Will We See a Silicon Valley of Smart Energy?

We all know that Silicon Valley is the beating heart of the tech industry, with large corporations, tiny start-ups, entrepreneurs and the finance community all living, working and drinking coffee together. (This last bit isn’t a throw away reference to our increasing addiction to the black magic bean, but to an article I read in Harvard Business Review in 2010 which said that you are as likely to start up a conversation with a potential investor or tech start-up CEO in the local coffee shop as over a formal meeting in an office.) This melting pot of groups and interest is the key to the success of the Valley. The key players are all there breathing in the same idea.

Do we need a Silicon Valley of Smart Energy? And if so, will we see one emerge? I believe that yes, we do need one. By bringing all the actors together in an environment conducive to change, change happens. Smart Energy is stronger than the sum of its parts, but right now its parts are like hissing cats in a sack, as quick to fight each other as to work together to foster innovation. Just throwing them together won’t enable this change, but it should help them to understand the value of united action. Secondly, investors are still quick to run to the more traditional markets of the old energy paradigm and high tech. Investment in cleantech is still patchy and piecemeal with little evidence of a long term sustainable shift in focus to the Smart Energy sector. A focused geographical region that comprises all the elements of a thriving tech sector would help draw in investors and generate investment.

If the Smart Energy Valley appeared, where would it be? As a European it pains me to write this, but it’s unlikely to be Europe. Even though the European countries compose one of the biggest, if not the biggest, market for Smart Energy in the short to medium term, we are simply too institutionally risk-adverse to celebrate the successes, but critically also the failures, that a thriving Smart Energy Valley would need. Micro valleys (let’s call them “Corries,” from the old Scots word for a round hollow) are springing up all over Europe. These Silicon Corries though tend to promote a regional activity rather than a market. So even though they can be very successful in promoting growth in their regions, their impact on the overall market is limited.

Asia Pacific? More likely than Europe, but still an outlier. In energy at least the focus is still on regional growth and with the markets in Indonesia and China exploding this global focus is still, possibly, on the back burner. Here I could be wrong. If the Smart Energy Valley does appear in Asia Pacific it could well be in one of the younger countries – specifically Australia.

Africa or Latin America? Even with the massive surge in liberalization of energy investment in Africa and the huge strides that Latin America is making to develop deploy Smart Energy technology, there is simply too much going against them for either to be a realistic candidate.

We are left with India, the Middle East, and North America. These are my front runners. I believe a Smart Energy Valley will emerge. Where will it be? In India, the Middle East or North America.

Article by Kerry-Ann Adamson, a research director for Pike Research with a focus on fuel cells; Article appearing courtesy the Matter Network.

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