Published on May 25th, 2012 | by Amy Brown0
Why the Nordic countries are global leaders of cleantech.
At a time of diminishing natural resources and growing global concern over climate change, the cleantech industry is seen by many as offering solutions to some of the world’s most important challenges. Governments around the world increasingly recognize the need to achieve greater energy independence and energy security by moving away from the fossil-fuel era. And many entrepreneurs and innovators are stepping up to the plate.
This is particularly true for the Nordic countries, considered among the global leaders in the move towards cleantech. There are a number of reasons why the Nordic countries have embraced cleantech. Innovation is a big part of it. So are the region’s roots in creating major industries within engineering and technology. Add to that the desire to apply technological insight to environmental challenges, strong government backing, and a high level of public environmental awareness, and you have the ingredients for a successful cleantech industry.
Setting the framework
The Nordic countries have set the framework for investment in cleantech by establishing progressive goals, targets and visions towards a more sustainable world. Denmark, for example, aims to supply 35 percent of its total energy from renewables by 2020 and has a goal to be the world’s first fossil-free country by 2050. Sweden, Norway, Finland, and Iceland also have ambitious environmental aims and are investing in alternative sources of energy.
“Political commitment is the foundation of why we are so successful today,” says Marianna Lubanski, Business Development Director, Cleantech, at Copenhagen Capacity, which assists investors establishing business in Greater Copenhagen.
Sten Engström, head of Cleantech Investment for Invest Sweden, which promotes trade and investment in Sweden, agrees. “Our research base and supportive government regulation are the primary reasons why Sweden has been successful in cleantech.”
This support has also extended to public institutions which have channeled significant public support to the sector: Tekes and Sitra in Finland, Swedish Energy Agency and Vinnova in Sweden, Fornyelsesfonden and Danish Energy Agency in Denmark, Norwegian Enova and Innovation Norway. The region also has a number of strong technical research institutions such as VTT in Finland, DTU in Denmark, KTH and Chalmers in Sweden that conduct materials and renewable energy-related research and have close ties to industry.
United we stand
The Nordic countries have a long tradition of regional collaboration. According to the Nordic Innovation Centre, the region combined is the world’s tenth largest economy. Because they are progressive in their thinking and their policies, as well as in their cleantech development, the Nordic countries present an attractive platform for companies around the world to test drive their technology.
“We see ourselves pretty much as a little lab for the rest of the world,” says Lubanski. “Another advantage is that all the stakeholders in cleantech in Denmark are integrated and work collaboratively. I mean, most of us went to school together.”
With such small home markets, companies in the Nordic countries are motivated to go global early. “We are heavily dependent on foreign export. You can’t compete on your home market if you are not competitive globally,” says Jonas Velander, Director for Cleantech Inn Sweden, which coaches new and established companies in the promotion and adoption of cleantech innovations.
The Nordic cleantech sector has only experienced its first wave of growth. The pipeline of new start-ups is thriving while other companies are establishing greater levels of maturity as they move from early to late-stage development and towards commercial deployment. Many Nordic success stories have already emerged, attracting attention from countries like China, which is making huge investments in energy efficiency.
“We want to show that it is possible to be free of fossil fuels, to change your energy system completely,” says Lubanski. “We think we can be a good example for the rest of the world.”