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Edited by Rolf Wüstenhagen and Robert Wuebker
Chapter 11: Venture Capital Investment in the Greentech Industries: A Provocative Essay
Martin Kenney* 1 INTRODUCTION In the first decade of the twenty-first century there has been increasing awareness of environmental issues and recognition that these are now global in scope. This has occurred for many reasons and is perhaps best epitomized in the global warming discussion. The dramatic rise of China and India, in particular, reoriented the debate about the sustainability of the current trajectory of fossil-fuel usage and environmental degradation. Quite simply, if the economic growth of China, initially, and then India were to follow the historical trajectory of fossil-fuel energy usage and resource consumption that Japan, Taiwan, and Korea followed, the environmental impacts would be nothing short of monumental. This chapter does not propose to debate the need for ‘green technologies’ or the merits of particular technologies. It accepts that the current trajectory of the fossil-fuel-based energy system is not sustainable, environmentally or ethically. Evaluating the merits of particular energy generation or environmental technologies is beyond the scope of this chapter and, perhaps, at this early stage unknowable. Rather, the chapter addresses the question of whether venture capital (VC) in its current organizational form offers significant promise for funding the commercialization of what we shall term ‘greentech’. To presage the following discussion, this chapter is skeptical about the possibility that VC investment can become an important component of the financing of greentech. This is mainly because the investment criteria for successful venture investing are unlikely to be met by most green technologies. This is a contrarian perspective as the...
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