We are in danger of missing out on a few of the very profound opportunities provided by the technology revolution which has only started.
Nevertheless many are oblivious to the indicators and are at risk of seeing this become a span of noisy turmoil as opposed to the full-blown insurrection required to release us into a green market. What we need isn’t a brand new spinning wheel, however, cloths stitched with nanofibers that produce solar power. To make that happen, we require a radically reformulated manner of knowing markets, technology benefits, funding, and the role of authorities in accelerating shift. However, will we know the opportunities before they vanish?
Viewing the Sixth Revolution for What It’s
We’re seven years to the start of analysts in BofA Merrill Lynch Global Research predict the Sixth Revolution. A desk by Carlotta Perez, which was introduced during a current BofA Merrill Lynch Global Research luncheon hosted by Robert Preston and Steven Milunovich, summarizes the revolutions which are sudden in their time that results in the one where we find ourselves.
- 1771: Mechanization and enhanced water wheels
- 1829: Development of steam for business and railways
- 1875: Inexpensive steel, availability of power, and using town gas
- 1908: Cheap oil, mass-produced internal combustion engine vehicles, along with international power
- 1971: Expansion of information and telecommunications
- 2003: Cleantech and biotech
The Vantage of Hindsight
Looking back in 1971, we all know that Intel’s introduction of the microprocessor marked the launch of a new age. Individuals would recall humankind’s first steps on the Moon, starting connections between the US and China, possibly the successful conclusion of the Human Genome Project to 99.99% accuracy, and also the birth of Promethea, the first horse cloned by German scientists.
Based on Ben Weinberg, Partner, Element Partners, “Every day we see American firms with promising technologies which are not able to deploy their goods due to a lack of debt funding. By filling this gap, the authorities will spark the mass deployment of advanced technologies, enabling technologies which range from industrial waste heat into pole-mounted solar PV to demonstrate their economics and earn credibility from the debt markets.”
Flying under our collective radar has been the very first floppy disk drive by IBM, the world’s first email sent by Ray Tomlinson, the initiation of the first laser printer by Xerox PARC, and the Cream Soda Computer by Bill Fernandez and Steve Wozniak (who’d found that the Apple Computer company with Steve Jobs a couple of years after ).
Times haven’t changed that much. It is 2011 and a lot of people confront a similar disconnect with all the events happening around us. We’re in the equal of 1986, annually around the cusp of their personal computer and the Internet basically altering our planet. 1986 was also the year that marked the start of a significant financial change to new markets. Venture Capital (VC) has undergone its substantial finance-raising season, together with roughly $750 million, and the NASDAQ was created to help create a marketplace for these businesses.
Leading this charge has been Kleiner Perkins Caulfield & Beyers (KPCB), a company that turned the specialized experience into potentially the most successful IT venture capital company in Silicon Valley. The IT model appeared for a proportion of large successes to cancel losses: an investment such as the $8 million in Current, that had been sold to Cisco Systems for $6.9 billion, could compensate for a whole lot of great ideas that didn’t quite make it.
Shifting Financial Models
However, the VC version that worked so well for information and telecommunications does not function in the new revolution. Not only is that the funding scale of this cleantech revolution orders of magnitude larger compared to the past, this early in the match analysts are fighting to find the future.
Steven Milunovich, who hosted the BofA Merrill Lynch Global Research lunch, also commented that every revolution comes with an innovation stage that might last for as long as 25 decades ago followed by an implementation period of the following 25. Most money is created from the first 20 decades, so actual players wish to get in early. However, the question would be: Get in where for how much and with whom?
There’s still marketplace skepticism and doubt regarding the staying power of this clean energy revolution. Milunovich quotes that lots of institutional investors do not believe in global warming, and adopt a”wait and see” attitude complicated by authorities’ impasse on energy security laws. For people that are looking at those markets, their motivation ranges from worries about oil scarcity, supremacy from the”new Sputnik” race, the shoring up of homeland security, and for a few – a concern regarding the consequences of climate change. Many look askance at people who see that we’re in the middle of a fundamental shift in the way we create and use energy. Milunovich, for these reasons, is”careful in the brief term, bullish on the long.”
The Valley of Death
Every new technology brings with it demands new funding. From the first day revolution, with funding demands 10 times those of IT, the challenge will be moving from idea to prototype into commercialization. The Valley of Death, as a current Bloomberg New Energy Finance whitepaper, Crossing the Valley of Death pointed out, is that the difference between technology production and industrial maturity.
However, some investors and policymakers continue to trust that private funds will fuel this gap, as much as they did in the past. They express concern over the debt out of government programs such as the stimulation funds (American Retrieval and Reinvestment Act) that have spent countless new technology in the energy industry, in addition to helping nations with rebuilding infrastructure and other projects. They wonder the conventional financing versions, that created the United States the world leader in information technology and telecommunications, can not be forced to operate now, in the event the Government could only escape the way.
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