This article was co-written by Josh Suskewicz.
The conversation at the Copenhagen climate conference is all about policy. But regulation won't stop global warming by itself. Nor will simply spending money on clean technologies. In the US, President Obama has earmarked a half billion dollars of initial funding for a breathtaking array of renewable technologies. This looks like bold action, but it isn't nearly bold enough. We need to be thinking on a far, far grander scale. With its financial and intellectual resources, the U.S. needs to lead this charge. But instead of backing individual technologies, the country should build a whole city of technologies.
What if we were to go into an area of our country that's seriously in need of reinvention — the Midwest — and build a city that would offer a living, breathing opportunity to create an entire clean-tech infrastructure? That's not nearly as utopian as it sounds. Here's why.
Moving from an oil-based economy to one fueled by sustainable, clean power requires more than a technology shift. It requires an infrastructure shift — a concept we explored in a recent Harvard Business Review article. Technologies don't replace technologies — systems replace systems. Fossil-fuel powered transport isn't a technology; it's a system comprising countless interconnected businesses (and business models), markets, government policies, and, yes, technologies. Replacing gas-powered cars with electric ones isn't a matter of simply swapping in new engines. It requires building the entire system that will make electric transport economically viable. Entrepreneur Shai Agassi is, at this very moment, building a comprehensive electric-vehicle infrastructure in Israel that encompasses not just the cars but the charging stations and cutting-edge power management grids and software such an infrastructure requires — a system.
Back to the green city. In the United Arab Emirates, the government of Abu Dhabi is building a clean-tech system of its own: Masdar. It's a city entirely powered by sustainable technologies, and it's their effort to create the Silicon Valley of clean tech. Masdar is being built on government-donated land, bolstered by business-friendly tax incentives and buoyed by $15 billion in government funds. It is slated to complete its first neighborhood by year's end, which will be anchored by a clean tech-focused university that just launched its inaugural class. The first commercial tenants are set to arrive in 2012; General Electric has already signed up.
In the scheme of things, $15 billion isn't an outrageous amount for a government to pony up to launch what figures to be one of the primary industries of the 21st century. Indeed, the Obama administration has pledged more than $100 billion to clean tech efforts; China, which is also making its own forays into eco-cities, is spending $200 billion; and the G20 industrialized nations have pledged upwards of a combined $400 billion.
The U.S. should take a small chunk that $100 billion and apply it to a Masdar-like
effort of its own. Imagine what a focused, coordinated effort among the government, private sector, and academic institutions could do. Rather than build from scratch, the government could use this grand-scale opportunity to revive a declining industrial city. What if the U.S. set up a smaller version of Masdar in the Midwest, say within Detroit, with the aim of creating its own Silicon Valley of clean tech?
Read the rest at the Havard Business Conversation Starters blog.
