natural inclination of companies coming out of that program to partner with Solvay.

Each collaborative group can decide how to deal with the resulting intellectual property. Early-stage innovators can join for up to two years with no commitment to a collaborative project – just to use the facilities, for instance – but with the ultimate guidance that they must eventually join or start a collaborative project.

In 2016, Axel-One boasts a 7,000 square-meter facility, 12 collaborative projects and nine start-ups (occupying 25% of its surface area), 11 shared technology platforms and hosts 140 people.

Within the French cleantech ecosystem there is a call for additional support connected to COP21. Idinvest/Electranova Capital, Environmental Technologies Fund and Demeter Partners had the following recommendations to accelerate energy transformation:

• Channel additional private capital toward growth capital fund with “Green” or “Energy and Ecological Transition” certification by: a) providing tax breaks to individual investors and b) support corporates through R&D tax credits as well as direct investments and make unrealized losses tax deductible

• Encourage industrial players and public authorities to provide support through public procurement requirements, pre-commercial procurement process, and mandatory reporting on efforts related to climate change



RECOMMENDATIONS

In order for Sweden to further improve its GCII diamond shape, the country can draw from many of the interesting existing examples programmes around the world for cleantech funding. Policy-makers entrepreneurs and partners must cooperate to effectively diffuse any barriers to growth that can make our footprint shrink.

Sweden should continue towards doubling of cleantech R&D expenditure that was committed to at COP21 in Paris. There is an opportunity to use the hosting of Mission Innovation in Sweden in May 2018 to show proof that this doubling is coming, and to renew and follow-up on other commitments. The fulfilment of these commitments would encourage the billions in private capital that has been committed by Breakthrough Energy Ventures, but not yet directed due to a lack of matching public-sector funding. Matching this private commitment in public funding would increase the commercialisation of cleantech (in Sweden and elsewhere).

With the aim of sustaining the increased commercialisation rates we have seen in cleantech companies in the 2017 Index, we propose the following recommendations.

Cleantech is often capital-heavy areas with a long development and commercialization period that is difficult to attract venture capital. Therefore, Sweden should strengthen its efforts at encouraging private early-stage investment in cleantech companies. This should be carried out by providing incentives to corporations and other potential limited partners and investors to contribute to Swedish cleantech venture capital funds. As is in part true for the Grona Fonden, and the French example given before, government funds could be provided as matching funds through private venture funds to act as additional capital, while leaving the allocation of private capital to the established and experienced network of private investors that already exists within Sweden as well as larger public asset managers like the AP funds. Furthermore, public bodies should explore avenues to effectively transfer companies from early-stage public financing to growth stage private financing, to encourage fundraising at higher valuations for both the company’s and investor’s benefit. One such pathway to greater public and private coordination in financing and start-up support can be drawn from the example of the Energy Technologies Institute (ETI), which draws on UK government agency support from the Department of Business, Innovation & Skills (BIS), the Engineering & Physical Sciences Research Council (EPSRC), and Innovate UK (a multi-disciplinary innovation agency). ETI private-sector contributors include BP, Caterpillar, EDF, Rolls-Royce, and Shell.

GeneralInnovation

Drivers



Commer-cialised

CleantechInnovation

AverageSweden

SwedenGeneralInnovation

Drivers



Commer-cialised

CleantechInnovation

AverageSweden

SwedenGeneralDrivers

CleantechDrivers

Emerging Innovation

Commer-cialised

Innovation

MeanSweden

Sweden

2014 2017

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Sweden must also work on ever increasing demand for cleantech by continually working on science based target and action on climate change, water scarcity and other pressing issues from country laws and regulation, regions & cities, financial actors and corporate sector.

Work on improving Early Stage Entrepreneurial Activity, R&D doubling, increasing the presence and amount of cleantech funds, improving the attractiveness of renewable energy infrastructure finance, are all pathways to improving inputs to innovation that can be converted into commercialised cleantech. Improving conversion rates can be enabled through strategic partnerships with private finance, corporate venture and large, fast growing cleantech markets are ways of sending Sweden into GCII pole position.

Particular attention should be paid to the various French innovations in both legislation and green bond issuance. According to WWF and PWC research, there are roughly $45 billion (SEK370 billion) of Swedish capital (in insurance companies, banks, pension funds) invested in fossil fuel energy assets around the world. If these assets were to shift towards solutions rather than the problem, a great deal of progress would be made.24

As pointed out in weaknesses, Sweden sits on a very strong basis for innovation, and is starting to show signs of successful commercialisation, but is neglecting key areas in the middle of the cleantech start-up ‘ideation foundation early-stage

acceleration growth stage exit’ pathway. In other words, Sweden is failing to adequately fund and bridge the ‘valley of death’ where start-ups accelerate growth into fully commercialised companies. Further improvement to bridging the ‘valley of death’ between cleantech-specific drivers and emerging cleantech indicators is required. This may include promoting project funding, beyond company funding. Deployment is a major hurdle for cleantech companies, but in a country that comes 4th for Technological Readiness,25 and 2nd in renewable energy consumption,26 3rd in the Global Connectivity Index measuring the digital economy transformation and having just passed a Climate Law that will last through generations Sweden is a prime location for trialling the next generation of clean technologies.

24 WWF & PWC, Own It – Swedish investments in the global energy sector and how capital affects climate change, http://www.wwf.se/source.php/1584533/WWF-Own_it_141114.pdf

25 World Economic Forum, Global Competitiveness Index, 2016, http://reports.weforum.org/global-competitiveness-index/country-profiles/#economy=SWE

26 As a percentage of primary energy consumption – Cleantech Group, WWF, 2017 Global Cleantech Innovation Index, 2017

http://www.wwf.se/source.php/1584533/WWF-Own_it_141114.pdf

http://www.wwf.se/source.php/1584533/WWF-Own_it_141114.pdf

http://reports.weforum.org/global-competitiveness-index/country-profiles/#economy=SWE

http://reports.weforum.org/global-competitiveness-index/country-profiles/#economy=SWE



RECOMMENDATIONS FOR FUTURE RESEARCH:• Given the relative weakness of early-stage venture capital in

Sweden, and the low count and amount of private cleantech funds, what is the ratio and foreign and domestic cleantech investment?

• Within the population of foreign- and domestic-investors, what is the role, and potential, of corporate-strategic investors?

• Further interrogation of the stages of equity financing, from early- to late-stage equity financing, would give greater focus on the weak point in ‘valley of death’ commercialisation and deployment financing.

• The venture-exit data presented is a useful barometer for company lifecycle progression, but there is a need to better understand successful versus unsuccessful exits and what that means for growth-stage companies in Sweden compared with abroad.

• The issue of commercialisation and market introduction of environmental innovations and research is interesting as the gap between these, also known as the valley of death, can be a research question in itself. This was raised in a recent climate workshop, phrased as the need for more knowledge around how Sweden can use business models and the financial system to bring about change.



APPENDIX A – INDICATORS AND SOURCES

General innovation driversIndicator Source Date Definition Weighting

General innovation inputs INSEAD Global Innovation Index 2016Insitutions, human capital, infrastructure, market sophistication and business sophistication facilitating innovation

50%

Entrepreneurial culture Global Entrepreneurship Monitor 2016Positive attitudes towards entrepreurship and early stage entrepreneurial activity

50%

Cleantech-specific innovation driversIndicator Source Date Definition

Cleantech-friendly government policies

REN21 – Renewables 2016 Global Status Report; World Bank Group – State and trends of carbon pricing 2016; OECD & Bloomberg Philantrophies – Green bonds, Policy perspective 2015

2015 - 2016

Selected government policies supporting clean technology including tax incentives, feed-in tariffs, green bonds, renewable energy mandates and others

25%

Government R&D expenditure in cleantech sectors

OECD-IEA database; UN GERD database

2013 - 2015Total budget for cleantech R&D as a proportion of GDP (PPP)

25%

Access to private finance for cleantech start-ups

Cleantech Group data 2014 - 2016Number of cleantech investors and cleantech-focused funds recently raised weighted by GDP

25%

Country-attractiveness of Renewable Energy Infrastructure

Ernst & Young Renewable Energy Country Attractiveness Index

2015

Index score covering national renewable energy markets, renewable energy infrastructures and their suitability for wind, solar, biomass and other renewable energy technologies

20%

Cleantech cluster programs & initiatives

Cleantech Group research 2016Number of industry associations, physical clusters and economic initiatives supporting the cleantech industry as a proportion of GDP (PPP)

5%

Evidence of emerging cleantech InnovationIndicator Source Date Definition

Patents in cleantech sectors

OECD database 2013Environment-related technology patents covered by the Worldwide Patent Statistical Database (PATSTAT) weighted by GDP (PPP)

45%

Early-stage private investment

Cleantech Group data 2014 - 2016Amount of venture capital invested in cleantech companies as a proportion of GDP (PPP)

45%

High impact cleantech start-ups

Cleantech Group data 2014 - 2016Number of companies included in the Global Cleantech 300 weighted by GDP (PPP)

10%

Evidence of commericalised cleantech innovationIndicator Source Date Definition

Trade of cleantech commodities UN Comtrade 2015

Trade value of national export (25% weighting) and import (25% weighting) of cleantech-related commodities, weighted by GDP (PPP)

50%

Renewable energy consumption

BP Statistical Review of World Energy 2016

2016Total renewable energy consumption as % of Primary Energy Consumption

20%

Late-stage private investment and exits Cleantech Group data 2014 - 2016

Number of cleantech private equity deals M&As, and IPOs weighted by GDP (PPP)

15%

Successful public cleantech companies

Cleantech Group, FTSE, Ardour and WilderHill indices of public cleantech companies

2017Number of publically listed cleantech focused corporates weighted by GDP (PPP)

10%

Renewable Energy Jobs IRENA Renewable Energy and Jobs Annual Review

2016Number of direct and indirect employees related to renewables as % of total labor force

5%

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APPENDIX B - FRAMEWORK

Inputs to Innovation

A: General Innovation Drivers

• General innovation inputs

• Entrepreneurial culture

B: Cleantech- Specific Innovation Drivers

• Government policies

• Public R&D spending

• Access to private finance

• Infrastructure for renewables

• Cleantech industry organsiations

Outputs of Innovation

C: Evidence of Emerging Cleantech Innovation

• Early-stage private investment

• High impact companies

• Environmental patents

D: Evidence of Commercialised Cleantech Innovation

• Cleantech Imports and Exports

• Renewable energy consumption

• Late-stage investment and exits

• Listed cleantech companies

• Employees

SourcesINSEAD, Cornell University, World Intellectual Property Organisation (WIPO), Global Innovation Index, 2016

Global Entrepreneurship Research Association (GERA), Global Entrepreneurship Monitor, 2016

IEA, Energy R&D database, 2015

IEA, Tracking Clean Energy Progress, 2015

UN, Gross National Expenditure on R&D 2013-14

REN-21, Renewables 2016 Global Status Report

World Bank, State and Trends of Carbon Pricing, 2016

OECD & Bloomberg Philantrophies, Green Bonds, Policy Perspective, 2015

Ernst & Young, Renewable Energy Country Attractiveness Index, 2016

Cleantech Group, Global Cleantech 100, 2014 - 2016

OECD, Patent Cooperation Treaty database, 2013

UN, Comtrade Import/Export data, 2014-2016

BP, Statistical Review of World Energy, 2016

IRENA, Renewable Energy and Jobs Annual Review, 2016

Cleantech Group, FTSE, Ardour and WilderHill indices of publicly traded cleantech companies, 2016

Cleantech Group, Venture Capital Investment, i3 data, 2014 - 2016

World Bank indicators, 2016



APPENDIX C – METHODOLOGICAL CONSIDERATIONSWe would like to acknowledge that despite the robust methodology of this Index, like in any study, there are parts of the framework that could be improved. We therefore would like to focus on the following methodological considerations and potential improvements that we encountered during the data gathering and planning stages of this Index, which were limited in their implementation either due to a lack of data availability or due to the wish to maintain methodological consistency between this and the 2014 edition of the Global Cleantech Innovation Index.

Renewable Energy FocusA brief look through our indicators and sources could prescribe this Index with too strong a renewable energy, and energy in general, bias for this to be a true measure of ‘cleantech’ innovation. However, and as shall be described below, there are multiple sectors of cleantech accounted for in the data we use, especially with the provision of Cleantech Group data.

It is also relevant to mention that measurements of renewable energy penetration, renewable energy jobs, and other such clean-energy related indicators provide a valuable signpost for a wider cleantech definition.

Private & Public FinanceTo form a full picture of expenditure into the research and development of a country’s cleantech innovation, the inclusion of private R&D in addition to public R&D is desirable, but it could not be undertaken in this Index due to lack of available data related specifically to cleantech industries. Furthermore, the measurement of ‘access to private finance’ neglects access to capital via commercial banks. We could not find a comprehensive dataset covering commercial loan access across the required geographies.

Green BondsIn researching this report, and the supplements to this edition of the GCII, it is apparent that support for cleantech is increasingly sophisticated. The range of policy measures, as well as support networks and organisations, has increased across the board. In this edition, this has led to our inclusion of green bonds issuance as a part of our indication of inputs to innovation. Green bond issuance has soared in recent years, with sales typically being over-subscribed.

Figure 15 Green bond issuance by sector and share, 2016

Various eligible projects 20 %

Climate change adaptation 10 %

Clean water and/or drinking water 7 %

Clean transportation 18 %

Biodeiversity conservation 4 % Sustainable land use 2 %

Sustainable waste management 6 %

Energy efficiency 23 %

Renewable Energy 28 %

37



Geographic targeting of investment fundsVenture capital flows are increasingly geographically liquid. Specifying an amount of venture capital available within one country is therefore inexact. Our methodology assesses the number and dollar-value of funds with a specific country focus. Where more than one specific country is being targeted, there may be instances of double counting as each country was prescribed the full amount of the fund in question. This value is balanced by the venture capital investment figures used in other Index indicators.

Cleantech Clusters & InitiativesRecognising the rise of incubator and accelerator programmes as a means of cleantech start-up support, we see the potential to widen the definition of this indicator to include these categories, or even act as a substitute to the more traditional industrial clusters covered in the current definition. Cleantech Group is focused on tracking global cleantech-related incubators and accelerators, which will allow the formation of a comprehensive dataset for use in future editions of the Index. WWF strategy reviews also recognises the increasingly strategic role that incubator and accelerator programmes play in nurturing cleantech innovation world-wide. This year’s Index, however, draws only on cleantech cluster programmes and initiatives to maintain methodological consistency to the 2014 Index.

Cleantech CommoditiesThis indicator serves as a substitute for ‘revenues of cleantech companies’ used in previous editions of the Index, as the collection of this dataset was not continued by third party organisations. The new indicator measures the country’s activity in the export and import of a number of selected cleantech-related commodities. This gives an indication of the national cleantech manufacturing sector and its international competitiveness (through export measurements), and the demand for clean commodities to be adopted in its national green economy balanced with a potential lack of cleantech manufacturing (through import measurements). We consider the combination of these a valuable substitute indicator as it similarly provides a measurement of the strength of a nation’s ‘green economy’, and is based on publicly available commodity trade data that will be accessible for all future editions of the Index.

Renewable Energy JobsA measure of renewable energy jobs serves as an approxomation for the general level of employment across the cleantech sector. However, there are potential improvements to this indicator. For example, IRENA figures show there are 769,000 direct and indirect jobs related to renewables in the USA. If this is expanded to include all jobs in energy efficiency, smart grid, energy storage, electric power generation, renewable fuels production, and electric, hybrid, and hydrogen-based vehicles, we may be looking at 3.3 million jobs according to the US Department of Energy.27

27 US Department of Energy, Fact Sheet: Jobs in Renewable Energy and Energy Efficiency, 2017



GLOSSARY

BIS – Department of Business, Innovation & Skills (United Kingdom)

CLT – Carbon Limiting Technologies

COP21 – 21st Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change

DECC – Department of Energy and Climate Change (United Kingdom)

DOE – Department of Energy (United States)

EPSRC – Engineering & Physical Sciences Research Council

ERDF – European Regional Development Fund

ETI – Energy Technologies Institute

EU – European Union

GCII – Global Cleantech Innovation Index

GCT100 – Global Cleantech 100

GDP – Gross domestic product

GEM – Global Entrepreneurship Monitor

GIB – Green Investment Bank (United Kingdom)

GII – Global Innovation Index

LCEGS – Low Carbon Goods and Services

LCICG – Low Carbon Innovation Co-ordination Group

LTECV – Law on Energy Transition for Green Growth (France).

PIA – Programme d’Investissements d’Avenir (France)

SATT – Sociétés d’Accélération du Transfert de Technologie

SEA – Swedish Energy Agency

TINA – Technology Innovation Needs Assessments

VINNOVA – Swedish Governmental Agency for Innovation Systems

WWF – Wold Wide Fund for Nature

1 Due to the difference in how this indicator is measured, a direct comparison of ranking is not comparable here. For more information, see Appendix C – Methodological Considerations

2 Due to the difference in how this indicator is measured, a direct comparison of ranking is not comparable here. For more information, see Appendix C – Methodological Considerations

3 This is due to a separate EU regional methodology change (as IRENA data now accounts for all EU countries and no longer only as a region)

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The Global Cleantech Innovation Index 2017

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This report investigates the global state of cleantech innovation in entrepreneurial start-up companies. We are currently faced with a range of climate, energy and economic challenges. Technology start-ups provide one of the most important vehicles for developing and commercializing innovation to meet these challenges, while generating value for investors. This report reasons as to where these innovative cleantech companies will spring-up over the next decade, and shows which countries are falling ahead and below the curve for cleantech innovation.

The index was first launched in 2012 and reiterated 2014. This is the third edition.

www.panda.org/climateandenergy www.cleantech.com

WHICH COUNTRIES LOOK SET TO PRODUCE THE NEXT GENERATION OF START-UPS?

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