Where Does Ontario’s Future Lie In Cleantech? OCETA and SDTC Examine The Question

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By Tonya Costoff

There has been lots of talk in the last couple of years about clean technology, not just in the science community but with everyday people as well. In fact, it is predicted that clean technology will have a key role in the future of Ontario’s economy, as well as the rest of Canada.

Clean technology is expected to reduce the energy needs and other costs of Canadian industry, which can therefore contribute to its productivity and competitiveness.

In light of the current economic conditions, especially in the manufacturing industry, the government is encouraging that re-training is the way to go and clean technology is one of the areas that a lot of attention will be placed on.

The Ontario Centre for Environmental Technology Advancement (OCETA) and Sustainable Development Technology Canada (SDTC) recently released a report – titled “The 2009 OCETA SDTC Cleantech Growth & Go-To Market Report”, which outlines best practices and opportunities that will contribute to the future success of the cleantech industry in Ontario.

“We are seeing fundamental shifts in the economy, both because of the financial crisis and environmental concerns,” states Dr. Vicky Sharpe, president and CEO, SDTC, in the report. “Increased investments and progressive policy and regulations encouraging new technology adoption are critical and present tremendous opportunities for industry and for all Canadians.”

Dr. Sharpe goes on to state that Canadian industry must adopt clean technologies in order to stay competitive globally, especially as countries like the U.S. and China want to shed costs and increase value in its product offerings. “Canada too must move up the value chain, supplementing its underpinning as a resourced-based economy,” said Dr. Sharpe. “We can lag behind and be a technology taker, or we can use our collective skills and knowledge, some of which is captured in this report, and be a technology seller. Let’s seize the moment and lead,” encourages Dr. Sharpe.

According to the report, Ontario’s clean technology industry represents an important opportunity for the province’s social, environmental and economic future.

There are thousands of environmental services and clean technology companies operating in Ontario today. The report states that Ontario’s emerging clean technology industry has the potential to become a world leader – promising thousands of high-value jobs, and a healthier environment for years to come.

There are high hopes that Ontario’s clean technology industry will become an important contributor to Ontario’s economy. There is an active and growing base of companies in the industry, which leads people to believe Ontario is on its way to fulfilling that promise. Ultimately though, the report suggests that the success of Ontario’s clean technology industry depends on how well its emerging companies turn their products and services that compete in global markets.

“As well-recognized as they are for the quality of their technologies, Canadian technology-based companies are also known for underperforming in their efforts to commercialize their products,” The 2009 OCETA SDTC Cleantech Growth & Go-to-Market Report. “While Canadian companies rank highly in terms of technical capabilities, they rank much lower in terms of achieving and sustaining global competitiveness of their products and services.”

The report aims to make a contribution that will help Ontario’s clean technology companies become globally competitive. It is written for policy makers, industry stakeholders and company leaders. The report is based on extensive quantitative and qualitative research undertaken in autumn of 2008, when over 60 of Ontario’s leading clean technology companies were surveyed – including detailed interviews with 31 CEOs.

As taken from the report:
“Defining “clean technology” or the “clean technology industry” is challenging. “Clean technology” and “cleantech” are terms used variously to refer to a wide spectrum of technologies and industries from alternative power generation, photovoltaic solar panels and advanced biomaterials to environmental consulting, pollution abatement equipment and remediation services. Sometimes companies that use environmentally sound manufacturing processes are also considered to be clean technology companies. Adding to the complexity, it is common for clean technologies of the companies that make them to be termed “environmental” or “green” technologies or companies.

In 2008, there were over 2,600 companies in Ontario included in the environmental industry, generating approximately $7 billion in revenue and employing over 65,000 people. The majority of these companies are consulting engineering firms engaged in various activities such as environmental assessment or project management. And while most of the companies active in the environmental sector rely on advanced technologies, most do not develop the technology themselves; rather, they are users of technologies developed by other companies. This includes, for example, many alternative power generations companies:

This report focuses on Ontario’s clean technology industry; that is, Ontario-based companies that design, develop and manufacture innovative technologies that reduce negative environmental impacts. For the purpose of this report, to be considered an Ontario-based “clean technology company,” a company needed to meet two key criteria:

•     Be predominantly engaged in the development and marketing and/or the use of its own proprietary technology to deliver products or services that reduce or eliminate negative environmental impacts, address social needs, provide competitive performance, and/or use fewer resources than conventional technologies or services.

•     Be headquartered in Ontario, with the majority of its executive management and research and development (R&D) teams located in Ontario.”

One of the areas the report looks at is “How Ontario’s Markets Can Help Build a Competitive, Clean Technology Industry”.

The report states that “clearly a thriving clean technology industry in Ontario must ultimately derive the majority of its revenues from exports.” The report goes on to discuss how Ontario’s domestic market for clean technology products and services can be used to most effectively stimulate the growth of the industry.

The report states that one of its main objectives is to draw attention to the commercialization best practices and strengths in Ontario-based clean technology companies with a view to initiating a dialogue on how great technologies can become the basis of great products brought to market by fast-growing clean technology companies.

For the report, the focus was limited to defining 12 best practices grouped under three major headings:

1.     Best practices in strategy and growth.
2.     Best practices in product management.
3.     Best practices in marketing, sales and distribution.

In conclusion, the report determines that Ontario’s clean technology industry shows promise. Most of the 110 Ontario-based clean technology companies identified in the report design, develop and manufacture globally competitive products. As well, many of the companies were well supported in the early stages of R&D by government programs and organization such as: the National Research Council’s Industrial Research Assistance Program (IRAP); SDTC; Ontario Research Fund; the Innovation Demonstration Fund; the Investment Accelerator Fund (IAF); the Business Mentorship and Entrepreneurship Program (BMEP); and the Next Generation of Jobs Fund (NGJF).

The report suggests that “indicators point to a significant opportunity for Ontario’s clean technology companies to become global leaders.” It goes on to suggest that in order to fully capitalize on its opportunity, Ontario’s clean technology company managers and owners and both federal and provincial levels of government should consider the following development opportunities:

•     Development management capacity for product commercialization within the clean technology industry, and increase investment in commercialization activities.
•     Develop domestic market demand for made-in-Ontario clean technologies to create employment and positive environmental benefits.
•     Develop the investment opportunity in Ontario’s clean technology companies.

For the full report, visit:
http://cleantechnologyreport.ca/

The report:
•     Explores the product commercialization capacity of the clean technology industry in Ontario, and the structural and economic barriers to commercial success faced by Ontario-based
companies.

•     Identifies the best practices in commercialization of some of Ontario’s most successful clean technology firms.

•     Presents the relationship between domestic markets and the companies that make up Ontario’s clean technology industry.

•     Identifies opportunities for clean technology company managers, investors and policy makers to support both the growth of Ontario’s clean technology industry and improve the commercial success of Ontario’s clean technology companies.

Ontario's Clean Technology Sectors

Biofuels & Bioenergy
(feedstocks, harvesting, conversion, production, distribution
technologies)

Power Generation
(solar, wind, hydro, geothermal,
co-generation, fuel cells)

Energy Infrastructure
(management systems,
infrastructure, storage, energy
efficient products)

Process Efficiency &
Abatement
(process efficiency, pollution
prevention, emissions control)

Advanced Materials
(nanomaterials, biomaterials)

Remediation
(contaminated sites and Brownfield redevelopment)

Transportation
(zero-and low emissions vehicles and ‘clean’ components, abatement, emissions reductions for moving vehicles)

Recycling & Waste
(recycling, material handling and sorting, hazardous waste elimination, energy from waste)

Water & Wastewater
(purification, treatment,
infrastructure, conservation)