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To bring "green" technologies to the market, start-ups need a lot of patience.
Cleantech start-ups in the USA that cooperate with government research agencies outperform their competitors both in terms of patents and funding. That is the conclusion of a study by the Technical University of Munich (TUM), the University of Maryland and the University of Cambridge. In the cleantech sector, where development processes can extend over many years, public-private partnerships could prove valuable in other countries, too.
In the USA there are numerous state-funded national research agencies. Under the Department of Energy alone, 17 such institutions conduct research, including the National Renewable Energy Laboratory (NREL), for example. There is public debate, however, on the question of whether and to what extent these institutions should be working with companies in applied research and in technology transfer.
Researchers at the Technical University of Munich (TUM), the University of Maryland and the University of Cambridge looked at data collected between 2008 and 2012 on around 650 cleantech start-ups – in other words, companies offering products or services based on "clean" technologies such as renewable energy and recycling. They looked specifically at patents and funding as indicators of innovation and business success of young companies.
150% increase in investor funding in a year
The study showed an average 73% increase in patenting activity every time a start-up collaborated with a government agency. This figure applies to each individual cooperative venture. The study also found that every time a cleantech start-up licensed a technology developed by a government agency, the company secured – on average – 150% more funding deals in the following year. By that measure, they were therefore more than twice as successful as other start-ups. Some of the most successful alliances were forged away from the big tech hubs such as Silicon Valley.
The researchers believe that public-private partnerships are especially valuable in the cleantech sector, and the energy sector in particular. Because it takes a long time to develop new technologies in these areas, companies face tougher conditions when starting out as compared with the IT sector, for example. This disadvantage could be overcome with public agencies, with their longer-term perspectives.
Key insight applies to Germany, too
The research landscape in other countries, including Germany, differs from that in the USA. However, it can reasonably be assumed that the key insight can be applied in other parts of the world, says Claudia Doblinger, professor for Innovation and Technology Management at TUM and first author of the study: "Start-ups don't have decades for their development work. What they're good at is aligning new technologies with market opportunities. When the strengths of both worlds meet, they can complement one another perfectly. A research policy that does not rely exclusively on the private sector can play a major role in addressing the climate challenge but also in fostering the growth of small businesses – twin objectives at the heart of many policy discussions, such as the so-called Green New Deal in the United States."
"Our findings should be taken into consideration whenever funding for public research into sustainable energy is being debated," says co-author Laura Diaz Anadon, a professor of Climate Change Policy at the University of Cambridge. "Cleantech that comes from public-private partnerships will be essential for meeting global climate and sustainability goals."