Sacramento Region to Focus on Growing Clean Energy

A concentrated effort to support the Sacramento region's many green tech entrepreneurs could lead to Silicon Valley-style success in clean energy technology (CET), says a new report from the McClellan Technology Incubator and the Sacramento Area Regional Technology Alliance (SARTA).

California is already a leader in clean energy, according to the report. For example, a study conducted for the California Air Resources Board revealed that the state supports 180,000 jobs in environmental businesses -- 22,000 of which are in clean and renewable energy. Clean energy also is a growing sector with total worldwide market sales projected to grow by $85 billion over 10 years, and investment in global clean energy has doubled in the past four years, the report indicates.

While the Sacramento area has some of the essential "ingredients," it is lacking in others, the report states. The region leads the country in CET research and regulatory knowledge; however, it is lacking a culture of industry-university partnerships and streamlined access to resources of the holders of intellectual capital. Also, while the region has a number of potential CET start-up employees and interns, it is missing a bench of mentors and coaches familiar with CET and a pool of talented CET entrepreneurs.

The report also notes that although substantial government R&D funding is available, support for capital and pre-seed CET ventures is needed. Other problems identified are significant gaps in funding the process locally and the long process of moving technology from invention to innovation. The report suggests that business incubation can have a significant impact if implemented correctly. The authors point to Georgia Tech's Advanced Technology Development Center, one of the sponsors of SSTI's annual conference next week, as a prime example. Since ATDC's inception in 1980, 100 new client firms are generating more than $1.75 billion in revenue and adding 4,900 jobs to the local economy.

A total of 30 clean energy companies at varying stages are identified in the Sacramento region and the report predicts a growth of 52,000 to 114,000 in new jobs over the next decade. Recommendations to make the region a green powerhouse include:

• Identify a person to put in charge as a champion;
• Establish a rallying point to attract attention, support and enthusiasm;
• Create a "beehive of activity" and an extensive network;
• Expand funding for incubator services to promising government R&D awardees; and
• Create a clean-energy focused incubator service organization within SARTA

To spark venture capital interest in the area, the report suggests a $50,000 business plan competition open to all clean energy businesses in the region. Another suggestion to provide a substantial boost to establishing the region is implementing a Renewable Resource Research Park. The Park would create the potential for high-paying jobs and multiple spin-offs, in addition to providing a connection to major university research centers, the report states.

The year-long study was conducted by leaders in technology investing in the area and funded by the California Energy Commission and the Sacramento Municipal Utility District. The report, Clean Energy in the Capitol Corridor: Making the Region a Green Powerhouse, is available from SARTA at: http://www.sarta.org

Links to this paper and more than 1,000 additional TBED-related research reports, strategic plans and other papers can be found at the Tech-based Economic Development (TBED) Resource Center, jointly developed by the Technology Administration and SSTI, at http://www.tbedresourcecenter.org/.