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Ensuring good research gets to market

04/11/2008

  • Experts interviews

Building a good business case is key to translating successful research results into marketable products and services according to a new and unusual European eco-innovation expert group: Greenovate! Europe.

Astrid Severin is Executive Manager and Co-founder of Greenovate! Europe, a European expert group for innovation in clean technologies. The group was established to help close the gap perceived in the European eco-innovation sector between successful publically-funded research and commercialisation of marketable products. Greenovate helps researchers build business cases for successful exploitation of good research in any technology, process or application that uses less energy or resources, or results in less waste or pollution. It also works closely with the different stakeholders involved – from business angels and venture capitalists to innovation networks and technology transfer centres – to enable this to happen. In addition, it advises existing companies on how to green their products and processes, and it works with policymakers to create the necessary conditions for successful eco-innovation.

Why start Greenovate! Europe?

We started Greenovate Europe because we were frustrated by the low commercialisation rate of public research in the environmental technology sector. At the same time, we had developed a successful methodology that allowed us to make the business case for a research result – increasing the chance of an idea being picked up by a venture capitalist from 1 or 2 percent to 16 percent.

Getting products and services to market is not only a question of financing but also an issue of successfully translating a research result into a business opportunity. We often see ourselves as translators explaining a result in the way that investors can understand. Researchers can tell how useful a technology is but not where the market for this technology is and how much money it could make. We help establish this business case – which business model you should take, should you set up a company to commercialise a product or go for a licensing agreement…. We then help in business creation: drawing up the business plan, assembling the team – researcher, marketers, … – and finding investors. Our clients are normally research institutions, but we also work with investors to find business opportunities in research results.

What does the group do?

We have put together a group of eco-innovation experts that functions as an innovation project team with the complementary expertise and skills needed for a project. These skills include: business planning and modelling, patenting and licensing, investor readiness and contact, team building – all the things you need to make a successful business case out of an innovation.

Our members come from all over Europe, allowing us to establish business cases from Greece to Finland and from the UK to Hungary. We have ten Member States represented in the group currently, but we are always looking to enlarge the group to gain wider coverage. We focus on supporting companies, research institutions and industries as well as helping policymakers shape their eco-innovation programmes in a more effective way.

What is the difference between eco-technology and eco-innovation?

Eco-innovation covers a large range of technologies, processes and services – from the classic eco-technology sectors such as air or soil pollution directly to eco applications for industry helping them use less energy, fewer resources and to pollute less. For companies this results often in the application of new business processes or models rather than new technologies, although there are some new technologies that can help these processes.

Moreover, the greening of industry is becoming mainstream as many companies learn they can save an enormous amount of costs by being a little bit smarter and greener. A good example is the French Post, which has paid eco-driving lessons to 60,000 postmen. With this simple measure, they saved 10,000 tons of CO2 and millions of Euro in fuel consumption. Moreover, eco- or green innovation not only helps companies to save money, it also stimulates a greater demand for eco-innovative or greener products.

How is Europe positioned in the global eco-innovation market?

We are leading the way in many areas, with some of the EU Member States very well developed. Studies indicate the foremost countries are Germany, France and the UK . You also have Denmark with its lead market in wind turbines, Spain is developing the market for concentrated solar-thermal power and Austria has an excellent approach to energy efficiency. The European Commission has now come up with the lead market initiative, with at least four of the six markets selected involving eco technologies and services: sustainable construction, recycling, renewable energy and bio-based products.

Europe is also advancing in eco-innovative services such as measuring and predicting wind speed and sunshine on a short- and medium-term basis. Other knowledge-intensive services become increasingly important just take the case of eco-design for eco-innovation (solar panels and wind parks also need to be recycled at the end of their life) or design software enabling architects to develop more ecological buildings. Today, the market for zero-emission houses is very low, we have 1 000 being built each year – only 0.1% of the market. These European inventions need to brought into the mainstream.

So, overall, Europe is in a good starting position but will have to fight hard to keep our leading position. This means the political and regulatory framework has to be in place to support company development. For example, public authorities have a big part to play through green procurement; and they have a major role in construction, with responsibility for some 40% of all building and infrastructure work. The fragmented nature of the building industry with lots of small companies makes it essential for the public authorities to react and at an EU level. In addition, it is essential to work with smart standards that can be adapted easily. A good example is the Japanese Top Runner programme for white goods that the European Commission is keen to use for other areas.

Environmental regulations should not be used to protect our own industries from overseas competition. Rather, we should co-operate with these countries as they offer enormous potential for energy savings and use of environmental technologies. Although we are European, we do not limit ourselves to Europe. We will do whatever is good for the climate and the environment.

What are the barriers to implementing eco-innovation?

The main barriers seem to be economic – one area where Europe is definitely not leading is in investment in green innovation. Here the USA is at the forefront and Europe needs to provide more resources to grow the sector and to bring more of its excellent environmental research to the market.

Companies need a clear and predictable regulatory framework so that they can accurately predict the value of their environmental investment and the cost of not making any such investments. As of today, we do not even know if the price of carbon will be going up or down post-Kyoto.

Last but not least, education and awareness-raising amongst companies and consumers remain important in this very complex area. Without them, we will not be able to achieve our ambitious objectives.

Has there been progress over the past 10 to 15 years?

Industry is now making a huge step forward. Over the past two or three years there have been a lot of approaches from many companies that will make a huge difference. And with prices going up, consumers need to react as well. This change comes from a multitude of reasons – awareness provoked by storms and other natural catastrophes, rocketing energy costs and tougher regulation. Regulations are a good sign but they could be even more ambitious. And all this could happen faster, especially transport, construction and food/agriculture need to make a quantum leap to become green industries.

More information:

Greenovate Europe: http://www.greenovate-europe.eu/

La poste: http://www.laposte.fr français

Lack of understanding

The gap in support from research to market was also highlighted in the recent FUNDETEC report on barriers to eco-innovation in Europe. The FP6 FUNDETEC project set out to assess funding schemes for the development of new activities and investments in environmental technologies. It objective was to identify major barriers hindering development of eco-technologies in Europe and provide recommendations to overcome them. Its final report in March 2008 highlighted the lack of understanding of the technologies concerned by financial institutions as the main barrier. Technology developers need to learn how to communicate clearly to provide a positive view to counter banks’ rigid risk assessments. Europe also needs an integrated approach linked with ETAP proposals to mobilise funding instruments in favour of eco innovation.

More information: http://www.fundetec.eu