Generally it seems that consumer technologies – even massive, life-changing ones – develop and commercialize at a much faster rate than energy and infrastructure technologies.
Why is that? It’s not for lack of good and innovative ideas; both the infrastructure and the energy sectors are virtually humming with new technologies and innovations seeking fertile ground for commercialization. And it’s not for lack of will; governments, policy planners, public advocacy groups, investors and the general public are all keen to find new, cost effective and sustainable infrastructure and energy technologies.
The problem is often a lack of funding and financing. In the consumer technology sector, because the consumer buys the product directly, there is an obvious route to commercialization, and the market is awash with investors looking for the next big thing.
But not so in infrastructure technology. Few investors play in these markets. And, since a large number of infrastructure operators are still publicly run, there are only a few corporate investors that are well capitalized enough to carry the risks and costs associated with incubating new ideas and innovation.
In our white paper Accelerating Sustainable Energy Innovation prepared in collaboration with the World Economic Forum (WEF), we argue that the public sector must play a more active role in encouraging, supporting and matching private funding of new ideas and innovations, especially in early stages of development.
The same is true for all infrastructure. We cannot sit back and wait for one or two altruistic entrepreneurs like Elon Musk to tackle the problems that face our infrastructure today. We need new approaches and new technologies right across the infrastructure space – ultimately so all of the UN’s sustainable development goals are met, improving quality of life for every individual on the planet. But few investors or star-studded entrepreneurs are investing into the technologies which are required to make that possible.
The good news is that many countries have already adapted their infrastructure and energy policies to encourage investment into new technologies. In the Canadian province of Ontario, for example, the Ministry of Transportation has created a Highway Infrastructure Innovations Funding Program with regional universities and colleges. Various feed-in tariff schemes in the UK and across Europe are designed, in part, to encourage continued investment into renewable and distributed technology innovation. A number of governments are leveraging public-private partnerships, working with private capital and encouraging innovation through co-investment vehicles.
But we believe that governments could be doing more to catalyze investment in infrastructure technology. And it starts with bold moves, a common roadmap and a willingness to collaborate – with other governments and with the private sector – to create synergies in innovation development and accelerate the innovation process.
In the WEF white paper, we propose a range of potential measures that could be taken, including the establishment of an international fund to finance energy technology projects, blending both public and private sources of capital. We suggest the development of financial instruments for the automatic co-investment of public R&D funds with venture capital funds. And we advocate for international collaboration on energy technology roadmaps through public-private collaboration. We believe many of the same tools can be used to drive investment into the wider infrastructure technology sector as well.
What all of our recommendations recognize, however, is that the responsibility of carrying new infrastructure innovations through to commercialization is often too great for one government, country or company to shoulder alone.
Yes – it will require supportive policy, legislation and funding mechanisms from individual governments. It will also take the participation of the private sector – both investors in early stage ideas and companies and strategic partners willing to test and commercialize concepts in market.
But most of all, it will require collective action. We must work harder to build connections between technology startups, financial investors and industry players. We must encourage more international collaboration through influential implementing bodies. We must be bold in spirit and innovative in approach.
We cannot wait another 40 years for the next big infrastructure technology to commercialize. We need to start investing in the future.