Grant Thornton report highlights role governments can play in supporting cleantech sector

By Ed King

Business leaders in the cleantech sector want more policy certainty and government support according to new research from global accountancy firm Grant Thornton.

The company’s latest International Business Report reveals the green business sector is expanding rapidly around the world, despite continued economic concerns in Europe and the USA.

According to Grant Thornton 68% of cleantech businesses expect to increase revenues over the next 12 months compared with 52% of businesses globally, while 62% expect profits to rise compared with just 38% globally.

But concerns over regulations, red tape, and a lack of skilled workers weigh heavily on the sector, and the report’s authors have called on governments to take a lead from countries like South Korea, who are investing heavily in green energy and technology.

With governments meeting in Bangkok for the latest round of UN climate talks, Nathan Goode, global leader cleantech at Grant Thornton said it was time they delivered on promises over funding and technology transfer.

“Cleantech is still a relatively young sector so it not surprising to see innovation outgrowing talent. However, with unemployment rates high, particularly in many mature markets, rapid growth in the sector clearly offers an opportunity for economies to boost employment and output,” he said.

“Governments can help in this regard through targeted industry and energy policies. For example in South Korea, R&D and manufacturing incentives as well as energy efficiency and renewable energy targets have been introduced to attract investment.

“The cleantech sector continues to demonstrate remarkable rates of growth, with economies such as China increasingly playing a leading role.

“Global economic uncertainty is weighing on short-term business growth prospects but the data suggests that dynamic businesses in the cleantech sector are willing to invest in bold growth plans to boost competitiveness.”

Confidence in the green economy appears to be high among business leaders, according to Grant Thornton. 52% of the companies they spoke to expect to increase research and development spending over the next 12 months and 51% plan to invest more in plant & machinery, both well above the global averages.

Globally the cleantech sector expanded by 31% per annum in 2009 and 2010. Although it slowed to 10% in 2011, this is still well above average GDP growth rates.

In China the sector grew from $17.5 billion to $71.3 billion between 2008 and 2011, a rise of 77%. In the United States, the sector expanded by 17% between 2010 and 2011 to $46.3 billion.

Cleantech sector leaders will be watching this week’s UN climate talks in Bangkok closely.

The informal round of negotiations could provide clues on which states will sign up to an extension of the Kyoto Protocol, how the proposed global emissions treaty for 2015 is progressing and what financial incentives are on offer for developing states to decarbonise their economies.

Australia’s government gave the low-carbon economy a boost last week when it announced it would join the European Union’s Emissions Trading Scheme (EU-ETS) by 2018. South Korea, New Zealand and China are also working on implementing similar schemes.

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