New research has found that the UK is not fully exploiting the growth potential of the rapidly expanding low-carbon sectors.
Globally, the market for low-carbon environmental goods and services is expected to hit £4 Trillion in 2015.
The report commissioned by Shell Springboard – ‘Engineering growth – enabling world-class entrepreneurship in the low-carbon economy’ - found that, in the green energy industry, Britain is producing double the number of university spin-outs as the United States relative to GDP, but they raise less than half the equity raised by their American counterparts.
The research team, led by Professor Erkko Autio at Imperial College Business School, suggests that UK low-carbon entrepreneurs need to be more ambitious and that the UK needs to do more to help them scale up their ventures.
The study warns that Britain risks a “brain drain to the US and its more effective scale-up environment”, with the UK economy standing to lose out on £6.7 billion of additional annual growth over the next eight years.
When it comes to developing low-carbon ventures, the UK has a strong track record: over the period from 2000 to 2013, UK universities were twice as efficient in spinning-out low-carbon ventures as their US counterparts per $trillion in GDP (2000–2013).
However, when it comes to scaling up these low-carbon ventures, the US outperforms the UK on a number of fronts. Notably, the report shows that UK suffers from an ‘aspirations deficit’ relative to the US: in order to reach the US level of innovation, growth and internationalisation aspirations, UK entrepreneurs need to raise their ambition levels.
The research used a variety of methods to collect and analyse data on university spin-out companies in the US, UK and Germany and identified spin-outs commercialising low-carbon innovations. This data was combined with secondary data describing the countries’ entrepreneurial ecosystems, including their scale-up environment.
Professor Autio, Chair in Technology Venturing and Entrepreneurship at Imperial College Business School, said: “In order to successfully transition to a truly low-carbon economy, innovation is needed across all areas of industry, society and economic life. This research shows that we not only need new technologies, but also new business models and new entrepreneurial attitudes. A new breed of entrepreneurs will be spearheading such innovation, from university spin-outs to individual entrepreneurs, and we must do everything we can to ensure their scale-up performance is the best it can be.”
Article text (excluding photos or graphics) © Imperial College London.
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