Where’s the real opportunity around clean technology? According to a new report from the World Bank, developing countries are the place to focus – and the stakes are high.
Over the next decade, investment across 15 cleantech sectors in developing economies is expected to exceed a jaw-dropping $6.4 trillion (U.S.), the bank reported. Of that, about $3.6 trillion will be in water technologies, including wastewater.
Renewable energy technologies – wind, solar, small hydro and geothermal – are expected to capture another $1.9 trillion, with the rest spread across waste technologies and low-emission transportation, including electric vehicles.
Big multinationals like General Electric and ABB are expected to grab a lion’s share of the market, but the bank said about $1.6 trillion will be accessible to small and medium-sized businesses (SMEs) that can adapt technology, processes and financing to local conditions and needs.
“Opportunities are available for SMEs across the entire clean technology value chain, but are particularly prevalent in minor equipment manufacture, installation, civil works, retailing, and operations and maintenance activities,” according to the report. “Knowledge of local markets, the need for specialization, and lower financial and technical barriers to entry make these activities especially accessible to SMEs.”
The bank said government support such as loan guarantees and tax credits will be key, particularly R&D grants. The payoff is local job growth, as well as jobs that are more skilled, safer and better paid.
But it urged governments to craft that support wisely by building on local strengths. “Policy makers are advised to take into account their national circumstances and focus attention on developing policy interventions on ‘fertile ground’, as opposed to supporting technologies and sectors that do not have the support of already existing human and natural resource capacities.”