A viable cleantech ecosystem must have both the innovative research institutions necessary to produce clean technology products and the financial resources necessary to convert those products into commercially viable businesses. Massachusetts has an abundance of both. In 2009, the state ranked second (only to California) in venture capital investment in the sector with businesses receiving $356 million in 27 venture capital deals. The state has received $1.8 billion in venture capital investments since 2005. One reason for such heavy investment stems from the plethora of academic institutions in the state that have dedicated themselves to cleantech innovation. Massachusetts is home to the top cleantech university in the country, the Massachusetts Institute of Technology (MIT), whose programs and competitions have helped support numerous successful ventures in the past several years including Sun Catalytix, A123 Systems, and FastCAP Systems. In addition, Massachusetts boasts seven of the Aspen Institute’s 2009 World’s Top 100 Green MBA programs (Babson, Bentley, Boston College, BU, Brandeis, MIT, and UMass Boston) and is home to arguably the top undergraduate institution and graduate business school in the country, Harvard University.
Cleantech innovation, however, does not occur exclusively in university classrooms or corporate conference rooms. Massachusetts’ public leaders and policy makers have implemented pioneering policies essential to driving growth in the cleantech sector. In 2008, Governor Deval Patrick signed The Global Warming Solutions Act, which many consider to be the strongest greenhouse gas (GHG) reduction act in the U.S., mandating a 10-25?eduction from 1990 GHG levels by 2020 and an 80?eduction by 2050. Under the Green Jobs Act of 2008, he established the Massachusetts Clean Energy Center (MassCEC) which became the first state authority in the U.S. exclusively devoted to job creation and economic development in the clean-energy sector. On top of this, his Green Communities Act has one of the nation’s most aggressive energy-efficiency programs—including $2 billion in public and private investments (three times more per capita than the amount invested in California). Massachusetts is also a member of the Regional Greenhouse Gas Initiative (RGGI), the Northeast’s regional cap-and-trade system which has generated $79 million in carbon credits for Massachusetts. Such progressive policies have helped the state earn a large portion of federal grants in the cleantech sector. Massachusetts recently received 16 of 123 awards from the DOE’s Advanced Research Projects Agency-Energy (ARPA-E) program—a total of $62.8 million and by far the most of any state per capita.
These policies have also encouraged the success of numerous cleantech clusters, organizations, and incubators. Just recently, DOE Secretary Steven Chu announced that a partnership between the Fraunhofer Center for Sustainable Energy Systems, the New England Clean Energy Council (NECEC), MassCEC, and the Association of Cleantech Incubators of New England (ACTION) would receive a $1 million grant over three years to expand the Fraunhofer TechBridge Program and establish the Innovation Acceleration Program (IAP). The IAP project combines technical prototyping services from Fraunhofer Techbridge with the NECEC’s entrepreneur network to develop start-ups’ business plans and validate their market value. MassCEC and the ACTION incubators add services and support helping to connect these entrepreneurs to industry professionals and funding sources. According to Peter Rothstein, President of the NECEC, this “collaboration will accelerate lab-stage opportunities to venture validation and private sector support. It is clear evidence of the partnering taking place across the regional New England cleantech innovation community.” Such a grant was undoubtedly made possible by the preemptive government policies which have made Massachusetts a center for cleantech growth and development.