With the debate over the debt ceiling over (for now) the focus in Washington and around the country can now shift back to getting our economy moving. One industry holds promise for creating valuable new companies, exportable products and technologies and high-paying jobs for American workers – the advanced energy industry.
Broadly defined, advanced energy refers to energy sources, systems and solutions that offer higher performance and reliability, benefiting our businesses and our communities. We see the growth of the advanced energy industry when we drive by wind turbines, or notice that our neighbors are getting solar panels installed, or buying a hybrid car.
But that is just the tip of the iceberg. Over the next few years, advanced energy companies will see major growth, as our energy-hungry world seeks out clean and reliable energy sources to drive industry and personal consumption.
Advanced energy is now a domestic source of economic growth and job creation. The sector employs 2.7 million Americans, according to a recent Brookings Institution study. This is nearly as large as the information services industry and larger than the oil and gas industry.
Advanced energy means jobs across the country. It’s not isolated in one region. North Carolina now has more than 78,000 advanced energy jobs and is growing at an annual rate of 6 percent; while Minnesota has 58,000 jobs and 5 percent growth. Consider as well that U.S. energy markets are inherently local. They are made up of a network of regional clusters, geographically concentrated businesses within an industry that benefit from working in close proximity.
Because of this local-driven market structure, regional advanced energy innovation clusters are well positioned to drive growth and create jobs on a state and regional level.
The advanced energy industry is affecting the broader economy, from the construction industry to service providers. Much like the “Internet economy” created new companies and changed the way traditional businesses approached everything from manufacturing to marketing, the “advanced energy economy” has the potential to have that same global impact – and the United States is poised to lead the way.
Business and labor interests are taking notice. Labor understands old-line industries won’t return with high-paying jobs, and thousands of businesses have emerged to produce clean technology.
Colleges and technical schools are racing to teach the skills demanded by the advanced energy economy. Meanwhile, investors are making bets to win the biggest pay-off.
But the rest of the world has taken notice as well — and there’s the rub. Unless we act decisively, the U.S. could end up sitting on the sidelines while the advanced energy boom happens. We are already falling behind Germany and China when it comes to investing in this industry. We don’t want these jobs to go there as well.
Historically, the U.S. has used its competitive advantage to gain market share and define industries. We can do the same now.
Our strengths include robust capital markets; the world’s leading researchers and institutions, and a population prepared to adopt new technologies. The American worker has proven, time and again, to be highly adaptable, productive and up to the challenge of new technologies.
Which countries or regions lead this time around won’t be an accident. Business and government leaders with the foresight to create the right environment will lead their countries to the forefront. The most aggressive will define it and drive standards for decades to come.
To make this happen, business, government, academia and the investment community must find ways to advance our common interests. Washington must understand that the advanced energy industry has the potential to boost the economy the way the Internet did. Academia must concentrate its efforts on creating the best centers of innovation and learning, which can serve as incubators for new ideas and new companies that shape the industry.
If we do, we can create high paying jobs for Americans, dominate the global clean energy markets and make our country both more secure and environmentally sound. If we don’t, our economy is likely to continue to be held hostage by outside interests that both destabilize our future and exacerbate our economic challenges.
It’s our choice.
As we claw our way out of the Great Recession, we need to focus on what is best for the country. In scanning the horizon, we see no better opportunity for prosperity than in the “advanced energy economy.”
Tom Steyer is the founder and co-managing managing partner of Farallon Capital Management. Hemant Taneja is managing partner of General Catalyst Partners, an investor in early-stage companies. He co-founded and was the chairman of NECEC.org, a non-profit focused on New England’s advanced energy economy.
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