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    Making sustainability stick

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    Australian researchers and entrepreneurs have no shortage of ideas when it comes to the emerging cleantech industry. But, as Rowan Gilmore explains, these innovations will go nowhere unless government and industry start to work together.

    When talented entrepreneurs walk into the AIC’s offices to see how we might help them take their inventions to market, it’s sometimes hard to keep up a brave face. Especially when they come with models of wind turbines, wave generators or other ideas to create renewable energy. Their chances are slim.

    It’s a shame, because the sustainability sector might not only help solve global environmental challenges, it could be one of the best sources of future competitiveness Australia has.

    The global market for environmental goods and services was recently valued at over US$548 billion and is forecast to grow to US$688 billion by 2010. I stifle a smile as these entrepreneurs tell me: “One percent of that is still a large number!”

    The fact is, the so-called ‘cleantech’ sector is not unlike the biotech industry in the early 1980s: a number of undercapitalised, single product companies operating in an isolated context. One venture capitalist familiar with the sector has used the label ‘cottage industry’ to characterise it.

    But while the development of the biotech industry continues to be stymied by its very long supply chains and the lack of a major global pharmaceutical company headquartered in Australia, the cleantech sector in Australia arguably has a greater opportunity. Where they exist, supply chains are shorter, and no multinational companies demonstrably dominate the sector. In addition, there are much stronger and more urgent government responses globally to the immediate challenge, as well as a growing recognition of the role of government procurement in building a new industry. An emissions trading scheme will also provide pricing and market certainty, thereby reducing development risk. The sector should also, in time, be able to look to the mining and infrastructure industries as sizable immediate clients.

    Shi Zheng-Rong did it. A PhD. student at the University of NSW in the 1990s, he used his skills and research there to launch Suntech Power, a company that produces solar panels and that is now the size of Qantas. Problem was, he had to do it in China.

    Just in case you think we wouldn’t let such an opportunity slip through in today’s more enlightened environment, the AIC was unable to find an industry partner last year to work with the University of Sydney on a million-dollar linkage grant into biomimetic photovoltaic systems.
    This next generation solar technology mimics nature and generates electricity with a process similar to artificial photosynthesis. Highly useful in overcast conditions and tropical climates, or in smoggy cities. The grant lapsed.

    The majority of corporate purchasers of environmental products still view environmental issues as a liability and therefore seek the lowest cost solution to solve the problem that is constraining their main business. Without demonising the industry as a whole, there are mines where environmental outcomes are a constraint in optimising output and they therefore need to resolve these production constraints as quickly as possible for the lowest cost. Not a positive environment for the adoption of innovation.

    Our entrepreneurs could follow the big money. But the rush to build new dams, recycle water or desalinate water is no different. These projects are dominated by large civil infrastructure builds requiring the movement of large volumes of earth and the pouring of massive amounts of concrete because the conventional wisdom is that water processing is batch based.

    The race against time, election commitments and government restraints on risk do not create an environment for innovation, where smaller systems and distributed processing might provide better long-term outcomes.

    The missing prelude to such sales and procurement are demonstration projects. That feasibility stage, or commercialisation chasm, can only be bridged by collaborative partnerships between research, industry and government.

    No single entity can do it alone. Collaborations are needed to share the risk and to build scale. A good example is the $30 million project to build a ten megawatt solar thermal power station in Cloncurry using hot rocks, where Lloyd Energy Systems is working in a consortium with SMEC and Ergon, with significant funding from the Queensland Government. Eight thousand mirrors will reflect sunlight onto graphite blocks, and water will be pumped through them to generate steam that will operate a conventional steam turbine electricity generator.

    The US defence industry was built on government procurement creating clusters of small suppliers around the major systems integrators, resulting in new supply chains to beat a pressing challenge – the Cold War. A very different war is going on now, but our response needs to be similar.

    Dr Rowan Gilmore is CEO of the Australian Institute for Commercialisation, which helps businesses, research organisations and governments increase the success rate of commercialising Australian innovation.