Global Challenge: A Clean, Green High-Tech Future
There is a fierce competition overseas for a better future through innovation. In our 15th annual Global Issue, we take a look at some of the leaders.
More than ever before, the economic success of a nation and its capacity for growth rest squarely on its ability to innovate. As the global recession reshapes markets around the world, and with the urgent push to address climate change, the greatest opportunities revolve around science and technology. European leaders and CEOs are focused on the technologies of the future—clean, green, high-tech, high-value added industries.
Just ask Barack Obama, who acknowledged the growing international competition for innovative business with his economic stimulus package and its heavy investment in clean energy technology.
“They’re surging ahead of us,” Obama said of the overseas competition, “poised to take the lead in these new industries.”
Look no further than the Berlin-Brandenburg region of Germany, which has become something of a global solar mecca. Approximately 200 companies here are linked to the solar industry, in factory planning, materials testing, chemical suppliers, silicone producers, solar module recyclers and others, making up the highest concentration of solar energy R&D in Europe. More than a quarter of all solar cells installed worldwide and 40 percent of all inverters come from German manufacturers, and experts predict an annual growth rate of more than 20 percent for the photovoltaic industry, thanks to cost reduction throughout the value chain, the rapid development of thin film technology, and rising prices for fossil fuel energy.
SOLAR IS HEATING UP
“Solar technology is one of the most innovative and fastest-growing sectors in this region,” says René Gurka, managing director for Berlin’s economic development agency.
Berlin Partner GmbH production capacity, he said, soon will exceed 800 megawattpeak (MWp) per year with the help of the region’s new photovoltaic power plants. Gurka notes that the industry already has created more than 4,000 jobs, with more to come in the near future. Among the more notable enterprises: Solar modules producers First Solar is building the world’s largest thin film solar plant; OderSun is introducing a new form of copper-based thin film technology; Global Solar Energy and Johanna Solar Technology will produce thin film modules each with a production capacity of 30 megawatts; and both Nanosolar of California and 5N PV of Canada, a supplier of ultraclean source materials, have set up offices in Berlin-Brandenburg.
The sector has become a prime international investment target—Intel Corp. last year invested $27.5 million in German thin-film solar module maker Sulfurcell. Berlin’s defined growth sectors—mobility, clean technologies, media, ICT and creative industries, life sciences and services—have grown at a rate of 40 percent while the rest of the economy achieved a growth rate of 4 percent.
“We have defined several growth sectors and technology clusters in which Berlin is already at an international top level,” Gurka says. “These clusters will be enhanced and supported by specialized cluster management, financial incentives and networking activities.”
BUSINESS, GOVERNMENT, ACADEMIA JOIN FORCES
The area’s innovation is aided in part by the seven universities and 21 colleges with more than 60,000 students in the technical and applied sciences. Companies in Germany’s capital region receive investment subsidies of up to 30 percent, with median and smaller companies getting 40 and 50 percent, respectively.
The region’s two business two business development agencies work with investors to garner financial support from state and federal sources and the European Union.
Many European countries have taken similar approaches to reinforcing their long-term competitiveness with clean technology and “smart” investments.
In its recent report, the UK’s Department for Business Innovation & Skills declared that innovation to develop new goods, services and business processes will be the European Union’s primary source of long-term productivity growth. Europe is peppered with pockets of world-class research capability and has a longstanding tradition of breakthrough inventions, the authors noted, saying the continent is “at the technological frontier in many sectors.”
The report calls for maximizing business opportunities in key sectors such as green technology, and encouraging the emergence of centers of biotech excellence.
SPAIN TARGETS BIOTECH AND RENEWABLE ENERGY
In Spain, these centers have helped make Catalonia a pioneer in the renewable energy and biotech sectors. The region boasts 13 science parks, 553 research groups, 137 R&D centers and 308 university departments, 108 of which are dedicated to biotech research. A planned Energy Park in Barcelona will bring together educational institutions, R&D centers and companies committed to research, development and innovation in energy.
According to information provided by Invest in Catalonia, the park—part of the publicly funded 22@Barcelona urban transformation project—was conceived to create added value through the generation of business opportunities for knowledge and innovation. Its objectives are to improve the competitiveness of companies related to the energy, water and mobility fields through participation in technological projects and tech transfer; to lead the energy cluster; act as a hub of technological knowledge and of the energy market; encourage the physical presence of innovative businesses in the sector; and guide training content in energy.
Construction has begun on the Catalan Institute for Energy Research (IREC), located at the Energy Park and expected to become a worldwide point of reference in the field of research for energy savings and efficiency. The institute, which will focus on areas including energy efficiency, power electronics, “intelligent” electrical charts, and biofuels, has an investment of 28 million euro.
The IREC is expected to reach full capacity by 2014. The Spanish government has made a concerted effort to lower its corporate tax over the past few years, according to Natalie Touzet, investment manager for Invest in Catalonia. The rate has dropped from 35 percent three years ago to 30 percent. Also, public subsidies for biotech research, training and contracting in Spain have increased at an average rate of 22.6 percent over the last five years.
REBOUNDING THROUGH INNOVATION IN THE UK
The UK aims to recover from the recession in part by investing in both existing and emerging sectors in a variety of ways.
The government is helping businesses with cash flow by allowing them to defer more than £3 billion in taxes, and has agreed to binding commitments with Lloyds and RBS to increase credit availability for an additional £27 billion in business loans. It also is backing bank lending to viable businesses that cannot get commercial loans—the Enterprise Finance Guarantee enables banks to provide an additional £1.3 billion of credit to SMEs that have viable business plans but cannot access normal commercial lending as a result of the current market conditions. Nearly 3,700 businesses have been offered loans totaling over £364 million.
“For the emerging sectors, the UK government is helping small businesses, start-ups and spinouts in the digital, life science, clean technology and advanced manufacturing sectors, which are leading the charge in terms of growth and innovation,” says Kirsten Chambers, consul and head of trade and investment for UK Trade & Investment.
The UK Innovation Investment Fund (IIF), backed by £150 million in government funds, recently was set up to accomplish that mission. The money is actually being invested in a small number of specialist technology funds that have the expertise and track record to invest directly in companies.
The new fund presents good opportunities for key sectors such as the life sciences, manufacturing and clean tech, Chambers says, noting that the government hopes to leverage enough private investment to build a fund of up to £1 billion over the next 10 years. The UK’s fastest growing and most productive sectors include aerospace, creative industries, financial and business services, ICT, life sciences, and nanotechnology.
More than a million people are employed in computer science-related fields in the UK, more than half of them in the software and computer services industry. There are more software startups in the UK than any other European country, thanks in part to public-sector engagement and heavy government investment, according to UK Trade & Investment. Corporate tax in the UK stands at 28 percent, and businesses are offered an extensive range of capital allowances and tax credits.
For R&D investments, all companies receive the normal 100 percent deduction from taxable income, and large companies are entitled to a further deduction from their taxable income of 30 percent of their current spending on qualifying R&D; SMEs are entitled to a further deduction of 75 percent.
In Luxembourg, an environmental technologies plan has been introduced with a new environmental aid regime to enable additional incentive measures. The government will provide support for feasibility studies for companies seeking to operate in the sector. National grant subsidies have been doubled to 5 million euro for R&D programs.
An annual survey released in March by the Information Technology and Innovation Foundation ranked Luxembourg third worldwide in innovation and competitiveness, based on indicators such as human capital, innovation capacity, entrepreneurship, IT infrastructure, economic policy factors and performance.
Meanwhile, to further encourage economic growth the nation has implemented a broad range of tax law changes, including an 80-percent tax exemption on income derived from intellectual property, a reduction in the corporate income tax from 22 to 21 percent, and the abolition of the capital tax duty.
GERMANY’S HIGH-TECH HUBS
Recent studies have highlighted Germany’s economic gains and attractiveness as a business location, due in large part to its growth in high-tech and green-tech areas. Ernst & Young recently named Germany the No. 1 business location in Europe and No. 6 worldwide, based on a survey of more than 800 international decision-makers and 207 companies.
Though the nation received high marks in telecommunications and logistics infrastructure, social climate and workforce qualifications, the survey also displayed confidence in Germany’s ability to meet the challenges of the economic crisis. This is attributed to the country’s innovation capacity and entrepreneurial spirit. Bavaria, Germany’s largest state is a popular investment location, particularly among U.S. companies in research-intensive sectors. Some 850 U.S. companies have locations in Bavaria.
In 2008, FDI from the U.S. increased in the state’s media industry and remained strong for information technology companies. The current year has seen significant investments from U.S. companies in life sciences, ICT, automotive and call center operations, according to Bavaria Minister of Economic Affairs Martin Zeil.
“Our focus has been and will continue to be on providing support and opportunity for the high-technology and knowledge-based sectors that are a launch pad of success in Germany and throughout Europe,” Zeil says.
Notably, General Electric Aviation, one of the world’s leading manufacturers of jet aircraft engines, has chosen the city of Regensburg as the site of its new research facility. And in the call center sector, the state recently landed major investment projects from companies including SEI, 37 grad dialog GmbH and Nürnberger Communication Center.
According to Zeil, U.S. companies and others choose Bavaria as a business location for its expansive market potential, strong R&D opportunities and capabilities, pro-business policies, advantageous infrastructure and a central location, excellence in high technology and a diverse and successful marketplace.
“Bavaria is a leader in air and space technology, as well as in satellite navigation, automotive, mechanical engineering, renewable energy technology, environmental engineering and mechatronics and telematics. Bavaria is among Europe’s leading life science cluster locations, including biotech, medical technology and pharmaceutical, and our state capital, Munich, is rapidly becoming a hub for the media sector in Europe,” Zeil says.
Economic policy in Bavaria is focused on supporting sustainable economic growth, according to Zeil. Its Cluster Initiative promotes the state as a location for business and science, and aims to build statewide networks linking companies, research establishments and universities in 19 defined clusters, including mainstays such as automobiles, industrial facilities and equipment, electronics and chemicals. The fastest-growing sectors are environmental technologies, energy engineering and food processing, while other important clusters include ICT, media, life sciences, logistics, aerospace and satellite navigation.
Bavaria’s strategy, Zeil says, “fosters innovation, productivity and economic growth within these clusters, allowing the development of new products and processes.”
Innovative companies get a boost from Bavaria’s BayernFIT program, which provides 1.5 billion euro for technologically challenging development projects and infrastructure. Germany’s tax structure is competitive, with the average burden reduced from 38.7 to 29.8 percent in 2008. This includes a 15 percent corporate income tax and 14 percent trade tax. There is also a 0.83 percent solidarity surcharge. As part of its counter measures to the economic crisis, Bavaria increased loan guarantees available from the state-owned development bank, ensuring capital for SMEs.
In May, a new federal stimulus package was approved with another 1.96 billion euro to be invested over the next two years in Bavaria.
Nearby, the state of Hessen is home to Germany’s largest bio-manufacturing sector, with companies such as Merck Serono, Sanofi Aventis, Abbott and Fresenius. According to Kristina L. García, managing director of Hessen’s U.S. Office for Economic Development, the state boasts exemplary infrastructure and easy access to capital markets with global financing and favorable policies for foreign firms.
Companies maximize their market potential with access to Hessen’s industry clusters such as global finance and logistics in Frankfurt; software and biotech in RheinMain; science and innovation in Darmstadt, Giessen, Kassel and Marburg; and environmental technologies in Northern Hessen. The state has approximately 2,400 environmental technology companies, with 77,000 employees. The most important segments are water and waste water, waste management and renewable energy.
“Environmental technology companies are drawn to Hessen because they recognize it as an innovative state that is dedicated to finding solutions to meet global challenges of the future,” García says. “The sector plays a major role in securing and creating jobs in Hessen.”
Hessen’s solar industry comprises some 250 firms, including SMA Solar Technology AG, Wagner & Co. Solar Technology, Concentrator Optics, Ralos and BlueTec. Recently, Seattle-based 3Tier, a software developer and global leader in weather-driven renewable energy assessment and forecasting for wind, solar and hydro power projects, chose Wetzlar for its European headquarters. The company is also expanding with offices in Australia and India.
‘TREMENDOUS GROWTH’ PREDICTED IN GREEN ENERGY
Dr. Pascal Storck, president of global operations for 3Tier, says the idea is to grow in key locations “where we foresee tremendous growth in the development of renewable energy projects.” In Europe, he says, “wind and solar power are already integral to the energy equation.”
Hessen has been able to nurture a high density of ICT companies due in part to Frankfurt’s 11 independently operated fiber networks. Hessen’s software and IT services industry has grown by 20 percent since 2000 and has a workforce of 518,000, and Germany anticipates 59,000 new jobs in software by 2012. The Darmstadt region in particular is at the center of this boom. Financial support for businesses in Hessen generally takes the form of loans, guarantees or mezzanine financial products. Also, grants are available to businesses.
“Hessen, with finance center Frankfurt, has shown remarkable stability even when world financial markets have been in crisis,” García says.
BERLIN: ADVANCED HUB OF EURO CLEAN TECH
Planned as Europe’s most innovative and technologically advanced center, Berlin’s Clean Tech Business Park is expected to break new ground in the renewable energy sector. The park, located in Marzahn on the northeastern edge of Berlin, will comprise nearly 10 million square feet tailored to companies linked to the renewable energy sector: solar energy, wind power, biomass, biofuels, water technology, recycling and disposal, low emission power plants, energy efficiency in construction, and micro-engineering.
“Looking for new, clever ways to enhance high-tech industries, we found that top-notch infrastructure is of high importance. So we developed plans for a manufacturing area specialized on clean technologies,” says René Gurka, managing director of the economic development agency Berlin Partner.
The 230-acre campus will cater to the needs of cell and module producers whose production sometimes requires complex chemical processes. Among other amenities, the business park will provide a gas farm, 24-hour logistics, recycling and other important facilities that may not otherwise be part of manufacturers’ core business, according to Gurka.
“Companies interested in setting up operations here will enjoy considerable advantages, including reduced investment requirements and a more rapid time to market,” says Ansgar Tesch, project manager for the borough of Marzahn-Hellersdorf.
A $34-BILLION INVESTMENT
The first stage of the project will cost $34 billion, with national, state and city funding and aid from the European Union, according to Tesch.
“The Clean Tech Business Park will be financed by public funding at a first stage and then the ground will be sold to private companies to set up manufacturing sites there,” Gurka says. “The idea is to subsidize infrastructure instead of individual companies. These companies can take advantage of this infrastructure and cut costs by sharing them with others. We tested this already in talks with potential investors and are convinced that this is a highly attractive new model.”
Businesses locating in the park will find themselves in good company. Energy manufacturer Vattenfall is located near the site, along with Coca-Cola and Niles machine tools, and Inventux Technologies AG already is onsite. Inventux, touted as the world’s largest start-up in photovoltaics in 2007, invested more than $73.5 million (USD) and began production in 2008. The solar energy company, which launched Europe’s first serial production of micromorphous thin-film solar modules, already is planning a second fab.
CaliSolar, of California, intends to develop 50 acres for standard wafer-based photovoltaic cells using upgraded metallurgical-grade silicon; and Inventux will expand to another 50 acres (the number and size of future tenants remains to be determined). The planning process is expected to be concluded next year, with construction commencing in mid-2011, Tesch said.
Tamana InTech Park—for the next generation of innovation and entrepreneurship
Trinidad and Tobago’s century of success has fuelled its rapid economic development to become one of the most industrialized nations in the Caribbean. T&T is the world’s leading exporter of ammonia and methanol and the main supplier of Liquefied Natural Gas (LNG) to the United States. Nevertheless, the government of T&T has strengthened its efforts to develop the country’s non-energy sector through the establishment of Evolving TecKnologies and Enterprise Development Company Limited (e TecK).
e TecK’s mandate involves developing and supporting new industries, thus creating an environment to stimulate diversification of the T&T economy, reduce dependency on energy and achieve self-sustaining growth.
The Tamana InTech Park, once the site of a US Air Force base during World War II, will be a catalyst for securing the future of Trinidad and Tobago by leading the country’s transformation from an energy-based to a knowledge-based economy.
Tamana is one of the largest technology parks in the world at 1100 acres. It is being constructed with modern and sophisticated physical infrastructure, underground utilities corridors, first-class road networks and recreational facilities, as well as world class ICT infrastructure and services, including one of the region’s few Tier III Data Centers.
T&T’s strategic location at the center of the Americas adds to the attractiveness of the Park which has already generated interest from international businesses seeking to expand operations globally. Major technology players looking for the next best place to innovate are also attracted to the Park’s world-class technology infrastructure.
Corporate clustering is a main feature at the Park. The business cluster creates an environment in which like businesses and other related industries both upwards and downwards of the value chain interconnect to create innovative solutions and increase productivity which will allow them to compete on a global scale. Tamana is divided into four special technology and knowledge-driven clusters, which include the Information Communication Technology (ICT) zone; the High Value-Added Manufacturing / Downstream Energy Cluster; the Agro-Industrial Cluster and a Mixed-use cluster.
Science parks are often associated with institutions of higher learning, and Tamana will be no different. An anchor tenant on the Tamana compound, the University of Trinidad and Tobago (UTT) has aligned its operations and objectives with those of the Park and will provide the necessary industry-sponsored, indigenous research and development programs in addition to a cadre of highly-skilled personnel who will work at the Park. In turn, the UTT will benefit from exposure to global business as well as to new, cutting edge technology and research conducted globally in the industry. In other words, Tamana will foster knowledge partnerships and innovation.
Another key feature of Tamana InTech Park is the opportunity for forging new innovation through financing mechanisms aimed at securing the funding necessary for the most promising areas of innovation.
The technology-based business incubator will provide a wide array of required business support services, including financing, which will enable the successful acceleration of development of a start-up enterprise. Management guidance, access to a network of venture capital funds, access to appropriate rental space, shared business services and equipment, and bundled technology support services are among the many benefits entrepreneurs can derive from the incubator.
And what would a science park be without its emphasis on the environment? The promise of the Tamana model of ecological soundness rests on a foundation of the ability to seamlessly merge natural and man-made elements. The Park is situated among indigenous Moriche palms on a natural reserve and boasts a LEED-certified Flagship Complex, extensive green space for recreational activities including hiking and biking; and the largest butterfly emporium in the Caribbean which will showcase the more than 600 species of butterflies that exist in Trinidad and Tobago.
The Tamana Intech Park is a member park of the International Association
of Science Parks as well as the United Kingdom Science Park Association. These memberships allow the park to benefit from the wealth of experience available in the associations.
Tamana InTech Park will see the process of collaboration between industry and university, the availability of first-class technical infrastructure support within the Park, the convergence of leading companies and institutions, and the spawning of technology start-ups—all intertwined with the natural ecosystem of the surrounding landscape. With the abundance of natural and human resources available in Trinidad and Tobago, the Park is well positioned to become a home for all with an innovative and entrepreneurial spirit.
For more information on Tamana InTech Park, please visit www.tamana.com or call 1-868-638-0055.