Disrupting the status quo

The history of innovation says funding will be key to a green tech revolution. Is the government beh

The required shift to a low-carbon and resource efficient economy over the coming decades will not be cheap, but the opportunities for economic growth and job creation are vast. In 2010, it was a market already worth over £150bn worldwide, according to the Climate Change Competitiveness Index, supported by the United Nations Environmental Programme. However, there is evidence that the UK is being left behind. Comparing the levels of public investment in research and development (R&D) in the energy sector from 2007, figures from the International Energy Agency show the UK, with 0.01 per cent of GDP, lagging behind Germany, the US and Denmark (0.02, 0.025 and 0.05 per cent respectively), and even further behind Japan and Finland (both just under 0.09 per cent of GDP).

Despite the desire to be the greenest government ever, huge cuts have hit the Department for Energy and Climate Change and the Carbon Trust, while the Sustainable Development Commission has been axed completely. More specific cuts, such as the scaling back of the feed-in tariffs for solar panels have already hurt small business and low carbon entrepreneurs in a high growth sector.

A helping hand

So how can the government help drive low carbon investment? In a recent Demos report, The Entrepreneurial State, we found that, contrary to conventional wisdom, government funding has played a major role in all the technological revolutions since the Second World War. And government will need to invest again, thist ime in green technology. The £200m investment by the Department for Business, Innovation and Skills earlier this year into Offshore Renewable Energy Technology Innovation Centres shows that the government is making a commitment to help facilitate innovation in green technology and exploit our potential in the offshore market. The Green Investment Bank too will be a crucial tool in the coming years to help channel investment into the low carbon economy.

Small and medium-sized businesses are arguably best placed to develop such radical technologies and it is essential that the conditions are created, through strong policy frameworks, in which such innovation can thrive. Back in 2007, Demos profiled a group of "disrupters", a small but growing cohort of innovators who were turning their business acumen, creativity and entrepreneurial nous towards the low carbon agenda. One of the organisations profiled, Dynamic Demand, promotes a technology that uses smart appliances to smooth spikes in electricity demand at peak times. This increases efficiency, makes carbon dioxide savings and may help connect renewable energy sources, such as solar and wind, to the national grid. Another of the disruptors, Baywind, is now famous as the UK's first community-owned wind farm and has paved the way for a plethora of similar community-owned renewable energy initiatives.

The innovation game

The Shell Springboard Award is one example of where larger private sector companies are helping and encouraging green enterprise. Previous winners of the programme, which provides funding for compelling business ideas, have included a battery management system for hybrid and electric vehicles, a waste reduction technology that converts landfill waste into building materials, and smart windows made of transparent glazing that can turn sunlight into electricity.

Is this really a role where the private sector should take the lead? Is the government providing enough support for low carbon entrepreneurship, or is it shirking its responsibility to facilitate innovation in this crucial sector of the economy? These are the questions and more that we hope to begin to answer within this series of discussions.

William Bradley is a researcher at Demos

This article originally appeared in the New Statesman supplement, "The green tech revolution"

This article first appeared in the 07 November 2011 issue of the New Statesman, The triumph of the Taliban