Research from the Grant Thornton International Business Report (IBR) shows that, according to businesses, the main drivers in the demand for cleantech products are increasingly commercial and that the adoption of cleantech is now motivated by the need to reduce costs and increase profits.
Eugene Sparrow, partner, Privately Held Business for Grant Thornton New Zealand, said that while many businesses would like to adopt cleantech principles, the economics just do not add up.
“It’s a tough environment for many companies and until these businesses can see a cost saving they will be reluctant to adopt cleantech options. Many look upon green philosophies and cleantech principles as discretionary and something they will only adopt if there are clear economic advantages.
“Unfortunately our size is also against us. We are a country of small businesses without the scale to benefit from the adoption of some cleantech options. There is no doubt that these businesses are all mindful of being green and clean, but if it is going to cost, then it will have to wait,” he said.
Sparrow said that when you look at overseas companies, they are able to see obvious benefits from cleantech solutions and are adopting them.
“It is no longer about just environmental concerns for them, it’s about whether alternative solutions can boost the financial performance of their company. We’re now seeing the potential for these technologies to compete with traditional forms of energy and the expectation that, over time, they should.
“It means that the cleantech sector is on the road to commercialisation but not necessarily all the way there. We’re at a stage now where the value proposition for cleantech is to save money, and consequently demand for cleantech is set to increase.”
According to the report, cleantech appears to have parallels with the biotech industry, in that R&D is being used to explore new concepts and applications for existing technologies. As a result R&D and IT are receiving greater focus as companies exploit advances in areas such as storage and smart grid technologies.
“In addition, the cleantech sector is adopting a broader base on which to apply its learning, putting greater focus on areas such as waste and water although a restraint on capital, especially in Europe, is holding back some of this development.
“Cleantech is an emerging sector and it will infiltrate New Zealand business, but not quite yet. The industry does need to mature more, to the point where the benefits that will occur will help small companies as well as large with efficiencies and cost savings,” he said.
Eugene Sparrow
Partner, Privately Held Business
T +64 (0)9 308 2978
M +64 (0)21 357 799
E Eugene.sparrow@nz.gt.com