Leaping Into the 6th Technology Revolution

by:cycjet     2020-08-27
We're at likelihood of missing out on some of the most profound opportunities offered by the technology revolution that has just begun.
Yet many are oblivious to the signs and are in danger of watching this become a time period noisy turmoil compared to the full-blown insurrection needed to launch us into an eco-friendly economy. What we require is not only new spinning wheel, but fabrics woven with nanofibers that generate solar electric powered. To make that happen, we need a radically reformulated way of understanding markets, technology, financing, and the role of government in accelerating change. But will we understand the opportunities before they disappear?
Seeing the Sixth Revolution for What it Is
We are seven years into process of what analysts at BofA Merrill Lynch Global Research call the Sixth Revolution. A table by Carlotta Perez, which was presented during a recent BofA Merrill Lynch Global Research luncheon hosted by Robert Preston and Steven Milunovich, outlines the revolutions that are unexpected in their own time that triggered the one in which we find us.
1771: Mechanization and improved water wheels1829: Development of steam for industry and railways1875: Cheap steel, availability of electricity, and the utilization of city gas1908: Inexpensive oil, mass-produced car engine vehicles, and universal electricity1971: Increase of information and tele-communications2003: Cleantech and biotech
The Vantage of Hindsight
Looking to 1971, since that Intel's introduction from the microprocessor marked the beginning of any kind of era. However in that year, this meant little to people watching Mary Tyler Moore and The Partridge Family, or enjoying Tony Orlando & Dawn and Janis Joplin. People would remember humanity's steps on the Moon, opening relations between US and China, possibly the successful finishing of the Human Genome Project to 98.99% accuracy, and possibly in part because of of Prometea, the first horse cloned by Italian scientists.
According to Ben Weinberg, Partner, Element Partners, 'Every day, vintage American companies with promising technologies get been unable to deploy many because of a lack of debt stress. By filling this gap, the government will ignite the mass deployment of innovative technologies, allowing technologies ranging from industrial waste heat to pole-mounted solar pv to prove their economics and gain credibility previously debt niche markets.'Flying beneath our collective radar was early floppy disk drive by IBM, the world's first e-mail sent by Ray Tomlinson, the launch of the 1st laser printer by Xerox PARC as well as the Cream Soda Computer by Bill Fernandez and Steve Wozniak (who would found the Apple Computer company with Steve jobs a few years later).
Times have not changed much. It's 2011 and many of us face a similar disconnect with the events occurring around unites states. We are at very same of 1986, a year on the cusp belonging to the personal computer and the net fundamentally changing our the entire global population. 1986 was also 12 months that marked the beginning of a significant financial shift into new markets. Venture Capital (VC) experienced its most substantial finance-raising season, with approximately $750 million, and the NASDAQ was established aid create a market for firms.
Leading this charge was Kleiner Perkins Caulfield & Beyers (KPCB), a firm that turned technical expertise into most likely the most successful IT investment capital firm in Silicon Pit. The IT model searched for a portion of big successes to offset losses: a trade like the $8 million in Cerent, which was sold to Cisco Systems for $6.9 billion, represent up for about a lot of great ideas that didn't quite for being.
Changing Financial Models
But the VC model that worked so well for information and telecommunications doesn't work in the new revolution. Not only is the financing scale of the cleantech revolution orders of magnitude bigger than the last, this at the start of the game even analysts are struggling to to determine future.
Steven Milunovich, who hosted the BofA Merrill Lynch Global Research lunch, remarked that each revolution has an innovation phase which takes as long as 25 years, with an implementation phase of another 25. Most money fabricated from in the main 20 years, so real players want to be in early. But the question is: Get in where, for the way much basically whom?
There is still market scepticism and uncertainty about the staying power of the clean energy revolution. Milunovich estimates that institutional investors don't believe in global warming, and adopt a 'wait and see' attitude complicated by government impasse on energy security legislation. This sort of looking at these markets, their motivation ranges from concerns about oil scarcity, supremacy in the 'new Sputnik' race, the shoring from homeland security and - for some - important about harm of global warming. Many look askance at people that see people today are in the middle of a fundamental change in how we produce and use energy. Milunovich, for each one of these reasons, is 'cautious the actual planet short term, bullish in the long.'
The Valley of Death
Every new technology brings with it has for new financing. Involving sixth revolution, with budget needs significantly those of IT, rest is moving from idea to prototype to commercialization. The Valley of Death, as a new Bloomberg New Energy Finance whitepaper, Crossing the Valley of Death pointed out, is the space between technology creation and commercial adulthood.
But some investors and policy makers continue for you to that private capital will fuel this gap, almost as much ast it did the work. They express concern over the debt from government programs such as stimulus funds (American Recovery and Reinvestment Act) which have invested millions in new technologies in the clean energy sector, as well as helping states with rebuilding infrastructure various other projects. They question why the traditional financing models, which made the United states the world leader in information technology and telecommunications, can't be made to work today, if for example the Government definitely get straightened out.
But analysts from many sides of financing assume government support, of some kind, crucial to move projects forward, because cleantech and biotech projects call for a much larger input of capital to have to commercialization. This gap not only affects commercialization, but one other affecting investments in new technologies, because financial interests are concerned that their investment wouldn't see fruition - get through to commercial enormity.
How new technologies are radically different within the computer innovation.
Infrastructure complexity
This revolution is highly dependent on an existing - but aging - energy infrastructure. Almost 40 years after the beginning of the telecommunications revolution, we are still troubled with a communications infrastructure to get fragmented, redundant, and useless. Integrating new sources of energy, and making better use of what we have, is an increasingly complex - and more vital - task.
According to 'Crossing the Valley of Death,' the Bloomberg New Energy Finance Whitepaper,
'The events of the last few years confirm that needed to be only the particular public sector's help that the Commercialization Valley of Death can be addressed, in a choice of the short and the long term. Only public institutions have 'public benefits' obligations and the associated mandated risk-tolerance for such classes of investments, along with no capital in order to make a change at guitar scale. Project financiers have shown they will certainly pick down the ball and finance the third, 23rd, and 300th project that uses that new technology. It is the initial technology risk that credit committees and investment managers won't tolerate.'Everything runs using fuel and energy, from the homes to your cars in our industries, schools, and hospitals. Most of us have experienced the disconnect reasonable when caught in a blackout: 'The air-conditioner won't work so I I'll activate a fan,' only to realize we can't do one of two. Because energy is so vital to each aspect of our economy, federal, state and native entities regulate almost every part of how energy is developed, deployed, and monetized. Wind farm developers face a patchwork quilt of municipal, county, state and federal regulations in getting projects to scale.
Incentives from government sources, as well as utilities, pose both an opportunity and a threat: the market rises and falls in direct proportion to funding and rewards. Navigating these challenges takes time and legal expertise: neither that are in abundant supply to something.
Development costs
Though microchips are creating ever-smaller electronics, cleantech components - with regard to wind turbines and photovoltaics - are huge. They can't be created in a garage, like Hewlett and Packard's first oscilloscope. A new generation of biofuels utilizing nanotechnology isn't likely to take place out of this dorm room, as did Michael Dell's initial business selling customized computers. What this signifies for sixth revolution projects is available much larger funding needs, at much earlier period.
Stepping up and supporting innovation, universities - and increasingly corporations - are partnering with early stage entrepreneurs. Substantial providing technology resources, pertaining to example laboratories and technical support, as well as management expertise in marketing, product development, government processes, and financing. Universities get funds from technology transfer arrangements, while corporations invest in the new technologies, expanding their product base, opening new businesses, or providing cost-benefit and risk-analysis of various approaches.
But despite such help, venture capital and other private investors are needed to augment costs that simply can't be born by themself. These investors look to some assurance that projects will produce revenue in order to return founded investment. So concerns the actual years Valley of Death affects even initial phase funding.
Time line to completion
So many of us balk at two year contracts for that cell phones that work involved . talk of earning such requirements illegal. But energy projects, by their size and complexity, be prepared over years, if not decades. Commercial and industrial customers look instead of spread their costs over ten to twenty years, and contracts cover contingencies like future business failure, the sale of properties, or the prospect of renovations that may affect the actual long run viability of this original mission.
Kevin Walsh, managing director and head of Power and Sustainable energy at GE Energy Financial Services states, 'GE Energy Financial Services supports the development of CEDA similar institution because always be expand accessibility of low-cost capital to the projects and companies in which we invest, and always be help expand the niche for technology provided other GE businesses.'
Michael Holman, analyst for Lux Research, noted that your particular $25 million investment in google morphed into $1.7 billion 5 years later. In contrast, a top energy storage company started with a $300 million investment, and 9 years later valuation remains not known. These are the kinds of barriers that can stall the drive we must have for twenty-first century technologies.
Looking allow bridge the space in new cleantech and biotech projects, is a proposed government-based solution called the Clean Energy Deployment Administration (CEDA). You will find house and senate version, as well as an apartment Green Bank bill to provide gap car financing. Recently, over 42 companies, representing many industries and organizations, signed a letter to President Obama, supporting the Senate version, the '21st Century Energy Technology Deployment Activity.'
Both residence and senate bills offer create, a good office on the inside US United states doe (DOE), an administration may possibly be tasked with lending to risky cleantech projects for the purpose of bringing new technologies to provide. CEDA would be the bridge required to ensure the successful establishment of the green economy, by partnering with private investment to bring the funding needed to obtain these technologies to climb. Both versions capitalize the agency with $10 Billion (Senate) and $7.5 Billion (House), with an expected 10% loss reserve long terminology.
By helping a new technology move more effectively through pipeline from idea to deployment, CEDA can substantially increase private sector investment in energy technology development and deployment. It can create the far more successful US clean energy industry, along with the attendant economic and development overseas benefits.
Who Benefits?
CEDA funding could be observed as helpful for even essentially the most unlikely agencies. Ted Horan is the Marketing and Business Development Manager for Hycrete, a profitable business that sells a waterproof concrete. Virtually no company that springs in your thoughts when we think about clean technologies, he recently commented on why Hycrete CEO, Richard Guinn, is a signatory for a letter to Obama:
'The allocation of funding for emerging clean energy technologies through CEDA is an important step in solving our energy and climate tests. Companies on the cusp of large-scale commercial deployment will benefit greatly and help accelerate the adoption of obama emphasized clean energy practices throughout our financial crisis.'In his opinion, the manufacturing and construction that is actually push us out of a stagnating economy will be supported by innovation coming from the cleantech and biotech groups.
Google's Dan Reicher, Director of Costs rising and Energy Initiatives, large supporter from the inception of CEDA. He's testified before both houses of Congress, and any signatory throughout the letter to President Obama. Google's interest in clean and renewable energies back again several changing times. The company is actively involved in projects to scale back costs of solar thermal and expand the utilization of plug-in vehicles, and is promoting the Power Meter, some thing which brings home energy management to anyone's desktop-for free.
Financial support includes corporations like GE Energy Financial Services, Silicon Valley Growth capital such as Kleiner, Perkins Caulfiled and Byers, and Mohr Davidow Ventures, and energy Capital including Hudson Clean energy and Element Partners.Can a product like the senate version of CEDA leap the Valley of Decline?
As Will Coleman from Mohr Davidow Ventures, said, 'The Devil's in the details.' The Senate version has two significant changes from previous proposals: a focus on breakthrough compared with conventional technologies, and political independence.
Neil Auerbach, Managing Partner, Hudson Clean energy
The clean energy sector are often dynamic growth engine for your US economy, but not without thoughtful government support for private capital enhancement. **[Government policy] promises to serve to be a valuable bridging tool to accelerate private capital formation around companies facing the challenge, and help ensure that the US remains at the forefront for the race for dominance in new energy technologies.
Breakthrough Technologies
Coleman said that 'breakthrough' includes the first or second deployment of a new approach, not only the game changing science-fiction solution that finally brings us limitless energy at free of cost. The Bloomberg New Energy white paper uses the term 'First of sophistication.' Bringing solar efficiency up from 10% to 20%, or bringing manufacturing costs down by 50%, would be described as a breakthrough the objective help us begin to compete with threats from China and India. Conventional technologies, folks are competing with existing commercialized projects, would get less emphasis.
Political Independence
Political independence is the surface of mind in case you spoke or provided an analysis of this bill. Michael Holman, analyst at Lux Research, expressed the strongest concerns that CEDA doesn't focus enough on incentives to gather innovative start-ups with larger established enterprises.
'The government itself embracing the responsibility of deciding what technologies to back isn't quite likely going to work-it's a method with a bad track driving record. That said, it is important for your federal government to lead - present-day financing model for bringing new energy technologies publicize is broken, and new approaches are badly used.'For many, the senate bill has merits over home bill, in providing for that decision making process defeat technologists and private sector pro's.
'I think both sides [of the aisle] understand this is one particular program, and must enable brand new to be flexible and workout a few different approaches. The Senate version empowers CEDA to have a portfolio approach and manage risk over time, which i think is nice. In the House bill, CEDA to be able to undergo may vary according to appropriation process, which runs the chance politicizing every investment decision in isolation and before we are able to see the portfolio age.' - Will Coleman, Mohr Davidow.Michael DeRosa, Managing director of Element Partners added,
'The framework must ensure that the selection of practical technologies, optimization of risk/return for taxpayer dollars, and appropriate oversight for project selection and financial. **Above all, these policies must be designed with free markets principles to mind and cease subject to political approach.'If history is any indication, rarely are those involved with the middle of game-changing events associated with their role in may one day be well-known for their sweeping persuade. But what we can see clearly now may be the gap between idea and commercial maturation. CEDA certainly offers some hope that they might be yet see the cleantech age grow up into maturity. But will we act quickly enough before all of this momentum and hard work that has brought us this far falls flat as other countries take leadership roles, leaving us in after you?
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