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Asia’s Clean Tech Tigers

Wednesday, September 1st, 2010
clean

Many have said the United States will soon find itself embroiled in fierce competition with other nations over the fast-growing clean-energy market.

In the winter 2010 issue of the journal Issues in Science and Technology,, the study “Rising Tigers, Sleeping Giant” presents the idea that the three rising “clean technology tigers” of Asia, namely Japan, China and South Korea, will soon be able to nudge aside the U.S. and dominate future clean energy markets. These nations, the authors say, have been investing heavily in many key areas -- related infrastructure, manufacturing capacity, and research and investment among them. As a result of these heavy investments, business confidence and investor risk in those countries will be considerably reduced, further drawing foreign investment in clean energy.

By stark comparison, in the U.S. relatively little funding in terms of investment in infrastructure, clean-tech R&D, and other key areas is being allocated for direct support of American clean energy industries. In addition, there are too few aggressive policy initiatives being undertaken under current American energy and climate legislation --initiatives that might reduce or overcome the existing deficit between these Asian nations and the U.S.

China, Japan and South Korea are working to develop innovation and clean technology manufacturing clusters, like Silicon Valley in the United States. The establishment of these clusters will provide a home for people with significant expertise -- entrepreneurs, universities, manufacturers, and others -- to establish networks of relationships, leading to attractive environments for business, which would itself become the basis for a significant competitive advantage for these countries.

Although many of their initiatives are still in the planning stages, others have begun to bear fruit. All three nations are ahead of the U.S. in terms of deployment of new nuclear power plants. American wind turbines are manufactured abroad; America produces less than 10 percent of the total number of solar cells produced worldwide; and is also losing ground in terms of hybrid and pure-electric vehicle technology and production. In terms of raw numbers, as a whole, while it has a significant advantage in several (especially in terms of clean-tech patents registered), the U.S. is beginning to fall behind the other three nations. From 2009-2013, the U.S. is expected to invest $172 billion in clean technology, whereas China, Japan and South Korea will invest $509 billion in these technologies. In terms of research and innovation, while the U.S. is ahead of each of the three Asian countries, each is crafting its own initiatives to close this gap. Lastly, in terms of large-scale clean-energy manufacturing capacity, the three Asian nations, particularly China, have surpassed the U.S. -- each has its own nuclear-reactor designs; China and Japan are ahead in terms of solar PV, and China leads the U.S. in wind.

The report says that even if current clean-tech legislation in the U.S. does become law, China, Japan and South Korea will invest thrice as much as the U.S. over the next five years, and will attract most of the private investment in the industry as a result—thereby intensifying their lead over the U.S., perhaps for the foreseeable future.

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