Three Green Industries Ready for a Growth Spurt
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It's been more than 30 years since politicians and scientists started talking up their vision of a glorious green economy, one where reformed coal miners and oil refiners tinker on solar panels and windmills, or algae farmers grow biofuel in mile-high agri-towers. High gas prices, oil slicks and clean coal commercials serve as daily reminders that this Popular Science world-of-tomorrow future is as distant now as it was in the bell-bottom era.
Though we're not living under domes in some eco-topia, it doesn't mean the green economy vision failed. In fact, certain elements of the sector are humming along nicely, offering great ground-floor opportunities for entrepreneurs. As long as research, investment and public attention stay focused on emerging green technologies, we are on the verge of an era of economic opportunity similar to the early Internet days.
While putting up wind turbines or harvesting the tides falls under the domain of big corporations like GE and Vestas, there's plenty of work for smaller guys. The biggest business opportunities aren't in redesigning cities and rebuilding the grid, they're in the not-quite-as-sexy arenas of retrofitting, recalibrating and redesigning the wasteful or inefficient technologies we have right now. Here are three green industries ready for a growth spurt.
In 2009, John Doerr, the famed Kleiner Perkins Caufield & Byers venture capitalist who backed the early stages of Google, Amazon and Intuit, proclaimed that "greentech could be the largest economic opportunity of the 21st century." It's well on its way--in 2010, venture capital groups pumped $7.8 billion dollars into 715 new cleantech projects. Though cleantech is a catch-all term for everything from wind and solar projects to recycling, nanotechnology and even high-speed trains, entrepreneurs interested in jumping into the sector should focus on energy efficiency.
"There are huge opportunities in efficiency," says Sheeraz Haji, CEO of San Francisco-based Cleantech Group, the industry's leading market research firm. "I recently spoke with a guy who is big in the green building movement and he says 95 percent of buildings don't operate efficiently."
There's great opportunity for entrepreneurs interested in developing technologies, systems and services that improve energy efficiency, like improved windows and insulation and more efficient heating, cooling and water heating; as well as energy use, like LED light bulbs. Other passive technologies like low-carbon drywall, active light management systems and energy software can show big returns with little effort. "This is an industry that is just getting going from an entrepreneurial perspective," says Haji.
Ron Pernick, co-author of The Clean Tech Revolution and a founder of Portland, Ore., market research firm Clean Edge, agrees. "Energy conservation and efficiency has been an area of low-hanging fruit for decades, and payback for customers is quick, usually two to three years," he says. But he also thinks taking the time to learn the local players and regional landscape pays off. "This is not just about technology companies creating new gadgets. It's also about creating new energy models to deploy. There are 50 states, each with different energy models and all with different public utility districts and private utilities. It's important for people to understand the differences and the legislative and regulatory framework."
Investors seem to have a soft spot for efficiency, too--last year they funded roughly a billion dollars in new energy efficiency ventures.
One name sums up the reason sustainability consulting is one of the great green growth opportunities of the next few years: Wal-Mart. The Bentonville, Ark.-based company is in the process of determining the sustainability and life cycle of all the products it carries. All 100,000 of the company's suppliers around the globe are required to answer 15 basic questions about their products, like the amount of water used by the factory, the amount of greenhouse gases emitted and whether they even know where their own suppliers are located. Eventually, Wal-Mart wants to create sustainability scorecards for products, telling consumers the eco-friendliness of each toaster and plastic it sells.
Answering those questions is easier said than done. For many companies, evaluating this information means they need to bring in help, usually in the form of a sustainability consultant or trained on-staff sustainability manager. While the mega-brand won't cut suppliers based on their eco-answers, no one wants to end up with a bad score.
"Small and midsize companies in the Wal-Mart supply chain especially need help," says Jennifer Woofter, founder of Herndon, Va.-based Strategic Sustainability Consulting, which not only counsels companies
on their eco-decisions, but also conducts industry surveys and mentors would-be consultants. "There's Wal-Mart's 100,000 direct suppliers, and then the suppliers of those suppliers. In many of these companies, the VP in charge of marketing has literally become the VP in charge of marketing and sustainability overnight. They're calling consultants because they don't have a spare minute to devote to sustainability."
For the most part, sustainability management has been an unregulated business, with no certifications or experience necessary. But after a flurry of activity in 2007 and 2008, the recession led to industry consolidation and many of the fly-by-night operations went kaput. Now, as demand picks up, companies are looking for experienced, educated consultants and in-house managers. Universities including Columbia, Harvard and the University of Wisconsin offer degrees or certificates in sustainability management, and nonprofits like the Greenhouse Gas Management Institute in Washington, D.C., offer training protocols.
But Woofter advises would-be eco-consultants to drill down on one subject instead of trying to be all things to all companies. "There are huge opportunities here, but it can be incredibly competitive. You need to specialize; there's no way you can develop a competency in all sustainability topics," she says. "You can work with hospitals to reduce energy, or help restaurants to green their food supply. You need to explicitly define how to bring value to your client."
Doesn't it warm your heart when a philanthropist or company turns a patch of woods or a stream-side meadow over to the state or parks department for use as a park or forest reserve? Sorry to ruin the moment,but chances are the land is degraded. The woods are probably choked with garlic mustard, a fast-spreading invasive plant that shades out native wildflowers, and the meadow is likely filled with reed canary grass, buckthorn and other weeds. Let the land go back to nature and it would quickly fill with even more exotic species that choke out the native plants and animals that normally thrive there.
Enter the ecological restorationists. They fix up the mess and try to get the natural native system working again by resupplying drained wetlands with water, planting native plants and seeds, restoring a cyclical fire regime or cutting down invasive trees. Healing the land is often difficult, dirty, hands-on work--but practitioners find it infinitely rewarding.
"There are many companies in the industry at this point, the bigger ones have 100 people, smaller ones might have one or two people," says Ron Bowen, who has been restoring native grasslands as president of Prairie Restorations Inc. of Princeton, Minn., since 1977. "The types of operations run the gamut--some provide materials or plants, some do installation services, some do management, some do all of that. Going into 2011, the outlook for restoration is very bright."
That's because citizens and governments are finding that the fastest way to improve water quality and increase quality of life is to improve the land around them. Instead of leaving old industrial buildings to rot or letting streams act as surrogate sewer systems, they're opting to bring them back to life. Even more, corporate campuses, homeowners associations and backyard naturalists are engaging restorationists to bring a little natural authenticity back to their urban and suburban plots.
Restoration is a fairly young science--it didn't really coalesce into a discipline until the late 1940s. Figuring out exactly how to get out-of-whack ecosystems back in line is still hotly debated, and more of an art than a science. But Bowen thinks as the industry grows, improved techniques and technology will continue to develop.
"It's been a struggle for the companies that laid the foundations of this industry, but I think it will develop very, very nicely," he says. "People are starting to see indications that we're abusing our resources--and that we have to fix things."