It was 1997: The Dow Jones Industrial Average closed above 7,000 for the first time in history, Steve Jobs made his triumphant return to Apple Computer, and online retailer Amazon.com saw its share price triple to $60 within four months of going public.
The global economy was in an upswing and Canada was no exception: real growth was predicted to be in excess of 4% after years of flat-lining, consumer spending was up due to low interest rates and tax cuts, and a healthy resource sector had instigated large capital projects. Still, the unemployment rate in Canada was holding at around 9.7% and like so many others at the time, I headed south in search of opportunity.
My search eventually led me to Silicon Valley, where I was to spend the majority of my career advising technology and life sciences companies from Skadden, Arps’ busy offices in downtown Palo Alto. It was an exciting time: no one knew how widely adopted the Internet would become or which of its business models would stand the test of time. Smart ideas and smart money were coming together every day in novel ways to create a new economy; innovators and investors were pushing the boundaries of the Internet and many would be rewarded beyond their wildest dreams.
Of course not every story has a happy ending, and many businesses and their backers ended up in the dustbin of history in the subsequent market “correction”. Still, Silicon Valley’s engine of innovation kept churning out new technologies and high-value ventures long after the speculators and hobby investors had turned their attention elsewhere. As the new century unfolded, Silicon Valley’s successes included game-changers such as Google, VMWare, Facebook and YouTube.
What powers this engine of innovation? How does Silicon Valley foster a culture that consistently propels technologies down the path from vision to development to commercialization to wide-scale adoption? More importantly, how can Canada apply these same principles to maintain leadership in the cleantech revolution?
My interest in cleantech is two-fold. First, I recently joined an Ontario-based startup called Utility Gateway Systems [Plug alert!]. We provide intelligent energy management solutions so that energy users can:
- measure their energy load, usage and costs in real time,
- dynamically manage energy consumption through a user-friendly cloud-based interface, and
- devise a comprehensive energy strategy to guide their decision-making — from procurement to consumption to financing.
As a result, customers enjoy reduced energy usage and costs, which is good for their bottom line and the environment.
Which brings me to the second reason why it’s imperative that Canada maintain a cleantech advantage – our per capital energy consumption is the third highest in the world according to World Resources Institute’s Earth Trends Database. Along with hockey and Timbits, it appears energy over-consumption has become a nationally defining characteristic.
Why should anyone care about Canada’s energy addiction? As with all addictions, Energy Hog Syndrome (or “EH”) is noxious and possibly lethal. According to Environment Canada, energy use produces 90% of Canada’s carbon dioxide emissions, 55% of sulphur dioxide emissions, 90% of nitrogen oxide emissions and 55% of volatile organic compound emissions. (Figures from a report put out by the Eco-Research Chair of Environmental Law and Policy at the University of Victoria).
From a strictly commercial perspective, energy waste results in lost dollars that could be reinvested toward growth or returned to shareholders. Consequently, maintaining a cleantech advantage should be both an environmental and economic priority. It is in this context that I provide a few thoughts on how the Canadian technology and investing communities can work together to ignite a cleantech innovation boom in Canada.
This is Part one of a four part series – stay tuned for Part II tomorrow.