Cleantech Ecosystems: Why MA and CA Are Ahead…and Where WA Stands

Source:  Thomas R. Burton and Billy Najam, Mintz Levin, 2010.  The article Cleantech Ecosystems: Why Massachusetts and California Are Ahead of the Rest was posted on the Mintz Levin website.

Burton and Najam argue that states that wish to develop a cleantech economy must develop five characteristics to attract funding.   California and Massachusetts, they argue, have done this and they are the leaders.  To compete, other states will need to:

  • Develop access to venture capital and other investor networks;
  • Create and support academic, R&D, and innovation resources;
  • Have active state and local governments that provide incentives, act as customers, and create early market adoption conditions such as renewable portfolio standards;
  • Establish cleantech clusters, organizations, and incubators; and
  • Build a community of repeat entrepreneurs and a culture that connects this community and helps support their start-ups.

How does Washington state rate?  I would submit our report card would show a mixed performance.

  • Financing Grade:  B- (There has been much improvement in the last decade in the development of angel networks.  We have some presence in VC cleantech finance, but not nearly as much as the leader regions.);
  • Innovation Resources Grade: A- (UW, PNL, and WSU compare well with any of the competition, but we just don’t have the number of research institutions that MA and CA do.);
  • State and Local Government Grade:  C (We have a renewable portfolio standard and fantastic hydropower resources, but there is very little else–including harmonizing regulations with stated policy.  We still think that we are the everGREEN state, so we have already won.);
  • Cluster Development Grade:  C+ (There is more going on here than people see.  Much of it is well established–McKinstry, Boeing, the utility infrastructure–and tends to be disregarded);
  • Entrepreneurship Grade: A (Doesn’t get much better….); and
  • Overall Grade:  B (About half of the states aren’t really even in the game; of those that are, we are currently in the middle of the pack).