Business and Management INK

Sparking a Revolution In Clean Energy?

March 14, 2013 708

Editor’s note: We are pleased to welcome Alfred Marcus of the University of Minnesota, whose article “The Promise and Pitfalls of Venture Capital as an Asset Class for Clean Energy Investment: Research Questions for Organization and Natural Environment Scholars,” co-authored by Joel Malen of the University of Minnesota and Shmuel Ellis of Tel Aviv University, was published in the Organization & Environment March 2013 issue.

UntitledI wanted to know if venture capital (VC) could spark a revolution in clean energy like it sparked a revolution in information technology. What was the potential of this type of funding for clean energy and what were the limitations? Undoubtedly funding was rising rapidly but would VC be as transformative in this area as it was in information technology? Could it spawn great companies and change the way we live?

oaeThe persistence of VC funding of clean energy given that the payoffs are hard to achieve and the fact that VCs have under a decade to achieve these payoffs is  surprising. The first decade of the 21st century was not a good one for VCs. IPOs and exits were down and the VCs thrive in an era when these are rising. Moreover, many of the good opportunities in other areas in which they had invested like information and medical technology were no longer as vibrant or as promising. That they moved into clean energy and stuck with it to the degree that they did was surprising.

If we are concerned about sustainability, then we have to understand how the financing of companies that will achieve a more sustainable future will take place. These companies need long term support but VCs are not in the business of providing long term support. They provide transitional money for companies that have substantial promise but are not quite ready to commercialize their ideas. The really pioneering ideas in clean energy are only taken up by the true believers among the VCs and often their staying power in the industry is not long because the pension funds, endowments, and individual investors who provide money to the VCs need reasonable returns in a relatively short time period. Where in our society will we find the funding for long term risk taking? Without long term risk taking we will simply make incremental adjustments and miss the truly transformative potential of entrepreneurial ideas.

Read “The Promise and Pitfalls of Venture Capital as an Asset Class for Clean Energy Investment: Research Questions for Organization and Natural Environment Scholars”  in the new issue of Organization & Environment.

amarcus-120Alfred Marcus is the Edson Spencer Endowed Chair in Strategy and Technological Leadership at the Carlson School of Management and at the Technological Leadership Institute (TLI) College of Science and Engineering University of Minnesota. Professor Marcus’ research has been published by the Strategic Management Journal, the Academy of Management Journal, and other academic journals. He also is the author or editor of 15 books including Cross-Sector Leadership for the Green Economy: Integrating Research and Practice on Sustainable Enterprise (2011) and Strategic Foresight: A New Look at Scenarios (2009). He was co-editor of a special 2011 fall issue of the California Management Review on regulatory uncertainty and the natural environment.

Business and Management INK puts the spotlight on research published in our more than 100 management and business journals. We feature an inside view of the research that’s being published in top-tier SAGE journals by the authors themselves.

View all posts by Business & Management INK

Related Articles

Challenging, But Worth It: Overcoming Paradoxical Tensions of Identity to Embrace Transformative Technologies in Teaching and Learning
Business and Management INK
March 27, 2024

Challenging, But Worth It: Overcoming Paradoxical Tensions of Identity to Embrace Transformative Technologies in Teaching and Learning

Read Now
Data Analytics and Artificial Intelligence in the Complex Environment of Megaprojects: Implications for Practitioners and Project Organizing Theory
Business and Management INK
March 21, 2024

Data Analytics and Artificial Intelligence in the Complex Environment of Megaprojects: Implications for Practitioners and Project Organizing Theory

Read Now
Putting People at the Heart of the Research Process
Business and Management INK
March 20, 2024

Putting People at the Heart of the Research Process

Read Now
Coping with Institutional Complexity and Voids: An Organization Design Perspective for Transnational Interorganizational Projects
Research
March 19, 2024

Coping with Institutional Complexity and Voids: An Organization Design Perspective for Transnational Interorganizational Projects

Read Now
Empowering David: How Smaller Firms Reconfigure National Dependency on Foreign Multinationals in the Era of Disruptive Technological Change

Empowering David: How Smaller Firms Reconfigure National Dependency on Foreign Multinationals in the Era of Disruptive Technological Change

In this article, Sonja Avlijaš, Pavle Medić, and Kori Udovički reflect on foreign direct investment (FDI) and the way it impacts the development of political economies.

Read Now
The Complexities of Making Key Career Decisions

The Complexities of Making Key Career Decisions

practice. Career decision-making is a process that is difficult to analyze because it is much more complex than selecting the best option in a one-off choice.

Read Now
Revolutionizing Management Research with Immersive Research Methods

Revolutionizing Management Research with Immersive Research Methods

In this article, Anand van Zelderen, Nicky Dries, and Elise Marescaux reflect on their decision to explore nontraditional research.

Read Now
0 0 votes
Article Rating
Subscribe
Notify of
guest

This site uses Akismet to reduce spam. Learn how your comment data is processed.

0 Comments
Inline Feedbacks
View all comments