Energy Efficiency as an “Export-Oriented Cluster”

As I’ve mentioned, the central Puget Sound region has been selected by the Brookings Institute as one of three regions across the country to pilot their new “Metropolitan Business Plan” concept. The idea is that regions should be able to submit to the federal government a “reverse RFP”; that is, rather than applying to hundreds of federal programs siloed across dozens of agencies, regions would be able to submit comprehensive business plans that receive more flexible, performance-based, funding.  (see the one pager here)

What we proposed to Brookings was that we would focus on energy efficiency as an export-oriented cluster. First off, there’s a lot of excitement about clean technology in our region and state, but what we’ve learned is that our real advantage and opportunity is in the energy efficiency segment of that market: green building (e.g.-Mithun), energy management (e.g.-McKinstry), and smart grid (which includes everything from software developed by companies like Microsoft to smart meters developed by companies like V2Green to energy storage developed by companies like EnerG2). Second, with all the opportunities that abound in clean tech, there’s definitely something more tangible and manageable about selecting one aspect and seeing how you can move the needle.

One of the interesting points that Brookings raised with us, though, was what do we mean by “export-oriented.” Our region’s economic development strategy is “cluster-based,” which means we focus on selling goods and services outside our region so that we bring in the wealth-generating capital that expands our economy and creates jobs. On a practical basis, we don’t actually care whether we’re selling that good or service to people in Olympia, Orlando or Oslo…as long as it’s outside our region, it’s growing the pie.

But of course, the US defines exports as outside the country and our state happens to be one of the most trade-dependent in the country. Some of our biggest companies including Boeing and Microsoft make a majority of their revenue from international sales. The Governor likes to tell the story about how the president of China came to Washington and offered to buy all the biodiesel we could sell him, but we don’t generally think about how we might take advantage of that market for our clean technology services. Certainly there are challenges to doing international business, but obviously lots of opportunities.

One of the cool things about approaching this project as a business plan is that one of the key elements of a business plan is identifying the potential markets for your product. I know that we will definitely spend some good time in our process over the next six months trying to figure that out in the most objective, data-driven manner. Whether it turns out that our energy efficiency goods and services are best suited for customers across the border or down the highway, we’ll find out.


One Response to Energy Efficiency as an “Export-Oriented Cluster”

  1. This recommendation is right on target. Energy efficiency is the fastest growing area in clean technology because there are immediate savings in both dollars and carbon that can be captured, and because it creates jobs. Our Carbon Free Prosperity report featured energy efficiency services in the built environment as one of the best opportunities for the region to create jobs and build strong companies. This conclusion has been echoed by the City of Seattle’s consultants and the Washington Clean Energy Leadership Council. Let’s keep making it happen!

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