AP Technology Writer
San Francisco — The economy sure could use the Next Big Thing. Something on the scale of railroads, automobiles or the Internet — the kind of breakthrough that emerges every so often and builds industries, generates jobs and mints fortunes.
Silicon Valley investors are pointing to something called cleantech — alternative energy, more efficient power distribution and new ways to store electricity, all with minimal impact to the environment — as a candidate for the next boom.
And while no two booms are exactly alike, some hallmarks are showing up.
Despite last fall’s financial meltdown, public and private investments are pouring in, fueling startups and reinvigorating established companies. The political and social climates are favorable. If it takes off, cleantech could seep into every part of the economy and people’s lives.
Some of the biggest booms blossomed during recessions. The telephone and phonograph were developed during the depression of the 1870s. The integrated circuit, a milestone in electronics, was invented in the recessionary year of 1958. Personal computers went mainstream, spawning a huge industry, in the slumping early 1980s.
A year into the Great Recession, innovation isn’t slowing. This time, it’s better batteries, more efficient solar cells, smarter appliances and electric cars, not to mention all the infrastructure needed to support the new ways energy will be generated and the new ways consumers will use it.
Yet for all the benefits that might be spawned by cleantech breakthroughs, no one knows how many jobs might be created — or how many old jobs might be cannibalized. It also remains to be seen whether Americans will clamor for any of its products.
Still, big bets are being placed. The Obama administration is pledging to invest $150 billion over the next decade on energy technology and says that could create 5 million jobs. This recession has wiped out 7.2 million.
And cleantech is on track to be the dominant force in venture capital investments over the next few years, supplanting biotechnology and software. Venture capitalists have poured $8.7 billion into energy-related startups in the U.S. since 2006.
That pales in comparison with the dot-com boom, when venture cash sometimes topped $10 billion in a single quarter. But the momentum surrounding clean energy is reminiscent of the Internet’s early days.
Among the similarities: Although big projects are still dominated by large companies, the scale of the challenges requires innovation by smaller firms that hope to be tomorrow’s giants.
“Ultimately IBM and AT&T didn’t build the Internet. It was built by Silicon Valley startups,” said Bob Metcalfe, an Internet pioneer who now invests in energy projects with Polaris Venture Partners. “And energy is going to be solved by entrepreneurial activity.”
The action is happening at companies such as GreatPoint Energy in Cambridge, Mass., which has developed a technique for turning coal into natural gas more cheaply and efficiently than previous methods.
GreatPoint plans to break ground next year on a power plant in Houston that will cost $800 million and create thousands of construction jobs, said its CEO, Andrew Perlman. Dow Chemical Co. and energy giants AES Corp., Suncor Energy Inc. and Peabody Energy are GreatPoint investors.
“The opportunities,” Perlman said, “are staggering.”