Canada’s Cleantech sector – growing but needs to be nurtured
Cleantech. It’s a term we’ve all heard and it’s a sector that has been gaining traction in Canada over the last five years. Canada has now become a major international player at the same time as cleantech has become a significant contribution to our economy. However, the sector isn’t perfect and there’s still more work that can be done. Determining what’s been accelerating the sector and what’s been hindering it can help pave the way to Canada being a global trailblazer.
The 10th annual Cleantech Forum was hosted in San Francisco on January 28th, 2019, where the Cleantech Group (CTG) released their annual Global Cleantech 100 list. The list includes industries with the most innovative and promising ideas for the future. Over 12,000 applications from over 60 countries were reviewed by a panel of experts to determine which 100 companies would make the list.
Canada has moved up in the global cleantech rankings. Twelve of the chosen companies in the Global Cleantech List are Canadian, and Canada is now the 4th highest cleantech country on the Global Cleantech innovation index, up from 7th in 2014. We’ve moved ahead of the U.S., Israel, and the U.K.
Cleantech is a growing economic and employment sector in Canada. According to the 2017 Canadian Clean Technology Industry Report done by Analytica Advisors, Canada’s clean technology industry brought in $13.27 billion in 2015 (up 8 percent from $11.63 billion in 2014) and employed 55,200 people from more than 850 companies.
The growing trajectory of the sector isn’t set in stone though – over the last five years retained earnings has been declining and a slower growth curve has been observed. All this information begs the question: what makes Canada a potential global leader and what are we still lacking?
What Canada has
Talent: With more than 850 companies and over 55,000 employees in the sector, Canada has already proven its dedication for cleantech and its wealth of talent. Canada’s potential as a leader in the sector has become more and has started to put it on the map.
Educated youth: The clean tech sector boasts of employing approximately 23 percent of people under 30, a percentage which rose from 20 percent the previous year. Having a strong proportion of youth that are investing time and talent into the sector sets a strong foundation for the future.
Innovation entrepreneurial support: Moving a company from the research and development phase to the commercialization phase can be difficult, and entrepreneurial venture organizations and programs can be a big help to companies that have the right ideas but are struggling to launch.
Canada has a number of organizations and programs that aim to connect companies with funds and investors to enhance entrepreneurship. These include MaRS, Ecotech, Export Development Canada, the Business Development Bank of Canada’s Cleantech Practice, Sustainable Development Technology Canada, Canadian Commercial Corporation, the Trade Commissioner Service and the Clean Growth Hub. Of the 12 Canadian companies that were listed in the Global Cleantech 100 list, six of them were affiliated with MaRS.
What Canada needs
Money: Yes, it’s always money. The cleantech sector requires significant capital. Finding funding is difficult for a number of cleantech companies trying to launch, and even after that point many companies find it difficult to grow – the cleantech sector in Canada is dominated by small to medium sized businesses.
Adoption record: To grow exports of cleantech and environmental products a proven track record of adoption in Canada is needed first. Before the rest of the world is ready to invest in us we need to show that Canada supports it.
Clear policy targets: Canadian environmental policy can be somewhat volatile. Setting clearer policy targets and more long term goals could lead to funding becoming more accessible due to investors finding less risk. It could also facilitate further engagement with government and the sector and help strengthen opportunities.