Sweden: A Global Leader in Cleantech Innovation
The transition to a carbon-poor society will require clean technologies - so-called "cleantech" - and cleantech innovation. Cleantech encompasses a broad set of goods and services that are competitive with traditional goods and services but have superior environmental performance.
A large and diverse set of cleantech innovators is likely of great help in diversifying the search and matching new technologies to different situations. As a global leader in cleantech innovation, Sweden has cashed in on its domestic improvements in the environment and helped others do the same.
The world's credible climate researchers are convinced that reducing greenhouse gas (GHG) emissions is vital to reducing the risk of dangerous climate change. Consistent with this, the total amount of man-made carbon dioxide emissions in the atmosphere needs to be reduced.
Many climate researchers argue that worldwide man-made greenhouse emissions need to be reduced to zero. Independently of the exact path, policies like Kyoto and those proposed for Copenhagen will require deep cuts in fossil carbon emissions.
Reach those policy goals and there will be a large and growing market for new goods and services that substitute for emissions-intensive goods and services. Many believe that differently priced emissions will radically transform the global economy.
Factors Contributing to Sweden's Leadership in Cleantech
In the realm of entrepreneurship, Sweden is recognized for its broad range of support. The country has one of the world's highest per capita numbers of startup companies, and several seed funds from its developed finance industry target early-stage tech startups.
Swedish VCs have invested in more than 100 active environmental technology startups, attributing a successful sale or a financial inpatient to around 35 of them. In addition, private technology groups and public investment companies, such as Stockholm-based Investor, Latour, and the City of Stockholm, both operate venture capital arms.
During the last two decades, 29% of publicly traded Swedish companies in environmental technology have been acquired. As a percentage of all of the transactions that have occurred, the number of acquisitions increased after 2001.
Low market capitalization, financial difficulty resulting from subcontracting for the development stage pharmaceutical and electronic component industries, and lack of dedicated entrepreneurs led to acquisitions in cases of mergers and acquisitions.
This low level of mergers and acquisitions compared with other sectors can be addressed through the establishment of commercial enterprise competence development if successful companies are not interested in staying autonomous.
Sweden's successful transition to a cleaner economy is primarily a result of widespread corporate interest. An increasing number of multinational companies have positioned innovation and production in Sweden in the past few years.
Swedish-based companies account for 20% of the world's total cleantech output, the highest number in the world relative to each country's respective GDP. Many Swedish firms rank global No. 1 or 2 in their niche and sell 40% of their products to the export market.
Sweden's cleantech system is regarded as the world's most competitive across specialized technology knowledge, dense collaborative support for business intrapreneurs, along with cooperative efforts for building international sales. The domestic market acts as a playing ground and as a reference market for these global leaders and their products.
Case Studies of Successful Swedish Cleantech Companies
The international market for environmental technology is growing rapidly, and environmental technology companies are benefiting from a number of positive trends. Technological progress and urbanization are leading to an increased generation of waste and wastewater, meaning that societies are being forced to invest in basic water and waste treatment facilities.
In addition, the economic incentive to lead a more resource-efficient and cleaner life is increasing as modern consumers have shown that they are willing to pay more for products and services that are environmentally friendly, a trend that also drives industry to address environmental concerns. Now we are facing a period of great challenges related to the environment.
The calculations for bids of current and future spending for infrastructure, energy use, and raw material, water and waste management are considerable and increasing.
A common element of successful Swedish cleantech companies is the fact that they provide solutions for growing market needs. Due to international environmental agreements and increasingly stringent authorities, the environmental sector is predicted to continue to grow, and there are an increasing number of new global business opportunities for Swedish cleantech companies.
Sweden has already developed some of the world's leading cleantech companies in several technology areas and is increasingly meeting demands for green technology solutions. Swedish companies have large potential for reducing greenhouse gases and other pollutants, while at the same time they earn money for the country.
Government Policies and Initiatives Supporting Cleantech Innovation
Sweden has long played host to a highly integrated environmental technology sector that works actively on solutions to the sustainability challenges that are faced regionally, nationally, and globally. Around 15,000 companies develop and offer services and products that trigger sustainable environmental and climate development. In 2014, these firms generated approximately SEK 300 billion in turnover, SEK 120 billion of which came from exports.
The Swedish government is promoting an environment-enhancing definition of the 'environmental technology sector' – in other words, a definition of the industry based on which companies aim to provide sustainable products and services aimed at replacing and reducing the use of products whose production and use causes substantial environmental stress.
The Swedish government's vision is to create a fossil-free welfare state by 2045. Against this background, the Swedish government has launched a range of initiatives that will facilitate the global deployment of sustainable environmental technology and position Sweden as a forerunner in this field.
The stated purpose of these initiatives is to drive the market introduction of innovative environment-enhancing technological solutions to the many global sustainability challenges. The inclusion of several global challenges and the promotion of ambitious energy and climate goals in the EU's long-term strategy are given concrete application at national level through this package of initiatives.
Their overarching objective is to reduce global emissions in order to meet the two-degree target and at the same time add value for Swedish industry through access to new global market opportunities.
Future Trends and Challenges in the Swedish Cleantech Sector
Climate challenge news - nations that emit a majority of the climate-changing greenhouse gases have been loathe to agree to binding reduction targets. But there are clear signs of climate change, even though the continuing economic climate is providing other short-term priorities.
As environmentalists, utilities, and petro dollar economies struggle to find a mechanism to address the climate problem, there is a growing consensus that binding reduction targets are a necessary step. The importance of reducing the US' percentage of emissions has been stressed by many non-US interests, from industry people who want to maintain their US source and/or use eco technologies_peak oil disciples who need the price of fuels to be higher, environmentalists who seek a lower US emissions profile, and foreign competitors to the US who would become less competitive with a high-cost domestic source of carbon emissions.
Some studies predict huge losses in the US economy if elected actions are not taken. Some projections are vague, largely untested, and a round of "that-will-affect-me-more-than-you" discussions have ensued.
Technology mash-up will change asset profile - as the precursors of the smart grid have matured, numerous technological capabilities have become available. The smart grid will harness numerous innovative appliances, mobile capabilities, Wi-Fi technology, e-commerce capability, unique audience measurement tools, and thousands or even millions of "smart" devices.
These new capabilities will embrace the gradual development and implementation of ambitious smart grid concepts and plans. Mandatory implementation of full function smart grids would revolutionize our infrastructure, but it is unaffordable at this time.
Trends: New businesses in smart grids will appear - as the evolution of grid technology necessitates continued innovations, new business opportunities will also be created. The existing electrical generation industry is increasingly employing renewable sources and large-scale electric transportation, and hence challenging the electric grids to accept these new sources and also to provide a method of supporting the base load of electricity demand.
The avalanche of hybrid and electric vehicles coming to market over the next several years may force major changes in the technological development of the electric grid. Thus far, electric vehicle and smart grid development have evolved in near isolation. However, that situation will change dramatically as the exponential growth of PHEVs or electric vehicles will soon significantly add to existing power use.