First posted on Xconomy, July 14, 2011. Written by Tom Ranken.
There has been endless hype about the so-called clean economy—from both ends of the spectrum. It has been called both “a compelling aspiration and an enigma” and it has been difficult to assess. Discussion has frequently been short on facts and long on anecdotes, speculation, assertion, and partisanship. This is due, in no small part, to the fact that cleantech can be employed as a key and visible function in some companies and as a less-visible adjunct within others.
To help shed light on this problem, Brookings released today a highly-anticipated study entitled “Sizing the Clean Economy: A National and Regional Green Jobs Assessment.” It is an endeavor to create a definition of the clean economy and quantify its significance.
Brookings, working with Battelle, start by proposing a definition: The clean economy produces goods and services with an environmental benefit.
The findings suggest that there is real significance behind the hype.
- 2.7 million Americans are employed in clean economy jobs spread over a diverse group of industries. The report notes that the sector is larger nationally than the fossil fuels and the biotech sectors. It is about 60% of the IT-producing sector.
- Newer cleantech segments (such as wind, solar, and smart grid) added jobs at a ‘torrid pace’ between 2003 and 2010, but more established segments (housing and building) lagged national employment growth (largely due to layoffs during 2007-08). Overall, total job growth during the period was 3.4% compared to the national average of 4.2%.
- The clean economy is manufacturing intensive: 25% of jobs compared to 9% in the broader economy.
- The clean economy is export intensive: On average, twice of much value is exported from cleantech jobs than the national average.
- There are more opportunities and better pay for low-and middle-skilled workers. Median wages are 13% higher.
- Most cleantech jobs are concentrated in metropolitan areas in varied configurations.
- Strong industry clusters boost metropolitan areas growth performance in the clean economy.
The status of the Seattle metropolitan region suggests that the clean economy in our region has both significance and potential.
- According to Brookings, there are 31,340 clean economy jobs in the Seattle area and we rank 13th among the 100 largest metro areas.
- Clean economy jobs make up 1.8% of the jobs in the region (ranking 46th).
- Between 2003 and 2010, the region added 9,580 clean jobs (ranking 13th).
- Between 2003 and 2010, clean jobs grew 5.3% annually (ranking 28th).
- Each Seattle area cleantech job averages $10,389 in exports (ranking 69th).
- The average annual wage in the clean economy is $49,592 (slightly higher than the $48,592 for all jobs in the area).
This suggests what many of us have suspected. Cleantech in our region is significant and has the potential to become more important. We know that we have numerous cluster assets (several large leadership companies, popular support, and expertise in important fields such as building sciences, smart grid, and biofuels). But these findings also suggest that to create the jobs, companies, goods, and services that will benefit our region, more will need to be accomplished—particularly in light of the competition for this sector around the globe.
To build national clean economy leadership, “it is clear,” notes Brookings, “that the private sector will play the lead role, but governments have a role, too.” Brookings notes with disappointment the lack of a national energy and/or economic development strategy on the federal level. Other nations—notably Germany, Japan, and China—have been far more aggressive.
Brookings argues that economic growth is often generated within metropolitan regions. The authors note with optimism the role of the states and local governments—and regional organizations. California was cited for its requirement that 33% of power be generated by renewables by 2020. The Milwaukee Water Council is working to establish its region as the hub for water research, economic development, and education. Connecticut has established a ‘green bank’ to finance clean economy endeavors. New York City has created an Energy Efficiency Corporation to provide financing to install energy efficient infrastructure in buildings.
The Seattle region was particularly noted in the announcement webcast for the efforts of the Puget Sound Regional Council to create the Building Efficiency Testing and Integration (BETI) Center and Demonstration Network. This is a project to create a place for innovators in the energy-efficiency field to test their products, designs, and services prior to launching them into the marketplace, and learn about their integration with the other aspects of the built environment. It would give entrepreneurs an advantage by generating real-world data on the efficacy of their innovations.
We will need efforts like this—and more of them—to be successful in this global competition.