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May / June 2009
Volume 12 Issue 3

Green Technology Trends

For individuals and small businesses, switching to green technology products may pay off on a "feel good" level but not necessarily provide any long-term cost savings. Earlier this year, Small Biz Resource commented on an article published by ComputerWorld that described twelve green tech offerings. The discussion suggested that the three-year return-on-investment appears to be marginal. Choosing greener options for replacement purchases, however, may be a reasonable compromise.[1] Additional assessments and developments are described below.

Consumers & Investors

The Green Factor Study conducted by Strategic Oxygen, et. al., identified and surveyed information technology (IT) decision-makers in several countries. More than 70% of respondents would be inclined to purchase green products that were "convincingly" good for the environment and business. Nearly 60% of respondents indicated a willingness to pay higher prices for green products. Some of the higher rated brands identified by survey participants included Apple, Intel, Sony, HP, Microsoft, Dell, and IBM.[2]

In Sweden, an estimated 3,500 "clean tech" companies generate $14 billion annually. The country's strong international market position in mobile products is a blueprint for participating in the next big thing — green tech. Exports account for nearly half of Sweden's mobile tech market, and the energy-efficient ventilation system manufacturer, IV Produkt, generated nearly $12 million in overseas sales to 15 countries last year. For the next two years, the Swedish government is investing $180 million to support commercialization of green technology. Despite the global financial crisis, a venture capital investment manager for the Sustainable Technologies Fund forecasts strong growth over the long-term.[3]

The Competitive Landscape

Recent news provides additional insights about some of the "green band" companies identified by IT respondents in the Green Factor Study. At first glance, the common denominator for Apple, Intel, Sony, HP, Microsoft, Dell, and IBM is high tech, but much of the current buzz focuses on smart-grid development rather than electronics.

As reported by CNet in mid-May 2009, Cisco officials announced corporate plans to produce a variety of components for the electricity grid, seizing the opportunity to compete with companies such as IBM and Intel for an estimated $20 billion of communications product revenues that are expected to be spent by federal governments and utilities during the next five years.[4] In anticipation of demand from the carbon market, several companies (e.g., Intel and Dell) are promoting the potential impact of communications and information technologies to reduce emissions through the Digital Energy Solutions campaign.[5]

The Market Outlook

As suggested above, consumers can use their purchasing power to demonstrate product preferences. Similarly, corporations can improve their "green profile" by publicizing efforts to reduce pollution, improve energy efficiency, and/or invest in clean technologies. Such is the case for many U.S. companies. A 2007 article published by Investopedia.com highlights early efforts by UPS to test fuel savings through use of hybrid vehicles, which contributed to an unexpected benefit: Favorable consumer sentiments about the company.[6] In 2005, General Electric introduced its "Ecomagination" product line to reduce energy consumption and waste, which has generated solid revenues. By reducing and recycling electronic waste, HP was added to the "Global 100 Most Sustainable Corporations in the World" list.

The value of the green tech market, however, is difficult to estimate. Factbook 2009 cites a $148 billion market size in 2007 (Bloomberg). According to Cleantech Group, 2008 global venture capital investments in green tech reached an estimated $8.4 billion, a 38% increase over 2007 levels. Another source, Greentech Media, reported lower total expenditures but stronger annual growth, from $3.4 billion in 2007 to $7.8 billion in 2008.[7]