Clean technology soars past aerospace manufacturing in jobs created
Working in the MaRS cleantech practice admittedly makes you a little biased as to the importance of clean technology in Canada. While I don’t think anyone would argue over the environmental benefits of many of the clean technologies that have been developed, I do think the economic benefits need to be more widely acknowledged.
The recent “2013 Canadian Clean Technology Industry Report” by Analytica Advisors explores the size of the Canadian clean technology sector and uncovers some interesting and extremely encouraging facts about the industry. The report discusses the industry’s revenue, jobs, exports and innovation, investigating why continued growth of the cleantech sector is beneficial.
Working with entrepreneurs in the clean technology industry, it’s important for MaRS to stay up to date with the industry’s progress and metrics. Two of the biggest metrics MaRS measures are the number of jobs created and the revenue generated by our companies. In 2011, our cleantech startups generated 170 new jobs and raised $59 million in revenue. To see a snapshot of the MaRS cleantech practice, including capital raised and new jobs created by our clients, as well as client revenue, check out this infographic created by MaRS client Venngage.
I hope to put some context around the facts presented in Analytica Advisors’ latest report and to give a hint as to what we can expect in the future from our Canadian cleantech entrepreneurs.
The cleantech industry is relatively young, having been around for about 20 years. That being said, over the past two decades the industry has continued to grow—even through the economic downturn—to become a significant player in the Canadian economy. With $10.6 billion in revenues and 1% of the global market share, the Canadian clean technology industry is playing an important role both domestically and internationally.
The clean technology sector in Canada directly employs over 52,000 people, up from just over 44,000 in 2010. To put that into perspective, these employment numbers are comparable to those of oil and gas extraction, mining production and extraction industries, and exceed those of the aerospace industry. If growth rates continue through 2020, estimates are that the industry will employ between 96,000 and 126,000 Canadians.
Research and development
With MaRS building the next generation of growth companies, most of our startups are exactly that—startups—and incorporate a large amount of research and development (R&D) into their businesses. As a whole, the clean technology industry spent over $1 billion in R&D in 2011, bringing the total R&D expenditure between 2008 and 2011 to $3.8 billion. The really interesting thing, at least from MaRS’s perspective, is that 71% of the R&D spending—$2.7 billion—was invested by small and medium enterprises (SMEs).
It is widely acknowledged that Canada represents a relatively small market, making exports an important revenue stream for Canadian cleantech companies. Analytica Advisors has found that clean technology companies are nine times more likely to export than the average SME. Additionally, four out of five cleantech companies are exporting products, generating $5 billion in exports in 2011. Diversification of the market doesn’t seem to be an issue for our companies either. Just over half (56%) of clean technology exports went to the United States, with the remaining exports sold all over the world.
The future of clean technology
The clean technology sector in Canada already comprises over 700 companies, operating all over the country. Seventy-two percent of the industry’s companies are at the product commercialization stage or later, meaning they’re already providing products for their customers. The huge focus on R&D investment and the pipeline of innovative companies that MaRS sees every day is sure to continue to develop and grow the industry in Canada in the years to come.
Global demand for clean technology was estimated at $1 trillion in 2011, and is predicted to grow to between $2.2 and $3 trillion by 2020. This is great news for Canada, as we’re in a fantastic position to play an invaluable role in the clean technology industry going forward.
Jennifer manages the accelerating ventures program at MaRS, supporting high-growth ventures in the cleantech, health and information & communications technology (ICT) sectors.See more…