Global Cleantech Innovation Index 2014

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Please contact report authors for questions or comments
regarding this report.
Lead author
Michele Parad, Senior Analyst, Cleantech Group.
michele.parad@cleantech.com
Contributing authors
Stefan Henningsson, Senior Adviser Climate
Innovation, WWF International.
stefan.henningsson@wwf.panda.org
Tabaré A. Currás, Advisor on Energy Economics,
WWF International. tacurras@wwf.panda.org
Richard Youngman, MD Europe & Asia,
Cleantech Group. richard.youngman@cleantech.com
Partners
Karin Hallerby, Head of Department International
Affairs, Swedish Agency for Economic and Regional
Growth – Tillväxtverket
Jan Persson, Researcher, Department of Analysis,
Swedish Agency for Economic and Regional Growth –
Tillväxtverket
Cover photo: © Global Warming Images / WWF-Canon
Background Photo: © Global Warming Images /
WWF-Canon
Printed by a Climate Neutral company,
Edita Västra Aros 2014.
About WWF
WWF is one of the world’s largest
and most experienced independent
conservation organizations, with over
5 million supporters and a global
network active in more than 100
countries. WWF’s mission is to stop
the degradation of the planet’s natural
environment and to build a future in
which humans live in harmony with
nature, by conserving the world’s
biological diversity, ensuring that the
use of renewable natural resources is
sustainable, and promoting the reduction
of pollution and wasteful consumption.
The Global Climate and Energy Initiative
(GCEI) is WWF’s global programme
addressing climate change and a move to
100 percent renewable energy through
engagement with business, promoting
renewable and sustainable energy,
scaling green finance and working
nationally and internationally on low
carbon frameworks. The team is based
over three hubs – Mexico, South Africa
and Belgium.
www.panda.org/climateandenergy
About Tillväxtverket
The Swedish Agency for Economic and
Regional Growth (Tillväxtverket) aims
to strengthen the competitiveness of
Swedish companies in the global
economy by facilitating entrepreneurship
and creating attractive
environments for business in Swedish
regions. Based on knowledge of
the needs of businesses and regions,
Tillväxtverket builds networks to
facilitate cooperation and finance
efforts to boost economic growth.
One task for the Agency is to support
small and medium sized enterprises
with fully developed green goods and
services in their business development.
The aim of the financial support is to
strengthen their competitiveness in
domestic and international markets.
The Swedish Agency for Economic and
Regional Growth (Tillväxtverket) is an
agency of the Ministry of Enterprise,
Energy and Communications.
For further information:
www.tillvaxtverket.se.
About Cleantech Group
Cleantech Group’s clients – corporations,
utilities, government agencies, and
investors – recognize that innovating
is crucial to business growth, yet can
be challenging to pursue. The company
partners with its clients to accelerate
innovation. With more than a decade
of experience covering 18 sectors of
resource technologies, Cleantech Group
is uniquely positioned to guide clients
along their innovation journey through
three lines of business. The i3 platform
allows subscribers to discover and vet
companies, as well as explore technology
sector trends strategically using
proprietary real-time data. Cleantech
Forums, held around the globe,
convene investors, entrepreneurs, and
international policy makers to examine
trends, develop innovation strategies,
and make deals happen. The firm’s
Advisory Services help clients design
and implement corporate strategies
for sustainable growth and innovation
sourcing, and then market the results.
Learn more at:
http://www.cleantech.com.

Cleantech Group and WWF
3
EXECUTIVE SUMMARY
This report investigates the countries where entrepreneurial clean
technology companies are most likely to emerge from over the
next 10 years – and why. Drawing on a wide range of factors and
sources, the study seeks to answer the same question as the 2012
Global Cleantech Innovation Index, namely: which countries
currently have the greatest potential to produce entrepreneurial
cleantech start-up companies which will commercialise clean
technology innovations over the next 10 years?
• 40 countries were evaluated on 15 indicators related to the creation, commercialisation
and growth of cleantech start-ups.
• Israel topped the 2014 index, with its relative outperformance on the measure of start-up
companies per capita being a key reason that it did so. The country generates the culture,
education and ‘chutzpah’1 necessary to breed innovation, plus it has the survival instincts
to manage a resource-constrained geography.
• Finland took second place in recognition of the clear efforts the country is making to mobilize
its workforce towards sustainable innovation. Finland is also developing novel innovation
approaches to access larger, cleantech hungry markets in other geographies.
• USA came in third place in the 2014 index, with its clean technology start-ups clearly
attracting the most venture capital on an absolute basis. However, in the past few years, there
have been more cleantech funds set up to invest in China than for any other part of the world,
with capital inflows expecting to rival that of the U.S. in the years to come.
• All of the top 10 countries in the index are relatively good at early stage cleantech
development but share a common challenge in increasing commercialisation rates. Denmark,
however, stands out for producing a large number of mature, publicly-listed cleantech
companies relative to the size of its economy.
• While China, India and Brazil currently fall outside of the top bracket of start-up generators
in the index, their rank is likely to rise in the years to come as they possess a strong climate
for growth and development, high levels of pollution, or resource drivers to commercialise
cleantech innovation.
• Even the so called ‘laggards’ in the index (e.g. Russia, Saudi Arabia) are beginning to
implement supporting structures for sustainable innovation – in order to hedge against the
realities of limited conventional energy sources in the long-term.
• Overall, this index demonstrates that countries will get ahead if they 1) are able to adapt
to growing demand for renewables (at home and abroad); 2) are connecting start-ups
with multiple channels to increase their success rates and; 3) are increasing international
engagement to spur widespread adoption of clean technologies.
• Overall the index shows countries that put significant resources into supporting cleantech
innovation are rewarded with more emerging and commercialised cleantech companies,
validating the approach many governments have taken to actively promote cleantech
innovation nationally.
The Global Cleantech Innovation Index 2014
1 Hebrew/Yiddish slang word to mean someone that is brave and takes risks

FOREWORD
The science is clear that, after two centuries of burning fossil fuels and emitting
greenhouse gases at an exponentially increasing rate, the earth’s climate is changing.
Anthropogenic warming is disrupting a number of natural systems on which we
depend, with predicted effects of temperature increases above 2°C to include more
extreme weather events, sea level rises, precipitation changes, disappearing coral
reefs and ocean acidification. International climate change negotiations are not
delivering sufficiently on the challenge to avoid catastrophic climate change, which
make accelerated investments in solutions by business, financial institutions,
countries and cities even more crucial.
Current trends of energy investments fall well short of the amount needed to avoid
dangerous global warming. And policies in place are insufficient to give guidance to
investors. The private sector must start shifting investments from dirty fossil fuels
into sustainable energy within the context of consistent policies needed to steer
private financing for renewables and energy efficiency. Investments of about $U.S.
2 trillion annually by 2035, will be required for both energy efficiency and clean
energy.2 Currently, the world invests less than $U.S. 400 billion in clean energy
while all fossil fuel investments have grown to around $U.S. 1.1 trillion in 2013,3
and fossil fuel subsidies account for another $U.S. 2 trillion. In 2012 alone, the 200
largest publicly traded fossil fuel companies collectively spent an estimated $U.S.
674 billion on finding and developing new reserves – reserves that cannot be utilized
without breaking the world’s carbon budget and without becoming useless assets in a
scenario where we avoid catastrophic climate change.4
It is becoming clear to investors that there is a lot of money backing up the problem
that can be shifted to support the solutions. Moreover, it is increasingly clear
that renewables must assume the full share of the global energy supply market
fairly shortly in order to avoid 2°C global warming whilst preventing major water
pollution, hazardous waste for generations, poor human health, proliferation of
nuclear weapons and unnecessarily high costs.
Solutions do exist and can be enacted with the right combination of political, social
and financial will. WWF’s Energy Report shows that all of the world’s energy needs
could be provided cleanly and renewably by the year 2050, in ways that can be
sustained by the global economy and the planet, and that such a transition is not
only possible but cost-effective.5 However, the major innovation challenges ahead
include the acceleration of business models that take solutions to market and the
continuous cost-cutting of key technologies.
2 World Energy Investment Outlook, IEA, 2014
3 World Energy Investment Outlook, IEA, 2014
4 Unburnable Carbon – Are the world’s financial markets carrying a carbon bubble?, Carbon Tracker Initiative, 2011
5 The Energy Report – 100% Renewables by 2050, WWF, 2011
4 The Global Cleantech Innovation Index 2014

5
In order to accelerate progress we need to look at the conditions surrounding
our large and small solution providers. We will need to see a wide range of
innovative cleantech solutions quickly scale up over the next 10-30 years. Agencies,
governments, investors and business need to proactively collaborate as forces
for change in transitioning towards a sustainable energy future on a global level.
Understanding these innovation processes is important in order to accelerate
increase of the “good” as a complement to the establishment of national climate
targets and carbon caps that address a more rapid decrease of the “bad.”
Tracking the innovation activity of smaller cleantech disruptors that carry the hope
of enabling a shift to more Good solutions is the impetus for this Global Cleantech
Innovation Index. We must join hands in creating a more attractive future for all and
be clear to decision-makers that we are ready and able to do so.
Samantha Smith
Leader, WWF Global
Climate and Energy Initiative

Contents:
Introduction �.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�7
The Global Cleantech Story: Evolution .�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�. 8
Research Context �.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�. 10
The Global Cleantech Innovation Index Methodology �.�.�.�.�.�. 11
The Framework of the Global Cleantech Innovation Index �. 12
The 2014 Global Cleantech Innovation Index Factor Table �.�. 13
Results and Analysis �.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�. 14
Country Archetypes �.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�. 16
A: General Innovation Drivers �.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�. 19
B: Cleantech-Specific Innovation drivers �.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�. 21
C: Emerging Cleantech Innovation �.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�. 23
D: Commercialised Cleantech Innovation �.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�. 24
Renewables in the Innovation Index �.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�. 28
Concluding Remarks �.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�. 35
Appendix A: Indicators and Sources �.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�. 36
Appendix B: Methodology Considerations �.�.�.�.�.�.�.�.�.�.�.�.�.�.�. 37
Appendix C: Abbreviations �.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�. 37
Appendix D: Country Profiles �.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�.�. 38
© MICHEL GUNTHER / WWF-CANON

7
INTRODUCTION
With the world’s population projected to increase to over nine billion by 2040,
sustainable innovation will surely continue to go mainstream in the upcoming years, in
order to enable the world to re-use and share the earth’s finite resources. ‘Business-as-usual’
scenarios of coal mining, oil production, air, land and water pollution, will only
continue to result in security, health and ecological damage. As an illustrative example,
it is estimated that 1.3 million people die every year from urban outdoor air pollution
originated from air pollutants such as So2, NOx, heavy metals, or black carbon.6 As
such, global energy and environmental challenges of the next ten to fifty years will
require multi-dimensional innovative solutions.
Policy makers and large enterprises alike are aware of the potential benefits of curating
clean technology start-ups, and are viewing sustainable innovation as an additional
source of employment and revenue growth. The investor community has also been a
driving force - investing over $41 billion of venture capital into cleantech start-ups in
the last five years7 – almost double the amount of the previous five years. However, the
next wave of cleantech businesses will require more than just capital and policy backing
to grow – the industry will need to build relationships with local and international
partners to bring them to desirable scale.
The Global Cleantech Innovation Index explores the question of where sustainable
innovation companies are being created across the globe, as well as how well their
products are being commercialised. This index, first produced in 2012, remains the
only study (we know of) seeking to look at why entrepreneurial companies developing
sustainable innovations, seem to spring up in certain geographies, and which economic,
social and environmental conditions cultivate hotbeds for such innovation. All
countries can do the workout needed to improve their conditions in the decades to
come, especially if they can emulate and learn from the strengths of other countries in
generating and commercialising innovation. Several countries are on the right track,
landing ‘above the curve’ compared to others, but it is clear that even the top performers
still need to address their weaknesses, in order to effectively support cleantech
companies right through their later stages of development.
It is worth telling the tale of countries that are disproportionately producing innovative
start-ups compared to their economic size, at a time when technological breakthroughs
are difficult to size to true multi-national scale (with only a few such case studies today).
This report can provide valuable insight for policy makers, entrepreneurs, investors and
industry actors alike who are interested to understand the global landscape of cleantech
innovation, and to gain inspiration from various archetypes in different parts of the
world. We hope that this study will challenge you to facilitate discussion on supporting
the next stage of cleantech innovation in your respective countries.
We hope you find it thought provoking.
Richard Youngman Michele Parad
MD Europe & Asia, Cleantech Group Senior Analyst, Cleantech Group
June 2014
6 WHO. “Air Quality and Health.” Media Centre, September 2011.
7 Data from Cleantech Group’s i3 connect platform

The Global Cleantech Story: Evolution
Originally thought of as a venture capital investment niche theme, cleantech is
growing up – and now permeates all realms of the economy, impacting industries as
diverse as ICT, Healthcare, Food, Electronics, Chemicals and Retail. The term has
been used interchangeably with ‘resource innovation’, ‘industrial efficiency’,
‘sustainable technology’, but all essentially have the same meaning – doing more
with less (e.g. fewer materials, less energy expenditure, reduced water availability),
while making money doing so.8 For a time, it seemed like cleantech was associated
almost exclusively with the energy realm (renewable energy, energy efficiency), but
its true and wider meaning is now proliferating, increasingly linked to solving ever
more prominent world challenges – such as clean water availability, sustainable food
sourcing, land and air pollution, and low carbon transportation. Cleantech venture
capital is still primarily made up of energy-related technologies (51 percent in 2013),
though much less so compared to 77 percent in 2010, and much more of the energy
element is around efficiencies, as opposed to renewables generation. This is partially
explained by other cleantech sectors gaining favour (as shown in Figure 1 below), as
well as a ‘post bubble’ landscape for renewables (especially solar), in which many
venture capital investors have pulled out since the hype and height of stimulus
spending in 2008, in addition to some high-profile bankruptcies in the U.S. and
Europe.
Figure 1: Global Venture and Growth Equity Investment in Cleantech companies, 2008 - 2013
The other clear explanation for less venture stage investment in renewable areas like
solar and wind is simply that they have ‘grown up.’ Production costs have decreased
to an unprecedented level, making unsubsidized grid parity a very real prospect for a
number of countries (already 19 countries have reached grid parity). For this reason,
the better measure of renewables’ growth trajectory is in deployment statistics: for
example, renewable energy accounted for over half of the new electricity-generating
capacity added globally in 20129 and by 2021, global cumulative installed solar PV
capacity is forecasted to surpass 700GW; 7 times today’s capacity.10 Just like the
8 Nuclear and fossil fuels have been excluded from any calculations in the index.
9 IPCC WGIII on Mitigation, April 2014
10 CleanEdge Clean Energy Trends Report 2014
€8 bn
€7 bn
€6 bn
€5 bn
€4 bn
€3 bn
€2 bn
€1 bn
Other Cleantech
Water & Wastewater
Transportation
Smart Grid
Recycling & Waste
Air
Agriculture & Forestry
Advanced Materials
Fuel Cells & Hydrogen
Energy Storage
Energy Efficiency
Renewables
2008 2009 2010 2011 2012 2013
*Includes seed, series A, series B, growth equity SOURCE: CLEANTECH GROUP’S I3 CONNECT PLATFORM

9
electronics industry, solar and wind power companies are driving prices sharply
downwards, and will make conventional fuels a less attractive proposition in the
future. For this reason, annual global project finance investment in renewables is
projected to reach $400 to $500 billion by 2020.11 Some sovereign wealth funds,
university endowments and other institutional investors are already divesting from
fossil fuel stocks, citing both moral (the danger they place on rising CO2 levels), and
financial reasons, given their potential to be over-valued assets in the long run.12 The
medium to long term risks of only holding coal, oil, gas and nuclear in global energy
portfolios are no longer being ignored, as over 119 countries across the globe have
enacted targets for renewables supply by 2020, 2030, and 2050.13 Further, several
countries are considering reducing public expenditure on subsidized fossil fuels to
‘level the playing field.’ High renewables scenarios have also gained credibility over
recent years (with projections of 50-95 percent energy share of renewables by 2050
not uncommon), with Denmark the early pioneer, setting a 100 percent renewables
target by 2050.14
Just a decade ago, cleantech was primarily associated with small startups. Now,
sales of products from across the aggregated clean technology portfolio will rival
the oil and gas equipment market by 2015, by which time the market size is forecast
to be between $330 and $390 billion.15 Already, we see evidence of emergent,
well-branded, companies seeking to lock in dominant positions in the changing
energy world – pioneers today include Tesla (the U.S. luxury electric vehicle maker),
Hanergy (the Chinese developer of hydro, solar and wind power projects) and Suzlon
(Indian manufacturer of wind power turbines). Though they have had their fair share
of ups and downs, public markets have also opened up to clean technology funds,
with an increasing presence of clean energy and water indices (e.g. Cleantech Group’s
Cleantech Index (CTIUS), S&P Global Clean Energy Index (ICLN), China Cleantech
Index (CCTI), WilderHill New Energy Global Innovation Index (NEX), Powershares
Global Water (PIO)).
Large multinational corporations are paying attention too – both in watching
for signals of future threat from upcoming SME’s, and in investigating potential
technology synergies, or licensing, outsourcing, and supply relationships which they
can leverage with some of these innovative cleantech SMEs. Corporations that are
eager to keep their product offering up to date with the latest innovation are also
making a number of acquisitions. Recent headlines (from 2013-14) in this regard
include Samsung’s acquisition of NovaLED (the developer of organic LEDs and
organic solar cells), Google’s acquisition of Nest (the smart thermostat company) and
LG Chem’s acquisition of NanoH2O (the developer of reverse-osmosis membranes
for desalination). A distinctive trend of the past three years, has been the increase of
Asian corporations making international acquisitions; examples include Hanwha’s
acquisition of Qcells, Wanxiang Group’s acquisitions of Fisker Automotive and A123
systems, and Hanergy’s buying spree of thin-film solar companies Alta Devices,
MiaSole and Solibro to name a few.
11 Global Trends in Renewable Energy Investment, BNEF and UNEP, 2013
12 Carbon Tracker Initiative, “Unburnable Carbon: Are the Worlds’s Financial Markets Carrying a Carbon Bubble?,” 2012
13 Ren21, Renewables Global Future Report 2013, p17
14 Danish Climate and Energy Policy (http://www.ens.dk/en/policy/danish-climate-energy-policy)
15 Roland Berger & WWF, Clean Energy Living Planet 2012

Research Context
Like other innovation areas, cleantech seeks to disrupt status quo business models
and leverage on-going global and local trends in order to better the lives of millions.
However, the reality remains that a very small percentage of companies succeed with
approximately 75 percent of start-ups failing.16 Success is hard to come by, given
that there are many complex factors which must coalesce at the right time. Today’s
entrepreneurs are often hindered by a lack of access to the resources essential
to move beyond ‘the valley of death’ - the point just before a company’s product
or service reaches market commercialisation and the company runs out of cash.
Entrepreneurs are affected by the dynamics attributable to the country or region in
which they reside, for example, 1) individuals’ knowledge and credentials for starting
a business - depending upon education and training available; 2) market openness,
regulation, and available financial support and; 3) cultural norms and prestige of an
entrepreneurial career (does the media pay attention to entrepreneurs? how does a
society perceive failure?).17
Moreover, start-ups cannot achieve their goals without the help of private and public
actors, and the right mix of market forces, environmental and innovation policies,
and access to key networks. Investors are attracted almost exclusively to opportunity
sets in specific geographies, where start-ups have access to all the aforementioned
resources as well as favourable market conditions - a self-fulfilling cycle. Cleantech
start-ups that require large amounts of capital to scale will need to settle in
geographies that are known to attract private and public capital and where they can
access knowledge centers like universities, business accelerators, or open-innovation
labs at an early stage of development, or channel partners and access to customers
at a later stage. Countries that understand this reality and are able to act on it by
facilitating systems that connect start-ups with multiple avenues for growth will
likely increase the success rates of their local start-ups and spur economic growth.
The Global Cleantech Innovation Index seeks to measure, as closely as possible, the
involvement of various actors to not only ‘push’ technology supply but promote the
‘pull’ of market demand.18 This report provides a framework to assess the entire
lifecycle of cleantech innovation (from the lab to mass production), so that it can
serve as a useful provider of lead signals for years to come.
Measuring the drivers of cleantech innovation is certainly not straightforward, given
that regulatory frameworks can wax and wane, outside market and geopolitical
forces can vary, and unexpected competition can blindside progress made in a
particular geography. We must consider, for example, that the global macroeconomic
picture presented in the 2012 index (which was based on data from 2008 – 2011),
is different from that of 2014 (where the data sets are from 2010 – 2013) in which
the knock-on effects of the financial crisis and other developments (the discovery of
more shale gas hubs, for example) have played a more prominent role. On the other
hand, some countries have proven to be more resilient to adverse conditions, either
substituting capital ‘holes’ with public support, or fostering momentum for cleantech
such that local investors and support groups have come together more than ever.
Other countries have benefited from different players that have taken part in their
local ecosystem – i.e. private wealth, sovereign wealth funds, government backed
ventures or incubators/accelerators which are able to fill in financial gaps.
16 According to research by Harvard Business School professor Shikhar Ghosh
17 Global Entrepreneurship Monitor 2013
18 See Cleantech Innovation Index 2012, p11

11
The Global Cleantech Innovation Index
Methodology
In this second edition of the Global Cleantech Innovation Index, we have used the
same methodological approach as the first edition,19 drawing from the same mixture
of sources and indicators, wherever possible. There have been a few exceptions.20
The overall cleantech innovation index score for each country is based on the
average between inputs to innovation and outputs of innovation. By definition,
“inputs” correspond to the creation of innovation (the development of technology
supply) and “outputs” relate to the country’s ability to commercialise innovation
(the creation of market demand). Each of these inputs and outputs are determined
by four equally weighted pillars as shown on the next page. The four pillars are built
from a total of 15 indicators, drawn from both third party research and Cleantech
Group’s proprietary data. The raw data for each indicator was normalised to allow
for comparisons on a common scale and extreme outliers were controlled for,
by using a standard deviation method (capping at 3 deviations from the average
within each sub-factor). The majority of indicators were analysed from a ‘per GDP
purchase power parity’21 basis so as to account for relative accomplishment by size of
economy, with the exception of renewable energy consumption (which we calculated
as a percent of countries’ primary energy consumption) and employment (which felt
appropriate to measure on a per total labour force basis).
The scope of the study covered 40 countries including all of the G20. In addition to
the 38 countries from the 2012 index, we also included Singapore and New Zealand,
due to more expensive data sets becoming available and the countries’ high relevance
in looking at emerging cleantech innovation companies internationally.
We attempted to include the Philippines, but data availability did not allow for
this. Based on feedback from the 2012 edition, we also looked at the possibilities of
including indicators on private R&D, energy efficiency, and private bank funding but
lacked appropriate data to include such measures (see Appendix A).
19 See Global Cleantech Innovation Index 2012
20 See Appendix A for more details on the indicators and sources used
21 World Bank 2012 indicators used for GDP and population
© NATIONAL GEOGRAPHIC STOCK / SARAH LEEN / WWF

Framework of the Global Cleantech Innovation Index
The following sources of data were drawn upon to populate
the above framework and to derive the scores:
INSEAD, Global Innovation Index, 2013
Global Entrepreneurship Research Association (GERA), Global Entrepreneurship Monitor, 2013
The Pew Charitable Trusts, Who’s Winning the Clean Energy Race? 2013
IEA, Energy R&D database, 2011
IEA, Tracking Clean Energy Progress, 2013
Ernst & Young, Renewable Energy Country Attractiveness Index, 2013
Cleantech Group, Global Cleantech 100, 2011 - 2013
OECD, Patent Cooperation Treaty database, 2011
WWF and Roland Berger, Clean Economy, Living Planet, 2012
UK BIS, Low Carbon and Environmental Goods and Services, 2011/12
BP, Statistical Review of World Energy, 2013
Cleantech Group, FTSE, Ardour and WilderHill indices of publicly traded cleantech companies, 2013
Cleantech Group i3 data, 2011 - 2013
World Bank indicators, 2012
Inputs to
Innovation
A: General
Innovation
Drivers
• General innovation
inputs
• Entrepreneurial
culture
B: Cleantech-
Specific
Innovation
Drivers
• Government policies
• Public R&D spending
• Access to
private finance
• Infrastructure
for renewables
• Cleantech industry
organsiations
Outputs of
Innovation
C: Evidence
of Emerging
Cleantech
Innovation
• Early-stage private
investment
• High impact
companies
• Environmental
patents
D: Evidence of
Commercialised
Cleantech
Innovation
• Company revenues
• Renewable
energy consumption
• Late-stage
investment and exits
• Listed cleantech
companies
• Employees

FOR COMPARISON, THE INDEX AND INDICATORS HAVE A MEAN SCORE OF 2.11 – 2.12, SEE APPENDIX D FOR PROFILES OF INDIVIDUAL COUNTRIES.
13
Global Cleantech Innovation Index 2014 Factor Table
2014
Rank Country
2014
Score
Inputs to
Innovation
Outputs of
Innovation
General
Innovation
Drivers
Cleantech-Specific
Innovation
Drivers
Evidence of
Emerging Cleantech
Innovation
Evidence of
Commercialised
Cleantech Innovation
1 Israel 4,34 2,87 5,81 2,86 2,88 8,92 2,70
2 Finland 4,04 2,90 5,18 2,83 2,97 7,59 2,77
3 USA 3,67 3,13 4,21 3,29 2,98 6,41 2,01
4 Sweden 3,55 2,98 4,12 3,59 2,37 5,56 2,68
5 Denmark 3,45 3,13 3,76 3,15 3,12 3,23 4,29
6 UK 2,84 2,77 2,91 2,82 2,71 3,87 1,95
7 Canada 2,83 2,84 2,83 3,34 2,34 3,34 2,32
8 Switzerland 2,80 2,90 2,69 3,38 2,42 3,33 2,06
9 Germany 2,78 2,56 3,00 2,26 2,87 3,39 2,61
10 Ireland 2,73 2,34 3,12 2,50 2,18 3,92 2,32
11 Netherlands 2,64 2,57 2,71 2,84 2,31 3,84 1,58
12 Japan 2,46 1,92 3,00 1,37 2,47 4,51 1,49
13 South Korea 2,45 2,40 2,49 3,00 1,81 3,12 1,86
14 Norway 2,41 2,52 2,30 3,11 1,93 1,78 2,82
15 France 2,38 2,39 2,36 1,83 2,94 3,06 1,67
16 Austria 2,34 2,31 2,36 2,35 2,26 2,35 2,38
17 Belgium 2,23 2,34 2,11 2,04 2,65 2,13 2,09
18 New Zealand 2,22 2,30 2,13 2,64 1,97 1,26 3,00
19 China 2,19 2,50 1,89 2,26 2,74 0,92 2,85
20 Singapore 2,14 2,47 1,82 2,52 2,41 1,21 2,42
21 India 1,95 1,92 1,98 1,39 2,44 2,10 1,87
22 Australia 1,94 2,52 1,36 2,54 2,49 1,12 1,60
23 Hungary 1,88 2,13 1,62 1,55 2,71 1,49 1,75
24 Portugal 1,80 2,00 1,61 1,40 2,60 0,85 2,37
25 Brazil 1,79 1,90 1,67 1,95 1,85 0,31 3,03
26 Spain 1,70 1,60 1,80 1,45 1,74 0,80 2,80
27 Italy 1,54 1,78 1,31 1,31 2,26 0,95 1,66
28 Slovenia 1,50 1,52 1,49 1,37 1,67 1,00 1,98
29 South Africa 1,37 1,62 1,11 1,43 1,82 0,26 1,96
30 Czech Republic 1,35 1,57 1,13 1,65 1,48 0,30 1,96
31 Turkey 1,32 1,93 0,72 1,69 2,16 0,10 1,33
32 Argentina 1,30 1,44 1,16 1,73 1,14 0,05 2,27
33 Saudi Arabia 1,26 1,51 1,02 1,93 1,09 0,12 1,91
34 Indonesia 1,19 1,65 0,74 1,90 1,40 0,01 1,47
35 Romania 1,19 1,36 1,01 1,37 1,35 0,07 1,96
36 Mexico 1,15 1,57 0,74 1,95 1,19 0,04 1,44
37 Poland 1,03 1,27 0,79 1,25 1,29 0,15 1,43
38 Bulgaria 1,01 1,22 0,81 1,17 1,27 0,20 1,42
39 Greece 0,97 0,78 1,17 0,61 0,94 0,55 1,79
40 Russia 0,81 1,12 0,50 0,71 1,52 0,16 0,84

Results and Analysis
Figure 2: Cleantech Countries Innovation Index
Israel leads the 2014 Global Cleantech Innovation Index, with Finland following
closely behind. The characteristics of the top performers highlight that there is
no single pathway for creating a cleantech innovative economy – countries vary
in how they score in all the sub-factors and indicators (as you will find in the
following sections). It is also important to note that no one country excelled in all
four indicators – Israel, for example, far exceeded others in the emerging cleantech
innovation factor, however dropped to 8th place in the ‘evidence of commercialised
innovation’ factor – confirming that there is room for improvement in even the
most inspiring countries. In fact, all top 10 countries were relatively good at
early stage cleantech development but share a common challenge in increasing
commercialisation rates. One relative outperformer on commercialisation, however,
is Denmark (see page 25).
While there is a mixture of both small (e.g. Finland, Ireland) and large economies
(e.g. USA, Germany) at the top, there is, on average, a notable divide in the index
between the cleantech innovators and their followers, in terms of country income.
The top half of the index has twice the average GDP as the bottom half ($1 trillion
more). This demonstrates that there is a correlation between greater wealth and the
development of innovation capital in the cleantech sector. However, there are some
exceptions: Russia and Italy lag behind (considering the size of their economies)
and Australia has fallen behind the curve on a few metrics (see Figure 3) such as
environmental patents and early stage cleantech capital, despite its attractive project
finance market.
Nordic countries were high performers in the index, with Finland, Sweden, Denmark
placing in the top five and Norway following closely behind. Denmark, which topped
the list in 2012, continues to be a leader on many fronts, however the country saw a
drop in venture investments, patent filings and number of cleantech specific funds,
while Finland saw growth in those areas.
Some ‘emerging economies’ (in old parlance) have outperformed others. For
example, China took 19th place this year, due to its high availability of expansion
capital and high sales generation from manufacturing of solar cells and other
cleantech products. Brazil also made it into the top 25, with a mixture of good inputs
and outputs, notably achieving a high perception of entrepreneurial opportunities,
and a high consumption of renewables as a share of their total energy mix.
5
4
3
2
1
0

Outputs of Innovaiton
Israel
0,50 1,00 1,50 2,00 2,50 3,00 3,50
15
Korea, which came in 13th in the index, has identified cleantech as the ‘next engine
for growth’ and is committed to ambitious 2030 objectives: 20 percent renewables
target, 1 million new green jobs, and a $24 billion plan to establish nationwide smart
grid. As such, Korea may be expected to rival the top ten of the index in future years.
France, which is currently dominant in seed and early-stage cleantech venture
capital (representing 20 – 25 percent of deals in Europe in 2013) came in 15th this
year. The country did not make the top 10 largely because of its average marks on
general innovation drivers and entrepreneurial attitudes. France shows signs of PE,
M&A, and IPO action22; however, amidst slow economic growth, cleantech company
revenues and manufacturing sales are relatively low as is the country’s renewables
consumption. We might anticipate, however, that in a 2016 index, France will have
progressed further given recent signals from 2012 to 2014 data.
Russia showed the weakest evidence of inputs and outputs into cleantech innovation,
while Greece also joins the bottom three this year, in part due to the Government’s
harsh austerity measures and its effects on the renewables industry (retroactively
taxing consumers on renewable power in 2012 and 2013). Saudi Arabia remains
in the bottom five. However, with its $100 billion plan to source 41,000 MW of
solar projects in the next two decades, the country is poised to shift its position
substantially in the years ahead.
When comparing aggregated scores for the inputs to innovation and outputs of
innovation sub-indices, it can be seen which countries are capitalising on their
inputs more efficiently. As demonstrated below in Figure 3, Israel and Finland
perform far above the curve while Australia and Turkey have perhaps not reached
their full potential. Most countries are in the 1 - 3 range on ‘outputs to innovation,’
demonstrating that more progress remains to be made by all countries.
6,00
5,00
4,00
3,00
2,00
1,00
22 Please see Appendix C for definitions of PE, M&A and IPO.
Inputs to Innovation
Figure 3: Cleantech Innovation Efficiency
Finland
Australia
Turkey
SOURCE: CLEANTECH GROUP ANALYSIS

Country Archetypes
Cleantech Start-up Generators:
‘Cleantech start-up generators’ is a term we use to describe countries that are
extremely good at developing the right set of innovation tools for their local start-ups,
combined with a set of stimuli to make the cleantech theme attractive to
entrepreneurs. These countries tend to agree on the long-term necessity of investing
in clean technologies and are gearing up in various ways to ensure future wealth and
prosperity for their economies. The cleantech start-up generators are not however
necessarily strong commercialisers in terms of rapidly scaling their businesses.
These countries have to overcome the challenges of having relatively small domestic
markets compared to larger economies like Brazil, India and China (which are strong
cleantech commercialisers).
Figure 4: ‘Pureplayers’ in the Emerging Cleantech Innovation Factor:
Evidence of
Commer-cialised
Innovation
Israel is able to compensate for its
small domestic market, sensitive geo-political
setting, and water constraint
by drawing the attention of both local
and foreign investors to bet on its pool of
high-tech entrepreneurs. The country is
the cleantech innovation archetype for
both embedding entrepreneurial spirit
into its educational system and into its
society’s everyday norms as well as for
predisposing its start-ups to resource
innovation – as a survival mechanism to
overcome resource constraints and energy
General
Innovation
Drivers
Israel
Ireland
Finland
Cleantech-specific
Innovation
Drivers
Evidence of
Emerging
Cleantech
Innovation
dependency. Relative to the size of its economy, Israel has had a disproportionate
number of cleantech companies (19 in total) voted by the cleantech community into
the shortlist of the Global Cleantech 100 index23 over the past 3 years. Examples of
such innovators include Kaiima (the developer of proprietary non-GMO genomic-based
breeding technologies) and Emefcy (the developer of Electrogenic Bioreactors
(EBR) that treat industrial wastewater).
Finland’s harsh climate, lack of fossil fuel resources and recently-sagging ICT
industry (with Nokia facing high competition from Apple products),24 has propelled
the country towards creating new employment prospects in cleantech-related
industrial activities. Finnish cleantech businesses currently employ around 50,000
people, with 40,000 new jobs expected to be created by 2020 (a significant amount
given its population of only 5 million).25 Companies like MetGen are innovating
around the country’s well known pulp and paper industry, and many others (over
50 percent) are focused on Energy Efficiency solutions (leveraging their IT human
capital).
Ireland enjoys strong institutions, a vibrant science, engineering and ICT
workforce, and market sophistication – with a good inflow of Foreign Direct
Investment (FDI). Ireland anticipates that cleantech jobs will grow to 80,000
by 2020.26 The country has the advantage of vast natural resources specifically
in tidal/wave energy, wind energy and various feedstocks for the production of
23 To find out about the Cleantech 100 methodology: http://www.cleantech.com/global-cleantech-100/
24 Is Cleantech Finland’s Next Nokia? Greentechmedia.com
25 About Cleantech Finland
26 According to the Greenway (Dublin’s Cleantech Cluster)

17
biofuels. Ireland is investing heavily in their renewables capacity, with pioneers
like Mainstream Renewable Power planning to build a 138MW Jeffrey’s Bay wind
farm. Ireland has also held a number of initiatives through the Greenway (Dublin’s
Cleantech Cluster) over the past few years, to encourage the growth of its cleantech
sector both locally and internationally.
Strong Cleantech Commercialisers:
Countries that are strong commercialisers of cleantech today (as shown in Figure
5), tend to have strong economic and social pressures to procure clean technology
solutions and products as they face pressure to address more visible environmental
and resource problems, compared to countries that have 100 percent of their
population with access to electricity, water, food etc. These countries are not driven
simply by moral commitments to address climate change but also by the urgency to
deploy clean technologies to solve mounting public health and environmental issues.
Figure 5: Countries with Evidence of Commercialisation Rates:
China in particular has an impetus to
speed up investment in cleantech so as
to curb the effects of air pollution in the
country. The Government’s strategy to
deploy cleantech across its economy has
provided start-ups with a burgeoning
market. Chinese cleantech companies
enjoy preferential corporate tax rates
and are offered easy access to loans at
low interest rates through the country’s
state-owned development bank. The fact
that there were over 55 Chinese publicly
listed cleantech companies on major
General
Innovation
Drivers
Brazil
India
China
Cleantech-specific
Innovation
Drivers
Evidence of
Emerging
Cleantech
Innovation
Evidence of
Commer-cialised
Innovation
international stock exchanges in 2013 (more than any other country in the world) is
a testament to the sector’s momentum and success in the country. Start-ups across
the globe are now seeking access to the Chinese market, although they face greater
hurdles (cultural challenges and unfamiliar business climates) than their local
competitors.
India is facing rapid urbanization, a rising energy deficit and growing industries
which are fast-depleting the country’s natural resources. As a result, India expects
to spend almost $30 billion on renewables27 and $1.7 trillion on energy supply
infrastructure by 2035.28 In the 12th Five year plan period (2012-17), the government
intends to add a grid interactive renewable capacity of about 30,000 MW. India is
also offering very attractive foreign investment policies for environmental equipment
and services companies. As a result, the country is emerging as one of the fastest
growing supply chain hubs for both local and international manufacturers of
renewable technology (i.e. wind blades, convertors, towers, etc.). A good number of
private equity deals have also surfaced in India over the past few years (e.g. Goldman
Sachs’ $40 billion commitment to ReNew Windpower, the developer of wind energy
projects).29
Brazil is a resource-rich nation (with the 4th largest agricultural sector, for
example), with over 200 million potential customers to serve. The country benefits
from an old agri-industrial society, vast amounts of arable land, and is now a
leading producer and exporter of advanced biofuels following the establishment
27 Ren21, Renewables Global Futures Report, p 35
28 IEA, South East Asia Energy Outlook, September 2013
29 Cleantech Handbook India, Cleantech Finland and FinPro

of the Bonsucro sustainability standard.30 Brazilian biofuels developers have been
scaling up through partnerships with international players – for example, Granbio’s
partnership with Italy’s Beta Renewables, or Cosan’s joint venture with Shell to
produce ethanol.31 What’s more, Amyris, among other American and European
biofuels companies, is setting up shop in Brazil to get a slice of the market –
demonstrating the traction in this sector. The Government is also promoting the
cleantech industry through its $66 billion infrastructure stimulus package, its $16
billion ‘Plano Inovar’ towards agricultural technologies and its $200 million fund for
sustainable innovation through the Brazilian Development Bank (BNDES).32
Cleantech Innovation Laggards:
The ‘Laggards’ describe countries that on a relative basis are creating fewer drivers
for cleantech generation and commercialisation. However over the last few years,
even the countries that rank at the bottom of the index have demonstrated an in-creased
interest in developing enabling policies or support systems to foster sustain-able
innovation.
Russia, despite its sizeable population and vast natural resources (it is one of the
largest producers of oil and gas in the world), the country has a very low level of
energy efficiency, requiring several times more energy per GDP than its western
European counterparts. As of yet, Russia has failed to capitalize on its available
cleantech resources, and continues to focus on its conventional energy supply.
Nonetheless, a few pockets of new developments in the country could signal potential
for cleantech startup development. The Wermuth-Tatarstan Fund, setup in 2012, is
the first ever venture cleantech fund dedicated to investing in the Russian market
- specifically in companies (local or foreign) with a manufacturing base 1000km
from Kazan. The Skolkovo foundation also initiated the first of its kind science
and technology innovation center in Skolkovo (a suburb of Moscow) with various
investors, incubators and cleantech companies residing within the ecosystem.
Skolkovo includes an Energy Efficient Technologies cluster which connects over 80
companies.
Saudi Arabia, the oil superpower has not yet tapped into its vast solar potential,
given that the country receives twice the amount of sunshine of anywhere in Europe.
However, it has more recently become interested in making ‘smart’ use of its deserts
for building photovoltaic and concentrated solar power plants. In 2012, the King
Abdullah City for Atomic and Renewable Energy (KACARE) set in motion a $100
billion plan to install more than 41 GW of solar to enable the country to get 20
percent of its electricity from solar energy by 2030. In 2012, the Mecca Municipality
also put together the first scheme in the country to install a 100MW solar power
plant. This is part of the country’s larger strategy to preserve more of its oil assets for
export, which represent 86 percent of its current total revenue.33
30 Certified Brazilian sugarcane ethanol must now meet the required minimum 50 percent reduction in full lifecycle
greenhouse gas (GHG) emissions. http://wwf.panda.org/?200720/Sweet-news-for-environment-as-sustainable-sugar-
comes-to-market
31 Clean and Cool Mission Brazil 2013
32 Seven ways sustainable businesses can break into Brazil, The Guardian
33 Mecca Seeks to Lead Saudi Arabia’s Solar Energy Expansion, Bloomberg

19
A: General Innovation Drivers
General innovation drivers are the general conditions that facilitate the
development of innovative start-ups in a country. It is not sufficient to look only at
external parameters (i.e. R&D expenditures, patents, or academic publications) to
judge a country’s supportive structure for entrepreneurs. Rather, it is important to
also account for the culture and psychology of individuals within a society to
determine the likelihood of entrepreneurial success.34 This factor sources from both
the INSEAD Global Innovation Index and the Global Entrepreneurship Monitor, in
order to best measure the underlying economic and social structures which shape
countries’ innovation systems.
Figure 6: General Innovation Drivers
4
3
2
1
It is interesting to note that the entrepreneurs in the top performing countries in
the ‘General Innovation’ category (Sweden, Switzerland, Canada and USA), are less
driven by ‘necessity motives’ for starting a business (i.e. because of unemployment),
but rather are inspired by the intrinsic value of entrepreneurship – the perceived
opportunity for a better income and/or independence.35 Therefore, what makes these
countries ‘top performers’, is that they have been diligently investing in making en-trepreneurship
attractive, both by giving individuals the necessary training, advice,
or connections to ensure their success, and also by greatly rewarding them for their
endeavours.
However, there is no one ‘Silicon Valley way’ to promote entrepreneurship, and the
top countries have all leveraged their local strengths to produce good results. The
USA and Canada perform well based on having highly ranked universities, high
venture capital investment per GDP, and a large number of joint ventures or strategic
alliances established. On the other hand, Denmark and Norway excel due to their
stable political and regulatory environments, ease of starting a business and resolv-ing
insolvency combined with solid human capital and R&D availability.
Switzerland and Norway also rank high in Yale’s environmental performance index
(EPI),36 a sub-factor used by INSEAD to measure ecologically sustainable infra-structure.
Good energy and transportation infrastructure ultimately helps to create
productive and efficient societies, thus inspiring overall better innovation systems.
Norway, for example, has built out a significant network of EV charging stations
across the country and has accelerated electric vehicle penetration beyond any coun-
34 INSEAD Global Innovation Index 2013
35 Global Entrepreneurship Monitor, p32
36 Environmental Performance Index (EPI) ranks how well countries perform in two policy areas:
protection of human health from environmental harm and protection of ecosystems.
0

try in the world, with electric vehicles taking 12 percent market share of total car
sales (compared to less than 1 percent in the U.S. for example).37
Emerging markets like Mexico and Indonesia perform better in the general in-novation
metric, relative to other factors, with both countries climbing rapidly up
INSEAD’s Global Innovation Index38 (ranked 16 and 15 respectively). Mexico has
enacted a number of policies aimed to boost entrepreneurship (including new R&D
initiatives, and tax incentives for SMEs). The country also recently approved an ener-gy
reform which nationalizes the energy industry, and opens up possibilities for new
technologies to be deployed.39 In Indonesia, the World Bank is implementing educa-tion,
training and research programs that aim to improve the country’s science and
technology capacity.40 According to the Global Entrepreneurship Monitor, Indonesia
beats all other economies in early-stage entrepreneurial activity followed by other
emerging markets of Turkey and Brazil. Ultimately the cleantech theme should reap
the benefits of general advances in innovation support systems, although the impact
of current efforts may take a while to realize.
37 Record: Norway Electric Car Sales Hit 12 percent Of Total Car Sales, Cleantechnica
38 INSEAD Global Innovation Index 2013
39 Mexico’s Energy Reform
40 World Bank Supports Move to Accelerate Indonesia’s Economic Growth
© THOMAS HAUGERSVEEN / WWF-NORWAY

21
B: Cleantech-Specific Innovation drivers
Cleantech-specific innovation drivers help to promote market adoption of clean
technologies and address barriers to entry for the industry. Both public and private
driven support are important considerations, including cleantech friendly
government policies, cleantech public R&D spending, development of national
infrastructures for renewable energy, availability of private funding and access to
cleantech clusters and other organisations.41
Figure 7: Cleantech-Specific Innovation Drivers
4
3
2
1
More than other innovation themes, cleantech requires government support, not
only to scale up new technologies, but also in many cases to help create entirely
new markets. The additional market risk which cleantech ventures carry means
that regulatory frameworks and financial backing can be crucial to their survival.
Cleantech friendly policies include, for example, the establishment of a carbon
market, auto efficiency standards, feed-in tariffs and grant funds, green bonds and
other government financial instruments. Grants in particular have continued to play
a part in funding global cleantech, with budgets allocated to specific technologies
that fulfil countries’ targets and agendas (e.g. Japan’s $300 million grant for battery
storage system systems to help integrate renewables into the grid).
Equally important to cleantech are the private backers, who seem to concentrate
their funding in very specific geographies. In the past few years, there have been
more cleantech funds set up to invest in China than any other part of the world,
even though the U.S. still attracts the largest amount of capital. This is because
investment rounds tend to be smaller in China, although local investors put down
capital more frequently. Examples of active local funders include names such as
Origo Partners, Tsing Capital, and Shenzhen Capital Group. However, foreign
investors are increasingly seeking to participate in the Chinese market opportunity
for innovation. For example, in February 2013 U.S. investor Kleiner Perkins, through
its China office, partnered with Hong Kong investor CLSA Capital Partners to invest
in Scinor Technology (the water membrane manufacturer).
41 Sources include The Pew Charitable Trusts Clean Energy Race Report; IEA RD&D data; Ernst & Young Renewable
Energy Country Attractiveness Index; and Cleantech Group www.i3connect.com data
0

Outperformers in Cleantech Drivers:
Countries that outperform on the cleantech specific innovation drivers measure have
excelled in several sub-factors (though not all) – generating their own mix of public
and private resources to help facilitate the economic success of cleantech companies.
Finland and Denmark have the largest public cleantech R&D budgets42 relative
to the size of their economies, combined with a high number of supportive cleantech
clusters and government policies.43 As an example, the Finnish Funding Agency
for Innovation – Tekes – is partnering with MOST, China’s Ministry of Science and
Technology, in 2014 on joint calls for proposals for cleantech-related R&D projects.44
Such opportunities are critical value add to start-ups – allowing them to bridge the
‘valley of death’,45 and make efficiency and cost improvements to their products or
services, or develop their manufacturing capacity both locally and abroad. Finland
and Denmark also succeed at attracting a high number of local investors46 as well as
established government supporters (such as Finland’s innovation fund SITRA and
Denmark’s Innovationsfonden).
France has a high number of early stage investors securing new cleantech funds
(including Demeter Partners, Emertec, and Idinvest Partners) through the support
of the government’s €600 million National Seed Money Fund scheme, as well as a
‘Investments in the Future’ (Investissements d’Avenir) programme which secured
€1 billion for clean energy companies starting in 2010.47 In addition, there are a
number of other beneficial government policies coming to the forefront. For example,
France currently has a Government ban on shale gas exploration (on environmental
grounds). France also came fifth in the renewable attractiveness index, currently
doubling its targets for installed solar capacity. The Government pledged to cut
reliance on nuclear power to 50 percent by 2025 (down from 78 percent in 2013),
with the default focus on shifting towards renewable energy, so as to meet their 23
percent target by 2020.48
USA leads particularly in private sector metrics, with U.S. start-ups consistently
attracting capital from both local and international investors. On the other hand,
a lack of energy or environmental consistency with regard to federal policy has led
to a degree of uncertainty on the future of the public sector’s role in promoting a
renewable and low-carbon future. Nonetheless, the Obama administration has put
forth a climate plan that proposed a cut in carbon emissions from power plants of
30 percent by 2030.49 The U.S. has also promoted improved fuel economy standards
for its vehicle fleet (hybrids, powertrains, CNG, etc.) and extended tax credits for
the wind sector despite the country’s intransigent political climate. With regard to
renewable energy attractiveness, the U.S. still maintains the top spot on the Ernst
& Young RCAI index, although China may overtake it, given how fast they are
accelerating deployment efforts. On the other hand, the U.S. pledged to increase
its FY14 budget for clean energy R&D by 30 percent to $7.9 billion,50 at least
demonstrating that the country is still serious about promoting a green agenda.
42 More than 40 percent of Finnish public R&D goes to the energy and environment sector
43 For example, Copenhagen has set the ambitious goal of becoming carbon neutral by 2025, with initiatives across
transport, buildings and energy production.
44 Tekes – MOST call for proposals
45 Refers to a time period when startups are cash strapped – usually just before they reach commercialisation
46 Example private investors include VNT management, Cleanech Invest, Finnvera, Finnish Industry Investment.
Examples in Denmark include BankInvest New Energy Solutions, Vaekstfonden, Northzone Ventures. For more
examples see: www.i3connect.com
47 Investissement d’Avenir – Les Programmes Energie
48 Ernst & Young Renewables Attractiveness Index
49 Taking Page From Health Care Act, Obama Climate Plan, New York Times, June 2, 2014
50 Ernst & Young, RECAI, August 2013

23
Germany continues to be a top renewables market, as the operator of one-third of
the world’s installed solar capacity, despite a rather un-sunny location. Nonetheless,
in early 2014, the German Government put together a reform package in which FITs
are replaced with a scheme that lays the groundwork for achieving a target of an 80
to 95 percent cut in carbon emissions. However, ongoing discussions as to concrete
details of this scheme are likely to result in a slowdown for renewables investment in
the short term.51 On the other hand, Germany has a substantial number of cleantech
funds per GDP, as well as some core supportive organizations such as the Fraunhofer
(the R&D institute) and High-Tech Gründerfonds (the early-stage fund) which means
the country will likely continue to drive cleantech innovation in the years to come.
C: Emerging Cleantech Innovation
Evidence of emerging cleantech innovation drivers determine the emergence and
early-stage progress of cleantech innovations and entrepreneurial cleantech
companies. This factor is made up of OECD records of environmental patents filed
under the Patent Cooperation Treaty; Cleantech Group data on cleantech venture
capital (VC); and records from the 2011-2013 Global Cleantech 100 lists, (Cleantech
Group’s annual ranking of the top 100 private cleantech companies globally).
Figure 8: Evidence of Emerging Cleantech Innovation
9
8
7
6
5
4
3
2
1
0
Overall, patent filings for the 40 countries have grown from 2008 to 2011 by nearly
100 percent which is a testament to the growth of sustainable innovation. The
top countries for environmental patents include USA (with a majority located in
California) and Japan (mostly surrounding areas of Tokyo and Osaka). However, on
a per GDP basis, South Korea comes out on top, with over 6672 patents filed in 2011
alone. The Korean Intellectual Property Office (KIPO) has put in place a fast track
program for green innovation (where patents have been approved in less than one
month), in order to get these technologies to market as quickly as possible. Similar
policies also exist in Canada, the UK and Israel. On the other hand, three of the G20
countries, Argentina, Mexico and Indonesia, have filed 70 times fewer environmental
51 Ernst & Young, RECAI, Issue 40, February 2014

patents by size of their GDP compared to the top five countries: Japan, Israel,
Sweden, Finland and South Korea.
The USA garners by far the most venture capital investment in cleantech, with
$5 billion allocated in 2013 alone. Moreover, multi-national corporations have
participated consistently in over 20 percent of deals in North America since 2011.52
Silicon Valley, in particular, is home to large enterprises (e.g. Google, Hewlett
Packard) and their proximity to start-ups in the area helps to facilitate investment
and partnership opportunities. On the other hand, countries with low levels of
venture capital per GDP include Japan, South Africa, Mexico and Russia. China
attracts an impressive amount in absolute terms ($304 million over the past 3 years),
but still has a way to go when its size is accounted for.
As was the case in the 2012 index, the standard deviation within the emerging
cleantech innovation factor was by far the highest of all factors, demonstrating a
clear divide between geographies leading in generating start-ups and their followers.
There are a few countries which have significantly raised their overall scores by
providing actual ‘proof’ of generating high quality emerging start-ups. These are
Israel, Finland, USA, and Ireland, which fare well (average or above average on all
factors) but are extreme in their performance on emerging cleantech innovation (as
described on page 15).
Other countries of note include Sweden and the UK, which demonstrated a high
density of Global Cleantech 100 companies (after Israel and Finland). Many of these
companies have benefited from their respective countries’ government agencies like
the Swedish Energy Agency and the UK Department of Energy and Climate Change
(DECC) which played roles in fostering innovation by providing grants for early stage
cleantech start-ups.
D: Commercialised Cleantech Innovation
Evidence of commercialised cleantech innovation measures the ability of a country
to scale-up cleantech innovations. This factor is derived from: cleantech
manufacturing value-added; cleantech company revenues; renewable energy
consumption data; cleantech late-stage private investment, M&A’s and IPOs; and the
number of publicly traded cleantech companies in major indices.53
Figure 9: Evidence of Commercialised Cleantech Innovation
52 European Cleantech Fundraising 2013-2014 Report, Cleantech Group and Georgieff Capital
53 Sources include WWF/Roland Berger Clean Energy, Living Planet; UK Department for Business Innovation &
Skills, Low Carbon and Environmental Goods and Services report; Ren21 Renewables 2013 Status Report; IRENA
Renewable Energy and Jobs; Cleantech Group Index (CTIUS), FTSE, Ardour and WilderHill indices and Cleantech
Group data: www.i3connect.com
5
4
3
2
1
0

25
Creating favourable conditions for companies at the later stage of development is
equally if not more important than the early stage. Determining the size of supply
chain activity and revenues generated from cleantech businesses is one way to
quantify economic activity and market traction for the sector. According to UK’s
Department of Business Innovation & Skills, the total worldwide sales from low
carbon and environmental goods and services were £3.4 billion (approximately $5.7
billion) in 2011/2012 a 3.8 percent annual increase over 2010/2011. The U.S. accounts
for 19.2 percent of the global total, followed by China (13 percent), Japan (6 percent),
India (6 percent) and Germany (4 percent).54
Commercialised cleantech innovation is spread across the globe as shown on the map
below: Denmark, China, Brazil, New Zealand, Norway perform well in this indicator
for various reasons.
Figure 10. Map of Commercialised Cleantech innovation scores
SOURCE: CLEANTECH GROUP ANALYSIS
Denmark comes out on top for cleantech value-added from manufacturing
(representing 3 percent of GDP), 55 and the largest number of publicly traded
cleantech companies considering the size of its economy. Key examples include
Novozymes, Vestas, the biotech and wind corporations respectively and Rockwool,
Grundfos and Danfoss – all strong in the energy efficiency space.
54 UK Department for Business Innovation & Skills, Low Carbon and Environmental Goods and Services report 2012
55 WWF Roland Berger, Clean Economy Living Planet, 2012
> 2.8
2.4 - 2.8
2.0 - 2.4
1.6 - 2.0
< 1.6
No data

China had the largest number of IPOs since 2011 (57 in total), as compared to next
in line - 22 IPOs in the U.S. The country generates the largest value (in absolute
terms) from cleantech manufacturing, even if renewable energy employment
represents less than 1 percent of its total 1.35 billion population. Meanwhile, India
derived $337 million in revenues from cleantech companies56 – the highest in
absolute terms after the USA and China, and a relatively high number of private
equity investments (though not as impressive as Denmark).
Over 45 percent and 39 percent of Brazil’s and New Zealand’s energy
consumption comes from renewable sources respectively. New Zealand already
has specialisation in forestry, horticulture, manufacturing and engineering which
are highly transferrable to areas of clean technology. New Zealand also has a high
renewables consumption, due largely to a period of aggressive hydro-electricity
development between 30 and 60 years ago, and the world’s highest geothermal
energy use per person. Notably, Sweden and Norway are also countries with a high
percentage of renewables in their energy portfolio (over 50 percent and 65 percent
respectively), though Norway is 97 percent concentrated in hydro power.57
Germany was also among the top commercialisation markets, with a long history
of feed in tariff support and high renewables consumption. Under the plan known as
Energiewende, or “energy change,” Germany has pronounced an end to its nuclear
program (partially attributable to the Fukushima disaster of 2011), as well as a
renewed focus on promoting renewables.58 Germany has the third largest number of
publicly listed companies (after the USA and China).
UK, despite the country’s many advantageous carbon policies, a new ‘levy control
framework’, and project financing via its Green Investment Bank, it had a poor
representation of cleantech companies on stock exchanges, relative to the size of its
economy. France had an average number of M&A and IPO deals for its size, with
an additionally low percent of energy consumption from renewables (13.7 percent in
2012). It is important to note, however, that public markets for cleantech stagnated
globally, particularly in Europe, during the period of study (though it has begun to
pick up at the end of 2013/beginning of 2014).
Though Israel topped the overall index, the country generates very low cleantech
revenues. Israel, as well as Finland and Sweden, have demonstrated the largest
gaps between ‘evidence of emerging cleantech innovation’ and ‘evidence of
commercialised cleantech innovation,’ perhaps because companies in these
geographies have not yet reached full maturity or are having trouble scaling up
efficiently. The gap between venture capital and private equity or acquisition for
these geographies may remain a concern in future years.
56 WWF Roland Berger, Clean Economy Living Planet, 2012
57 http://www.nve.no/no/Kraftmarked/Sluttbrukermarkedet/Varedeklarasjon/Varedeklarasjon-2012/
58 Energiewende, the Economist

27
© GLOBAL WARMING IMAGES / WWF-CANON

Renewables in the Innovation Index
There has been a global shift in the kind of public finance available to renewable
energy companies, with a declining support of feed-in tariffs (FITs) and other
renewables incentives across Europe and India. Only in some parts of the world
(namely Africa and the Middle East) have new FIT policies been implemented,
with South Africa in particular, witnessing the launch of ambitious new policy
frameworks. Japan also revised its New Low Carbon Technology plan, which
identifies various advanced environmental technologies that have the potential to
contribute to halving global carbon emissions by 2050.59
The shift in political sentiment towards support for renewable energy has naturally
affected the investment climate for renewable technologies in these markets (at least
in the short term). While 2011 was a record year for global renewables investment
($317 billion),60 subsequent years 2012 ($286 billion) and 2013 ($254 billion) have
shown a decline (a similar downward trend was also experienced in venture capital
for renewables).61 However, we will be sure to see longer term increases in global
investments in the industry, especially coming from China, India and Latin America,
which are already increasing their contributions. Rapid cost-cutting achieved in
part through recent innovation in key renewables sectors will instil confidence for
increased investments towards more innovative products and services.
On the one hand, allowing the ‘invisible hand’62 to take care of market forces can be
useful in the long-term for renewables companies to increase performance without
reliance on subsidies or tax incentives. On the other hand, the industry still has a
way to go, given that most countries source less than 30 percent of their primary
energy from renewables (with some exceptions like aforementioned Brazil or
Sweden). In addition, the fossil fuel industry continues to receive much larger overall
subsidies than renewables do.63 The U.S., Germany, Canada, and China are among
the top countries raising the most amount of venture capital in renewables64 over the
past 3 years.65 According to various sources such as the 2013 PEW Charitable Trust
Report, Who is Winning the Clean Energy Race? the same countries also had some
of the most aggressive renewables targets and renewables installations.
59 http://www8.cao.go.jp/cstp/english/doc/new_low_carbon_tec_plan/summary.pdf, p 3
60 Clean Energy Investment Falls For Second Year, BNEF, Jan 2014
61 The reduced volume of investment in 2013 reflected two main influences – a continued sharp reduction in the cost
of photovoltaic systems, and the impact on investor confidence of shifts in policy towards renewable power in
Europe and the U.S.
62 Adam Smith’s to describe the self-regulating behaviour of marketplace
63 Energy Subsidies, IEA (http://www.iea.org/publications/worldenergyoutlook/resources/energysubsidies/)
64 Includes Solar, Wind, Biofuels & Biochemicals, Biomass Generation, Hydro & Marine, Geothermal
65 Data from Cleantech Group’s i3 connect platform. Venture Capital includes seed, Series A, Series B and Growth
Equity

29
Figure 11. Venture Capital, Global Rank versus Renewables Targets and Installed Capacity66
Country
2011 - 2013 Venture
Capital Investment
in Renewables
($ millions)
Rank in
the Global
Innovation Index
Solar 2020
Cumulative Target
Wind 2020
Cumulative Target
China is often mentioned as winning the ‘clean energy race,’ as it has attracted a
total of $54.2 billion in project finance, has dominated exports, and is now expe-riencing
dramatic growth in domestic solar installations (from 3.2 GW in 2012 to
Renewables share of
final consumption
12.1 GW in 2013). That said, it is far from being number one in renewables venture
capital investment, most likely because several renewable sectors (namely solar) are
undergoing consolidation and growth at the moment, rather than generating a new
crop of innovative companies; and because the capacity and compulsion to innovate
locally is not as strong in China today as in, say, the U.S. Japan was another country
with honourable mention in the renewable space, because it has invested consider-ably
in small-distributed capacity, but has not yet garnered attention from venture
capitalists in the past few years. The innovations in Japan are still coming from the
very large industrials, like Mitsubishi or Nissan, not from start-ups. While the U.S.
and Germany top the charts in venture capital, the countries’ reduction in incentives
for renewables in 2013 might simultaneously get reflected in reduced renewables in-novation
over the next few years.
Breaking down renewables by a few sample sectors (solar, wind, marine power), also
brings interesting insight into what type of innovation is trending in a given country.
We see that countries which are adapting to new global renewables consumption
patterns, are also generating interesting new business models which will make them
globally competitive over the next decade.
Solar
The U.S. has achieved the most amount of venture capital towards solar, just as they
have across all sectors of cleantech. However, because of the changing solar land-scape,
in which China has been winning the race in solar module manufacturing
and prices, venture capital has been flowing mostly towards U.S. downstream solar
companies (e.g. financing, instalment, monitoring) as opposed to builders of physi-cal
parts to a solar module, plant or tower. Coincidentally, the U.S. has also scaled
back on its grant making towards solar hardware companies in favour of companies
that decrease the ‘soft costs’ of solar, which are the enablers of mass deployment.
For example, the Department of Energy’s Sunshot initiative incubator program,
has selected more non-hardware companies in 2012 and 2013, such as Mosaic (the
organizer of community solar financing projects) and Clean Power Finance (provider
66 Table Sources include: PEW Charitable Trust, Who is Winning the Clean Energy Race?, 2013; REN21 Global Status
Report 2014; Energy Information Agency, Annual Energy Outlook 2012 (USA); Database of State Incentives for
Renewables & Efficiency (DSIRE), average of 36 States’ Renewable Portfolio Standard targets (USA); National
Renewable Energy Action Plan 2010-2011 (Germany, UK, France); European Wind Industry Association, Pure
Power III (Germany, UK) ; Canadian Solar Industry Association, Solar Vision 2025 Report; National Energy Board,
Canada’s Energy Future 2013 Report; National Action Plan on Climate Change (India).
Cumulative
Renewables
Installed
Capacity 2013
USA $5118 3 14.6GW 57GW 25% by 2025 60 GW
Germany $330 7 50GW 49GW 18% by 2020 77.4 GW
Canada $310 9 10.6GW 15GW 65% by 2020 13.5 GW
China $304 19 50GW 200GW 9.5% by 2015 191 GW
UK $263 6 2.7GW 26GW 15% by 2020 18.7 GW
India $213 21 10.9GW* 32.4GW* 15% by 2020 30 GW
France $136 15 4.9GW 25GW 23% by 2020 14.7 GW
*INDIA’S SOLAR AND WIND TARGETS ARE FOR 2017

of finance and software for distributed solar energy) than in the 2007-2008 class,
where hardware companies like Abound Solar (thin film PV cell maker) and Solexel
(crystalline silicon solar cell producer) were better represented.
Germany scaled back its subsidized support for solar companies, which subsequently
resulted in high profile bankruptcies in 2011 and 2012 (e.g. Q-Cells, Odersun, Solon).
As a result, venture capital has turned its attention towards less capital intensive
‘cleanweb’ solar companies such as pvXchange (developer of an online wholesale
trade platform for the downstream PV market) or the Changers (developer of a social
energy platform for charging mobiles through a portable off-grid solar system).
At the opposite end of the spectrum, China has continued to emphasise innovation
in advanced materials for solar modules to increase the performance of solar power
installations. For example, Dupont, the chemicals giant, is collaborating with
Zhenfa New Energy (a Chinese EPC and power generation company) and separately
Yingli Energy (a Chinese PV manufacturer) on advanced materials research. The
Government has set a target of 14GW of installed solar for 2014 and is taking steps
to enable further integration of renewable sources by installing ultra-high-voltage
electric power transmissions across the country. Due to the country’s large financial
reserves, its generous incentives for cleantech, and a strong domestic market,
western renewables companies have been particularly attracted to China.67
Much innovation in the solar space continues to focus on better integration with
the power system and further cost cutting. Various companies such as SMA Solar
Technologies (Germany) are developing photovoltaic inverters with integrated
energy storage, which make solar consumption even more convenient to households.
Others, like Convertergy (China) and Optistring Technologies (Sweden) are solving
the problem of power loss, through development of cost efficient modules and
software control tools.68
Wind
Europe, and in particular, Germany, the UK and Denmark, is strong in the wind
sector, thanks to a history of incentives (such as FITs). Moreover, with leading
wind turbine manufacturers such as Vestas, Siemens Wind Power, and Enercon,
Europe persists as the largest market of wind power shareholders. However, as the
industry has matured the new crop of wind technology start-ups are now in the field
of monitoring and control – focused on improving operational efficiency of existing
wind farms, as opposed to building new capacity. An example of a new innovator
in the wind sector includes CyberHawk Innovations, the UK provider of aerial
infrastructure inspection services.
Venture capital in the wind sector has also recently been flowing in additional parts
of the world which are increasing their wind generation focus - China, India and also
Sweden and Belgium. Coincidentally, India has installed 1729 MW in 2013 alone and
will continue to be a moving force, as the country attempts to roll out its national
“wind mission” consisting of grid improvement.
Offshore wind development, in particular floating turbines, holds promise for coastal
countries like Japan and South Korea, which have strong offshore wind deployment
targets. The UK has the largest offshore market in the world (around 3681 MW) 69
as well as an established offshore wind accelerator (OWA) managed by the Carbon
67 More Western clean-tech companies take off in China, but there are gaps in the runway: http://www.eenews.net/
stories/1059975492
68 http://climatesolver.org/innovations/supplying-energy/solar-pv-optimizing-inverter
69 GWEC, Global Wind Report 2013

31
Trust,70 which finances companies like SPT Offshore, that have installation and
engineering expertise of offshore vessels.
In the U.S., which is also a big wind market, companies are concentrating on
making blades more aerodynamic by using different advanced materials (such as
nanotechnology). As an example, Electron Energy Corporation produces rare earth
materials and magnet products.
Various innovative companies are also now harnessing the excess power of wind to
convert it to water or energy. French company Eole Water for instance, has modified a
traditional wind turbine design to create an appliance that can manufacture drinking
water – enabling rural areas to become self-sufficient in terms of water supply.
In Germany and Denmark (countries with a surplus of wind energy), energy storage
companies are applying their core competences in electrolysis71 and hydrogen
productions towards wind power-to-gas (P2G) applications. These technologies
tap into an otherwise curtailed power from wind farms and feeds it into the gas
distribution grid. There are several P2G companies opening the possibility for
utilizing excess energy in different ways whether it is for hydrogen (e.g Sunfire) or
synthetic natural gas (e.g. Etogas).
Energy Storage/Smart Grids
Smart grid distribution systems and energy storage can boost renewable energy’s
significance by overcoming the intermittency obstacle and enabling far more
distributed power than conventional forms of energy.72 New innovation has surfaced
in the form of intelligent power grids, i.e. where communications and ‘internet
of things’ (advanced connectivity devices) is allowing for fluctuating renewable
power generation to be optimally managed and consumed. These technologies are
connecting different parts of the energy system ‘virtually’ to provide a decentralised
reserve capacity and demand-side management of renewables.
Energy storage optimizes the existing electric power system and facilitates more
renewable energy deployment, creating a virtuous cycle leveraging further renewable
energy penetration and cost decreases. A large range of chemical, mechanical,
thermal and gravitational energy storage options are commercially available and
already being deployed on the grid. In fact, storage options like flywheel energy
storage is far more effective at balancing the grid compared to fossil back-up
solutions.
Energy storage models globally are specializing in eliminating issues of intermittent
power output, and preserving the reliability of the grid as more renewable sources go
online. Examples include General Compression (USA), the developer of isothermal
compressed air storage73 systems, Isentropic (UK), the producer of pumped heat
electricity storage systems and Sonnenbatterie (Germany) the specialist in solar PV
and micro-CHP storage systems.
Concurrently, Utilities are increasing their engagement with energy storage
innovation, so as to optimize their own arrays for the purposes of selling their excess
power, or for arbitrage. As a result, several companies in the US, like Stem and
Green Charge Networks, are providing software and web tools specifically designed
for utilities to monitor energy usage or to utilize reserve capacity in existing power
infrastructure (e.g. AES Energy Storage).
70 The OWA accelerator is two thirds funded by utilities and other industry players.
http://www.carbontrust.com/our-clients/o/offshore-wind-accelerator
71 Running an electrical current through water
72 The Third Industrial Revolution: Leading the Way to a Green Energy Era, Jeremy Rifkin
73 Regenerating energy using the waste heat energy from compressing air

In Asia and elsewhere, companies are building materials innovation (anodes,
cathodes, separators) mainly around lithium ion batteries as a high-energy capacity
option for use in tandem with renewables generation; examples include Kureha
Battery Materials (Japan) and Cnano Technology (China).
Geothermal
Technology to harness geothermal resources has existed for many years and is
competitive with conventional energy in many places around the world with large
potential for further scaling. In the innovation space there are various on-going
pilots in the area of Enhanced Geothermal Systems (EGS), an engineering technique
used to artificially create hydrothermal resources to generate electricity. There is no
commercial-scale EGS plant to date, although projections of installed capacity from
EGS in the U.S. could amount to 100,000 MW in the U.S. by 2050.74
There are also small pockets of innovative companies which are refurbishing
and improving performance of existing facilities and power plants. For example,
Greensleeves (US) has developed intelligent controls to improve cost barriers to
implementing geothermal into thermal control systems. Exergy (Italy) has also
developed an outflow turbine for Organic Rankine Cycle (ORC)75 to advance the
efficiency of numerous geothermal plants including Enel Green Power’s 1MW plant
in Monte Amiata.76
Retrofitting of ground source heat pumps used for energy efficient heating and
cooling of homes and other buildings is another up and coming innovation area.
Companies involved in this area include Ice Energy (UK) and Hero Renewables
(USA).
Tidal & Marine Power
While large scale hydro development has been dominated by a specific set of leaders
(Alstom, Andritz, IMPSA, and Voith), there is much innovation in wave, tidal and
smaller hydro-power technology. Innovative marine power companies for instance,
are looking to help increase capacity of existing large hydropower and to tap into
growing hydro consumption markets, such as China. For example, OpenHydro
group, the Irish manufacturer of marine turbines, has established various joint
ventures and international partnerships to create utility-scale tidal generation.
Furthermore, Eco Wave Power, the Israeli hydrokinetic developer, has established
a China-based production facility, to promote its technologies throughout the
country.77
In the UK, there are several wave energy converter companies achieving venture
capital traction, examples include Aquamarine Power and Scotrenewables. The ‘Deep
Green’ concept is also up and coming in the tidal space, which is associated with
unlocking inaccessible deep water and harnessing power from low-velocity currents.
The Department of Energy and Climate Change (UK) recently awarded support to
three companies in this area (Minesto, IT Power and NPL).78
In Europe, service-oriented businesses are trending, such as Geppert, the
Austrian provider of electrical and mechanical equipment for small hydropower
plants, receiving €15 million in 2013 from Mountain Cleantech and Austria
Wirtschaftsservice. Operators of small hydro projects, generally have a need to
improve the timing, scheduling and utilization of their sites.
74 http://www.c2es.org/technology/factsheet/EGS
75 ORC – the use of a high molecular mass fluid for heat recovery from geothermal or other low temperature sources
76 REN21 Global Status Report 2014, p41
77 Israeli wave energy company turns on Chinese subsidiary, Cleanbiz.Asia
78 http://www.plantengineer.org.uk/plant-engineer-news/half-million-decc-award-for-deep-green-tidal-power/59768/

© THOMAS HAUGERSVEEN / WWF-NORWAY
33
Other
Over half of the chemical energy from fossil or renewable fuels today is lost during
combustion processes, primarily as waste heat. In industrial applications and in
transportation, large quantities of waste heat remain unused. The primary area of
innovation in bioenergy has been in this area, specifically in waste heat recovery
technology, such as HeatMatrix (Netherlands) which converts waste heat from flue
gas and preheat combustion air. Other companies are specialized in thermo-electric
products, such as Alphabet Energy (U.S.) O-Flexx Technologies (Germany) or
Sheetak (India).

35
Conclusion
More needs to be done globally across all factors of the innovation index, whether it
is to increase investment in research (cleantech R&D currently represents less than 3
percent of total global R&D spend); diffuse low carbon solutions at the scale required
to combat climate change (estimated to be an extra $480 billion investment inflows
per year to 2030 to avoid a temperature increase of greater than 2°C); 79 revamp
aging energy infrastructures to accommodate a new set of technologies; or facilitate
the right education, training and mind-set for entrepreneurs of the next decade.
Technological progress has certainly been made in the last decade, with evidence of
mature cleantech found in wind power, solar energy and LED lighting. However, the
next wave of cleantech businesses will require not just capital and policy backing to
grow – they will need to build relationships with local and international partners to
bring them to desirable scale.
Policymakers have the opportunity to help start-ups both capitalize on the needs
of their domestic markets and take innovation to the next level, by partnering
internationally on cleantech strategy or funding and learning ‘how they do things’ in
the East or West, North or South. Countries that fall behind the curve on the index
can seize the opportunity to address their gap on cleantech innovation by engaging
in cross border alliances and discussions. Countries that have smaller domestic
markets yet a knack for developing cutting edge technologies will need to help
their enterprises access larger cleantech hungry populations in other geographies
and markets. And on the reverse side, countries that have large domestic markets
but need to catch up on generating innovative companies will look to partner with
smaller start-up generator countries to learn from their technological expertise.
The world needs to accommodate an additional 3 billion people by 2050 all of
whom will wish to have a good quality of life, and access to food, water and energy
privileges. We are already seeing a shift in countries’ mind-sets towards cleantech
– evidenced by new policies and new programs to expedite sustainable innovation
such as South Korea’s fast track green patent process and China’s investment into
renewables worth billions over the next decade. Even the ‘laggards’ are reacting to
changes in the global landscape, increasing their activities in areas where they have
never before been present.
In our view, initiatives like Tekes and MOST joint call for cleantech proposals
between Finland and China are worth watching – as they may prove to be a lead
example of a new direction for innovation policy in clean technology. Strategically
combining the strengths of the world’s best Start-Up Generators (eg Finland) with
the Strongest Commercialisers (eg China) carries a lot of potential for years ahead.
79 IPCC WG III on Mitigation, Annual investment Flows to 2030

Appendix A: Indicators and Sources 80
General innovation drivers
Indicator Source Date Definition Weight
General innovation inputs INSEAD Global Innovation Index 2013
80 The notable differences in the methodology (compared to the 2012 index), include: 1) the use of per GDP purchasing power parity (PPP) as an underlying
comparative metric rather than just per GDP to take into account relative costs and inflation rates 2) Renewable energy consumption calculated as a % of
primary energy rather than weighted by GDP as a better measure for ambition towards 100% renewables 3) Employment figures were estimated as renew-able
energy jobs rather than low carbon jobs due to availability of data.
Insitutions, human capital, infrastructure, market
sophistication and business sophistication
facilitating innovation
50%
Entrepreneurial culture Global Entrepreneurship Monitor 2013
Positive attitudes towards entrepreurship and
early stage entrepreneurial activity
50%
Cleantech-focused innovation drivers
Cleantech-friendly
government policies
The Pew Charitable Trusts Clean
Energy Race Report and Cleantech
Group research
2013
Government policies supporting clean energy
including tax incentives, feed-in tariffs, renewable
energy mandates and others
25%
Government R&D
expenditure in cleantech
sectors
International Energy Authority (IEA)
RD&D budget data ; IEA Report -
Tracking Clean Energy Progress
2011
Total budget for cleantech R&D as a proportion of
GDP (PPP)
25%
Access to private finance
for cleantech start-ups
Cleantech Group data 2011 - 2013
Number of cleantech investors and cleantech-focused
funds recently raised weighted by GDP
25%
Country-attractiveness
of Renewable Energy
Infrastructure
Ernst & Young Renewable Energy
Country Attractiveness Index
2013
National renewable energy markets, renewable
energy infrastructures and their suitability for
wind, solar, biomass and other renewable energy
technologies
20%
Cleantech cluster
programs
& initiatives
Cleantech Group research 2013
Number of industry associations, physical clusters
and economic initiatives supporting the cleantech
industry as a proportion of GDP (PPP)
5%
Evidence of emerging cleantech Innovation
Patents in cleantech
sectors
OECD database 2011
Environment-related technology patents filed
under the Patent Cooperation Treaty weighted by
GDP (PPP)
45%
Early-stage private
investment
Amount of venture capital invested in cleantech
companies as a proportion of GDP (PPP)
45%
High impact cleantech
start-ups
Number of companies included in the Global
Cleantech 100 weighted by GDP (PPP)
10%
Evidence of commericalised cleantech innovation
Revenue of cleantech
companies
WWF/Roland Berger Clean Energy,
Living Planet and UK Department for
Business Innovation & Skills, Low
Carbon and Environmental Goods
and Services report
2012
Value-added from cleantech manufacturing
as a proportion of GDP and revenue of Low
Carbon and Environmental Goods and Services
companies as a proportion of GDP (PPP)
50%
Renewable energy
consumption
BP Statistical Review of World
Energy 2013
2013
Renewables as % of Primary Energy
Consumption
20%
Late-stage private
investment and exits Cleantech Group data 2011 - 2013
Number of cleantech private equity deals M&As,
and IPOs weighted by GDP (PPP)
15%
Successful publicly
traded cleantech
companies
Cleantech Group, FTSE, Ardour and
WilderHill indices of publicly traded
cleantech companies
2013
Number of listed cleantech focused corporates
weighted by GDP (PPP)
10%
Renewable Energy Jobs IRENA Renewable Energy and Jobs
Annual Review
2014
Number of direct and indirect employees related
to renewables by total labor force
5%

37
Appendix B: Methodology Considerations
We would like to acknowledge that despite the robust methodology for this index,
like in any study, there are parts of the framework which could be improved given
a wider availability of data. For instance, while public R&D data was included in
the report, private R&D data was not. However, there are still barriers and a lack of
incentives for the private industry to confidentially report on R&D data.81
In addition, we would have also liked to include an energy efficiency indicator, given
that it is the largest and fastest growing sector in cleantech. However, besides the
American Council for an Energy-Efficient Economy (ACEEE) scorecard which rates
countries on various metrics (like energy consumption of commercial buildings),
only 12 economies were considered in their study, without enough proxies to
extrapolate effective estimates for the other 28 countries).
Furthermore, while Cleantech Group collects data on early stage funding from
venture capital, other types of financing (i.e from private banks) could also generate
a more granular picture of early stage capital commitment, especially as other such
sources are becoming increasingly important at the early-stage. However, we did not
find a comprehensive data set on this metric either.
And finally, we considered factoring in a country’s domestic market size as well as
their focus on collaboration and trade, as they could illustrate even more accurately,
the likelihood that companies are able to commercialise both inside their local
economies and internationally. However, we did not find an applicable structure
which could fit within our framework, nor did we want to devalue the other very
cleantech specific sub-factors within the ‘evidence of commercialised cleantech
innovation’ driver.
Appendix C: Abbreviations
VC: Venture Capital - Investment from investors seeking private equity
stakes in start-up and small- and medium-size enterprises with strong growth
potential. These investments are generally characterized as high-risk/high-return
opportunities.
M&As: Mergers & Acquisitions – Refers to the aspect of corporate strategy,
corporate finance and management dealing with the buying, selling, dividing and
combining of different companies that can help an enterprise grow rapidly.
IPO: Initial Public Offering - A stock market launch. IPO is the first sale of stock
by a private company to the public. It can be used by either small or large companies
to raise expansion capital and become publicly traded enterprises.
81 IEA, Tracking Clean Energy Progress, 2012

Appendix D: Country Profiles
Argentina
Argentina excels in early-stage entrepreneurial activity, but is below average
in general innovation inputs. The country is relatively attractive for renewables
but has little public cleantech R&D and access to private finance. Low scores on
all emerging cleantech innovation indicators result in a score well below average.
Argentina stands out only on commercialised cleantech innovation, with very
strong cleantech company revenues though it lacks publicly traded cleantech
companies and later-stage deals. Argentina is below neighbour Brazil but above
Mexico
in the overall index.
Australia
Australia scores very well on innovation drivers, but ranks lower on innovation
outputs. The country’s performance on general drivers was built on a reasonably
entrepreneurial culture and good early-stage entrepreneurial activity. Cleantech-specific
drivers are supported by Australia’s attractiveness for renewables, mainly
due to its geo-climatic features, and a good number of cleantech funds. While
Australia has seen a number of later-stage cleantech transactions, the country’s
commercialised and emerging cleantech innovation score are held back by low
renewable energy consumption. Uncertainty surrounding the continuation of
carbon pricing, the renewable energy target and other policies has correlated
with weaker early-stage private investment in the country.
Austria
Austria has largely above-average scores in all innovation outputs and
relatively strong innovation drivers. General innovation factors benefit
from an increasingly entrepreneurial culture. Good public R&D spending
counterbalanced by low access to private finance for cleantech start-ups result in
a slightly above-average cleantech specific drivers’ score. Austria scores well on
outputs of innovation, with excellent production of environmental patents and
largely above-average renewable energy consumption. Austria sits in a similar
position to Belgium and France but falls behind Germany and Nordic leaders.
Belgium
Belgium scores average in all areas but for cleantech innovation drivers, where
they scored above the mean. Poor entrepreneurial culture and low early-stage
business activity lower the country’s general innovation drivers score. In contrast,
top government policies and large cleantech funds focused on the country pulls
up its cleantech-specific innovation drivers’ score. Belgium has otherwise average
innovation outputs, undermined by low renewable energy consumption and
cleantech companies revenues, despite good VC activity and a good number of
deals. Belgium sits in a similar position to Austria and France, behind Northern
Europe, the US, and Asian leaders.
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
Argentina
Argentina
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
Australia
Australia
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
Austria
Austria
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
Belgium
Belgium

Mean
Brazil
Cleantech
Drivers
Mean
Bulgaria
Cleantech
Drivers
Mean
Canada
Cleantech
Drivers
Mean
China
Cleantech
Drivers
39
Brazil
Brazil has slightly below- average innovation and emerging cleantech drivers,
but the country is in the top three in commercialised cleantech innovation,
primarily due to its established biofuels industry. However, it falls behind on
the emerging cleantech innovation score with few patents and below-average
venture capital investment. Brazil has a very strong entrepreneurial culture
but lacks other innovation inputs, public R&D spending, and cleantech-focused
investors. Scoring better than Argentina and Mexico, Brazil falls behind other
emerging giants such as India and China.
Bulgaria
Bulgaria rates fairly low on all four factors, with particularly weak innovation
output scores. Bulgaria stands out for having very few cleantech investors
and funds, VC investments, or later-stage deals. Entrepreneurial attitudes
in the country are also relatively weak. However, the country is stronger
in consumption of renewable energy and the proportion of its population
working in renewable energy businesses. The country tops only Russia and
Greece in the overall index, though it falls short of higher ranked Eastern
European countries such as Romania, Poland and Turkey.
Canada
Canada sits in the top 10 of the overall index and has excellent general innovation
inputs, but does not stand out on cleantech-specific drivers. With excellent
entrepreneurial attitudes, the country has very strong general innovation inputs
but lacks strong government policies in support of cleantech innovation. The
country has seen strong VC investment, along with a good number of high-profile
cleantech companies and scores well on emerging cleantech innovation. On the
downside, the country’s commercialised cleantech score is held back by small
cleantech revenues. Canada scores below Northern Europe and its immediate
neighbour the US.
China
China has average general innovation drivers with a strong early-stage
entrepreneurial activity but does better on cleantech-specific drivers due to top
scores for attractiveness of infrastructure for renewables and cleantech funds.
Despite this, currently limited VC investment for the size of the economy and
a low number of environmental patents kept the country’s emerging cleantech
innovation score well below average. In contrast, China is in the top ten on
commercialised cleantech with the most cleantech IPOs after Israel as well as
strong cleantech manufacturing and revenues.
General
Drivers
Emerging
Innovation
Brazil
Commer-cialised
Innovation
General
Drivers
Emerging
Innovation
Bulgaria
Commer-cialised
Innovation
General
Drivers
Emerging
Innovation
Canada
Commer-cialised
Innovation
General
Drivers
Emerging
Innovation
China
Commer-cialised
Innovation

Czech Republic
The Czech Republic scores below average on all four factors. The country has poor
entrepreneurial attitudes, very low public cleantech R&D spending and lacks a local
cleantech investment community, which pulls down its innovation inputs scores.
Despite this, the Czech Republic has a good added value to its clean economy
and average cleantech companies revenues, scoring better for commercialised
cleantech. The Czech Republic stands out from its European neighbours for its
weak emerging cleantech innovation score, due to scarce VC investment and few
environment-related patents. Overall, the country ranks poorly against neighbours
Germany, Austria and Hungary, though it comes ahead of Poland. Overall, the
country ranks poorly against neighbours Germany and Austria, though it comes
ahead of Poland and just behind Hungary.
Denmark
Denmark ranks fifth on the overall index, and is first for cleantech-specific
drivers. The country has excellent general innovation inputs and strong cleantech
policies, including ambitious green energy provisions until 2020. It has a number
of high-impact cleantech start-ups, and a relatively high number of investors, but
on the other hand, a stagnant number of environmental patents and a decreasing
amount of venture capital compared to prior years. However, its top score for
commercialised cleantech demonstrates a thriving clean economy, and density of
publicly traded cleantech companies. Denmark tops Norway in the overall index
but falls behind neighbouring Sweden and Finland.
Finland
Finland takes the second place on the overall index. The country scores second on
both cleantech innovation drivers and evidence of emerging cleantech innovation.
It has strong general innovation inputs, such as cluster development and human
capital, and ranks second for public R&D, though it lacks availability of cleantech
specific funds. Finland’s top emerging cleantech innovation score is supported
by its high-profile cleantech companies and many new environmental patents.
However, Finland is not as successful in commercialising cleantech innovation,
with average cleantech companies revenues and few M&As and IPOs. Finland
scores above neighbours Sweden and Norway, and above the US.
France
France ranks above average on the overall index, though its strengths lie in
the cleantech innovation drivers. France has strong public R&D and attractive
infrastructure for renewables as well as abundant cleantech funds. The country
scores relatively high on emerging cleantech innovation, thanks to good VC
investment and environmental patents. France’s other scores are below average,
with its general innovation drivers score pulled down by a score below average on
entrepreneurial attitudes. The country fell behind for commercialised cleantech
due to little value-added cleantech manufacturing, despite a number of recent
IPOs and good cleantech companies revenues. France has fallen behind Northern
European neighbours such as Germany and the UK but tops Southern countries
such as Italy and Spain.
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
Czech
Republic
Czech
Republic
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
Denmark
Denmark
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
Finland
Finland
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
France
France

Mean
Germany
Cleantech
Drivers
Mean
Greece
Cleantech
Drivers
Mean
Hungary
Cleantech
Drivers
Mean
India
Cleantech
Drivers
41
Germany
Germany shows high scores on all factors except general innovation drivers, where
it is slightly above average. The country has strong general innovation inputs but
this is not matched by positive attitude towards entrepreneurship or level of early
stage entrepreneurial activity. The country is very attractive for renewables and
shows a good number of cleantech funds, Germany scores high on cleantech-specific
drivers in spite of supportive government policies and good public R&D.
Germany is in the top 10 for environmental patents per GDP and shows good signs
of emerging cleantech innovation. Cleantech manufacturing is well developed,
while high renewable energy consumption built on a history of strong incentives
provides a strong domestic market. Germany is among the top scoring countries in
Europe, alongside the UK, Ireland, Netherlands and the Nordic countries.
Greece
Greece sits at the bottom of the overall index, followed only by Russia, and is the
worst performer in innovation drivers. The country lacks both innovation inputs
and emerging cleantech innovation. Moderate investment activity in cleantech
fails to offset very low public R&D funding and a less attractive infrastructure
for renewables then in past years, resulting in a low cleantech-specific drivers
score. Average VC investment failed to deliver high-profile cleantech companies
and environmental patents, meaning a low emerging cleantech innovation score.
Slightly above-average cleantech manufacturing revenues were thwarted by
low renewable energy consumption and the few later-stage deals led to a low
commercialised cleantech innovation score.
Hungary
Hungary scores below average for all factors except cleantech-specific drivers.
The country lacks strong general innovation inputs and entrepreneurial culture.
Average venture capital activity does not offset low-profile companies and failure to
support environmental patents, resulting in a low emerging cleantech innovation
score. Very low renewable energy consumption and a lack of late-stage cleantech
companies account for a weak commercialised innovation score. However Hungary
does have relatively strong public R&D and supportive government policies but
lacks a favourable environment for renewables deployment. Hungary scores behind
most Central European countries, but comes top in Eastern Europe and above
neighbours Romania, Bulgaria, and Slovenia.
India
India scored average on the overall index. The country has weak general innovation
inputs and average entrepreneurial culture. This contrasts with its high score in
cleantech-specific innovation drivers, based on the country’s public R&D spending
and density of cleantech funds. Good VC investment fails to offset a low number
of environmental patents and few high-profile cleantech companies, resulting in
an average emerging cleantech innovation score. The country performs slightly
worse on commercialised cleantech, its score pulled down by low renewable energy
consumption and few publicly traded cleantech companies. India ranks above
Indonesia but below China and Singapore.
General
Drivers
Emerging
Innovation
Germany
Commer-cialised
Innovation
General
Drivers
Emerging
Innovation
Greece
Commer-cialised
Innovation
General
Drivers
Emerging
Innovation
Hungary
Commer-cialised
Innovation
General
Drivers
Emerging
Innovation
India
Commer-cialised
Innovation

Indonesia
Indonesia has the lowest emerging innovation score and is the lowest ranking
Asian country in the overall index. The country has the lowest general innovation
inputs but has a strong entrepreneurial culture, coming in first for early-stage
entrepreneurial activity per GDP, resulting in an average general innovation
score. Good attractiveness for renewables, including newly implemented tariffs for
geothermal energy, fails to counterbalance a lack of local cleantech investors.
The country scored last on all emerging cleantech indicators, with little evidence
of venture capital activity, high impact start-ups, or patents. However, Indonesia
has strong revenue from cleantech companies but this does not offset low
renewable energy consumption and a lack of later-stage cleantech deals.
Ireland
Ireland scores especially well on evidence of cleantech innovation, and is above
average on other drivers. Ireland has numerous supportive cleantech organisations
relative to its size. Ireland stands out for emerging cleantech innovation due to its
top 10 early-stage investment and high-impact cleantech start-ups. By contrast,
the country is barely above average for commercialised cleantech innovation,
with several publicly traded cleantech companies and a large percentage of the
population working in cleantech, but low cleantech companies revenues. Ireland
sits in a similar position to Germany and the Netherlands but falls behind the UK
and the Nordic countries.
Israel
Israel places first on the overall index, with extremely high evidence of emerging
cleantech innovation drivers. The country has demonstrated the greatest
density of high-impact cleantech start-ups, as well as a high level of business
sophistication and entrepreneurial attitudes, strong venture capital activity,
and a good number of environmental patents. Israel has increased its supportive
government policies and has early stage cleantech-oriented funds as well as
substantial M&A activity, even while cleantech company revenues remain low.
The country has seen an impressive number of cleantech companies voted into
the Global Cleantech 100 index per GDP over the past 2 years.
Italy
Italy scores well on cleantech-specific innovation drivers but falls behind on
all other factors. An insufficient entrepreneurial culture and a dearth of new
businesses translate in to one of the lowest general innovation drivers’ scores.
Although there have been supportive policies for renewables and innovation
support systems, the government’s contradictory actions in recent years has
created uncertainty for investors. There is also a lack of cleantech-focused funds
and investors. Mediocre venture capital activity, environmental patenting and few
high profile cleantech companies led to a low evidence for emerging cleantech.
Italy scored slightly better on commercialised cleantech innovation due to above
average cleantech companies revenues and number of jobs per GDP. The country
scores low in the overall index, below most of Western Europe.
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
Indonesia
Indonesia
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
Ireland
Ireland
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
Israel
Israel
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
Italy
Italy

Mean
Japan
Cleantech
Drivers
Mean
Mexico
Cleantech
Drivers
Mean
Netherlands
Cleantech
Drivers
Mean
New Zealand
Cleantech
Drivers
43
Japan
Japan is the highest ranking Asian country. It topped the list for environmental
patents, in both relative and absolute terms, leading to its high score on emerging
cleantech innovation. On the other hand, the country scores very low for VC
activity and for high-impact cleantech start-ups. This is not surprising given the
country’s good score for general innovation inputs (e.g. research, government
effectiveness and education) but very low score for entrepreneurial culture.
Japan also has few cleantech focused investors and organisations but balances
that with good public R&D spending. The country improved in its attractiveness
for renewables after key policy developments and new feed-in tariffs. Despite
good cleantech revenues, Japan scores low in commercialised innovation, due to
insufficient access to private finance.
Mexico
Mexico scores below average on every indicator except general innovation drivers,
fostered by a strong entrepreneurial culture and new tax incentives for SMEs.
Recently approved cleantech-friendly government policies and R&D budget have
yet to improve access to private finance or increase local cleantech investors’
start-ups in the country. Little venture capital investment and no high-profile
cleantech companies account for a low score on emerging cleantech innovation.
The country also lacks: renewable energy consumption in the residential sector,
later-stage deals and publicly traded cleantech companies. Overall, Mexico scored
lower than Brazil and Argentina.
Netherlands
Overall, the Netherlands scores above average but falls behind on
commercialised cleantech innovation due to low cleantech manufacturing and
a lack of publicly traded cleantech companies and IPOs. The country has strong
general innovation inputs and government policies supportive of cleantech,
but a lower density of cleantech-focused funds. This is counterbalanced by a
good number of local investors, resulting in a slightly above-average score for
cleantech innovation drivers. Many environmental patents, a number of high
impact start-ups and VC activity mean the country scores well for emerging
cleantech innovation. The Netherlands ranks above its southern neighbours but
below Germany, the UK and the Nordic countries.
New Zealand
New Zealand ranks third overall in commercialised cleantech but well below
average on emerging cleantech innovation. The country has good general
innovation drivers (investor protection, knowledge economy) and good
entrepreneurial culture. On cleantech-specific drivers, New Zealand stays above
average thanks to an attractive infrastructure for renewables, although it has
weaker R&D spending and cleantech funds. By contrast, low VC activity pulls
its emerging cleantech score down despite an average number of environmental
patents. Finally, New Zealand stands out for commercialised cleantech, mainly
due to its top renewable energy consumption (although most of its renewable
energy capacity was built 30 to 60 years ago) and the proportion of its population
working in that sector.
General
Drivers
Emerging
Innovation
Japan
Commer-cialised
Innovation
General
Drivers
Emerging
Innovation
Mexico
Commer-cialised
Innovation
Netherlands
General
Drivers
Emerging
Innovation
Commer-cialised
Innovation
New Zealand
General
Drivers
Emerging
Innovation
Commer-cialised
Innovation

Norway
Norway scores well on general innovation drivers, due to strong innovation inputs,
as well as above average entrepreneurial culture. The country falls below average
for cleantech-specific innovation drivers due to low support mechanisms for
renewables innovation, low public R&D budgets and weak cleantech funds, although
it has a number of supportive clusters and investors. Norway sees a number of
high-profile cleantech companies and environmental patents but below-average
VC investments amount leads to a modest emerging cleantech innovation score.
However, the country has a high density of publicly traded cleantech companies
and good IPO and M&A numbers, resulting in a good commercialised cleantech
innovation score. Norway ranks high on the list, but falls below the other Nordic
countries.
Poland
Poland scores very low on all four factors in the cleantech innovation index.
The country has poor general innovation drivers, limited access to private
finance and low public R&D, resulting in weak scores for both general and
cleantech-specific innovation drivers. The country has seen virtually no
VC investment or high-profile cleantech companies and has produced few
environmental patents. On the bright side Polish cleantech companies have
moderately strong revenues, but still lags in terms of late-stage deals and
renewable energy consumption. Poland sits low in the list, overtaking only
Russia, Turkey and Bulgaria.
Portugal
Portugal scores below average on the general index. The country lacks general
innovation inputs, an entrepreneurial culture, high-profile cleantech companies
and produces few environmental patents, resulting in low scores on general
innovation drivers and emerging cleantech innovation. However, Portugal’s
supportive government policy and strong public R&D budget lead to an above
average score for cleantech-specific innovation drivers, despite scarce cleantech
funds and organisations. The country also scores well on commercialised cleantech
innovation, mainly due to moderate cleantech companies’ revenues and renewable
energy consumption, but has yet to produce late-stage deals and IPOs. Portugal
scores above Italy and Spain but below other Eastern European countries.
Romania
Romania held mostly below average but received a better score on commercialised
cleantech innovation due to moderate cleantech revenues and above average
private equity investments. Otherwise, the country lacks general innovation
inputs, early-stage financing, and a local cleantech investment community, but
shows above-average government support. There is little emerging cleantech
innovation, as seen by very low scores for venture capital activity, environmental
patents, and high-impact start-ups. Romania sits below most central and Eastern
European countries except Bulgaria.
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
Norway
Norway
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
Poland
Poland
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
Portugal
Portugal
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
Romania
Romania

Mean
Russia
Cleantech
Drivers
Mean
Saudi
Arabia
Cleantech
Drivers
Mean
Singapore
Cleantech
Drivers
Mean
Slovenia
Cleantech
Drivers
45
Russia
Russia takes the bottom spot on the overall index. The country has poor
general innovation inputs and entrepreneurial attitudes. Russia’s score
was very low on all cleantech-specific innovation driver indicators with the
exception of cleantech funds, where the country scored moderately above
average. Russia’s record of venture capital investment and evidence of
emerging cleantech innovation is especially poor. The country has
a similar dearth of later-stage deals, publicly traded cleantech companies,
and renewable energy consumption.
Saudi Arabia
Saudi Arabia scores very low on the overall index. The country has average
general innovation drivers, thanks only to a strong entrepreneurial culture.
Saudi Arabia shows no sign of cleantech-specific drivers except for government
policies: it has the second lowest score for renewables infrastructure
attractiveness and generally lacks a cleantech financing ecosystem. The country
has a slightly below average commercialised cleantech score thanks to recently
increased renewable energy consumption but scores poorly on other metrics,
including late-stage deals, IPOs, M&A and emerging cleantech innovation in
general.
Singapore
Singapore has above average score on all factors except on evidence of emerging
cleantech innovation. Singapore has good general innovation scores, driven by
market sophistication, logistics and early-stage financing, but scores less well on
entrepreneurial attitudes. On cleantech-specific drivers, the country has strong
government policies and a good number of investors but lacks cleantech funds
and organisations. It scores well on commercialised cleantech due to high late-stage
activity and renewable energy consumption but has below average cleantech
companies’ revenues. Singapore’s emerging cleantech score is pulled down by low
VC activity and a dearth of high-profile cleantech companies. It scores above India
and neighbouring Indonesia in the general index, but below other Asian countries.
Slovenia
Slovenia scores moderately below average on all four factors. The country
lacks a dynamic entrepreneurial culture and falls short of an average score on
general innovation drivers. In the cleantech-specific area, Slovenia stands out
for its supportive government policies but lacks a local cleantech investment
community. It scores lowest on emerging cleantech innovation, with no signs
of cleantech venture capital activity, environmental patents or high-profile
cleantech companies. The country scores better in commercialised cleantech,
thanks to moderate revenues from cleantech manufacturing and renewable energy
consumption. A dearth of later-stage deals and public companies, however, curbs
its score. Slovenia ranks below its neighbours Italy, Hungary and especially
Austria.
General
Drivers
Emerging
Innovation
Russia
Commer-cialised
Innovation
General
Drivers
Emerging
Innovation
Saudi
Arabia
Commer-cialised
Innovation
General
Drivers
Emerging
Innovation
Singapore
Commer-cialised
Innovation
General
Drivers
Emerging
Innovation
Slovenia
Commer-cialised
Innovation

South Africa
South Africa scores below average on all factors. The country lacks general
innovation and early-stage entrepreneurial activity, resulting in a weak general
innovation driver score. South Africa does slightly better in cleantech-specific
drivers due to supportive government policies, but lacks public R&D budget
and access to private finance. The country scores very low on all indicators of
emerging cleantech innovation. Finally, South Africa achieves an average score
in commercialised cleantech, thanks to good cleantech revenues but falls behind
in terms of late-stage investments in publicly traded cleantech companies. South
Africa is the only representative of its continent on the list.
South Korea
South Korea scores well on the list, with strong general innovation drivers and
emerging cleantech innovation scores. The country has excellent entrepreneurial
culture, though small-scale early-stage activity. Its above average cleantech
innovation score is supported by numerous environmental patents but hindered
by low venture capital activity and few high-profile cleantech companies. On the
downside, South Korea ranks below average on cleantech-specific innovation
drivers due to a lack of a local investment community. Despite good cleantech
revenues and some public companies, the country achieves a below-average
score for commercialised cleantech mainly because of low renewable energy
consumption and a lack of late-stage deals. Still, South Korea is the highest-ranking
Asian country after Japan.
Spain
Spain scores well on commercialised cleantech innovation but scores poorly
on other indicators. The country lacks: a strong entrepreneurial culture, public
R&D spending, and access to private finance, though Spain does have a number
of dedicated cleantech clusters. A dearth of venture capital investment, high-profile
companies and environmental patents holds back its emerging cleantech
innovation score. However the country scores well on commercialised cleantech,
with strong revenues from cleantech companies, good renewable energy
consumption and a density of publicly traded cleantech companies. Spain scores
higher than Southern European countries such as Italy and Greece but below
neighbouring Portugal.
Sweden
Sweden ranks fourth in the overall index, scoring well in all factors and topping
the list for general innovation drivers. The country has especially strong innovation
inputs, entrepreneurial attitudes, above-average public R&D, and a relatively
large number of cleantech organisations, resulting in high general and cleantech-specific
innovation drivers’ scores. The country has much evidence of emerging
cleantech innovation, being home to a large proportion of high-impact cleantech
start-ups. In commercialised cleantech, Sweden has high scores for renewable
energy consumption, high cleantech revenues and a good density of publicly
traded cleantech companies. Sweden demonstrates one of the largest gaps between
‘evidence of emerging cleantech innovation’ and ‘evidence of commercialised
cleantech innovation,’ and so have improvement potential in scaling up efficiently.
Sweden scores above the rest of Europe apart from Finland.
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
South
Africa
South
Africa
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
South
Korea
South
Korea
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
Spain
Spain
General
Drivers
Cleantech
Drivers
Emerging
Innovation
Commer-cialised
Innovation
Mean
Sweden
Sweden

Mean
Switzerland
Cleantech
Drivers
Mean
Turkey
Cleantech
Drivers
Mean
UK
Cleantech
Drivers
Mean
USA
Cleantech
Drivers
47
Switzerland
Switzerland’s score is above average on all factors except commercialised
innovation drivers. The country stands out for its general innovation inputs,
despite weaker early-stage financing. Switzerland’s high emerging cleantech
innovation score is helped by strong environmental patent output. While the
country has very supportive government policies and relatively abundant
cleantech investors, its cleantech-specific innovation score is held back by low
attractiveness for renewables deployment. It does however have moderate
cleantech revenues and many M&As, but stays below average in commercialised
cleantech due to low IPO count and renewable energy consumption. Switzerland
scores above neighbours Germany and France, but below Scandinavia and the UK.
Turkey
Turkey has a very low emerging cleantech score but slightly above average
cleantech innovation drivers. The country has poor general innovation inputs,
though its entrepreneurial culture is solid. Turkey has few government policies
supporting cleantech and still lacks access to private finance. Similarly, the
country has seen little venture capital activity, produced few environmental
patents, and shows little evidence of commercialised cleantech innovation
across all indicators. The country ranks above neighbours Greece and Bulgaria.
UK
The UK scored well in all factors, with the exception of commercialised cleantech,
where it is less strong. While scoring average on entrepreneurial culture, the
UK has very good general innovation inputs (e.g. ease of credit, research and
education). Good access to private finance, and an infrastructure attractive to
renewables all boost the UK’s cleantech-specific innovation drivers’ score, although
the lack of political certainty around policy after 2020, has resulted in a slow-down
of investment in renewables. Strong VC investment and a number of high-impact
cleantech start-ups showed that there is evidence of emerging cleantech
innovation. However the UK performed less well on commercialised cleantech
innovation due to low renewable energy consumption and cleantech company
revenues. The UK sits in the top 10 overall, but falls behind Nordic countries,
the U.S. and Israel.
USA
The U.S. places third on the overall index, second only to Denmark for inputs
to innovation. The U.S. combines strong general innovation inputs with a
solid entrepreneurial culture. The country has an attractive infrastructure for
renewables and exceptional access to private finance, but lacks strong government
policies in support of cleantech. It tops the list for venture capital investment with
Israel, and produces numerous high-profile cleantech companies, resulting in a
very high emerging cleantech innovation score. The U.S. has strong M&A activity
and cleantech company revenues. However the U.S. lacks strong renewable energy
consumption, and future consumption may be postponed due to the so called
‘shale gas revolution’ which is currently driving energy prices down.
General
Drivers
Switzerland
Emerging
Innovation
Commer-cialised
Innovation
General
Drivers
Emerging
Innovation
Turkey
Commer-cialised
Innovation
General
Drivers
Emerging
Innovation
UK
Commer-cialised
Innovation
General
Drivers
Emerging
Innovation
USA
Commer-cialised
Innovation

THIS PUBLICATION
HAS BEEN PUBLISHED
IN PARTNERSHIP
BETWEEN
The Global Cleantech
Innovation Index 2014
NURTURING TOMORROW’S TRANSFORMATIVE ENTREPRENEURS
This report investigates the global state of cleantech
innovation in entrepreneurial start-up companies.
We are currently faced with a range of climate, energy
and economic challenges. Technology start-ups provide
one of the most important vehicles for developing and
commercializing innovation to meet these challenges,
while generating value for investors. This report reasons
as to where these innovative cleantech companies
will spring-up over the next decade, and shows which
countries are falling ahead and below the curve for
cleantech innovation.
The index was first launched in 2012.
This is the second edition.
www.panda.org/climateandenergy
www.cleantech.com

THE GLOBAL CLEANTECH INNOVATION INDEX 2014

Global Cleantech Innovation Index 2014

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