Barriers and opportunities in the commercialisation of cleantech

Finland can offer significant new environmental technologies and innovations to the rest of the world, according to a new assessment by VTT Technical Research Centre, which has investigated barriers and opportunities in the commercialization of environmental technology and developed models for assessing the environmental and market potential of innovations.

In the research, water technology was used as the example, but VTT says the results can be applied to other environmental technologies.

The research resulted in the creation of the Value Assessment Framework (VAF), which takes into account the central variables influencing the international success of an environmental innovation. VTT’s approach focuses on the innovation process, special characteristics of environmental innovations, the environmental benefits of new products and lead market thinking.     

The starting point of the research project was the idea that an innovation is created as a result of a specific regional need or expertise. A comparison of the lead market factors of different regions and targeted marketing give the innovation a good opportunity to become successful internationally.

A small country which manages to solve a local problem may be able to provide internationally significant innovations. For example, the lack of natural resources in Japan forced the country to develop recycling systems and to make more efficient use of existing resources. In Denmark, the lack of fossil resources promoted the development of wind power.

The development is primarily governed by the tightening and increasingly harmonised legislation adopted worldwide. More stringent environmental legislation can be an important means to create an internationally successful business in the long term.

In Finland, environmental engineering has largely been dominated by public administration and legislation. Due to climate change and rising energy prices, the environment has become a factor which affects all business activities. Private markets have also contributed to the development, which has led to the improvement of energy and climate technology solutions, among others.

Taking the example of water: It is estimated that 1.2 billion people live in regions that suffer from a lack of water; at least 1.6 billion people do not have the money to buy water of good enough quality. By 2025, water consumption in industrialised countries is estimated to increase by 20 per cent compared to the 2000 levels. In developing countries the increase in consumption will be around 50 per cent. At the same time water production and distribution infrastructure is becoming obsolete in many countries.

This represents a huge market potential for new water technologies. But the Finnish water technology sector is divided between the public sector, a few large private players and a number of small and medium-sized companies. Given this fragmentation of the sector, it is important to create different forms of cooperation when developing and marketing product and service concepts, says VTT.

VTT’s publication, “Water business is not an island: assessing the market potential of environmental innovations”, is available online at: http://www.vtt.fi/inf/pdf/publications/2009/P718.pdf