By Rick DefieuxThis article first appeared in Greentech Media.
The most common objection to any form of industrial policy is that governments, as opposed to markets, are considered unqualified to select those sectors most worthy of investment. But what happens when governments do pick the right targets and then back that up with the resources, influence and patience needed to guide and support these fledgling industries to long-term success?
Central government programs in Asia, most notably in China and Korea, are indeed on the mark as they mobilize public policies and resources in order to subsidize and nurture their domestic cleantech industries. Emerging sectors such as solar power, wind power and electric vehicles are all characterized by the need to achieve scale before they can be cost-competitive. This makes the availability of subsidies a matter of critical importance. Additionally, extensive coordination between public and private interests (something best provided by central governments, the more central the better) is vital to creating the complex infrastructure required for a large-scale shift to renewable energy and electric vehicles. (Read the remainder of the article on Greentech Media)
Rick Defieux has served as Chair of the SJF Ventures investment committee since co-founding the firm in 1999. He is an advisor and venture partner at Battelle Ventures and 360ip, a venture capital and intellectual property management firm with operations in China, Korea, Japan and Singapore.
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