At the turn of the last century, did GM build our roads?
No. They didn’t have enough money and there wasn’t an ROI for roads. The government – at all levels—stepped in and built this country’s highway infrastructure over the last century, thus spawning the modern age of individual travel, the middle class, suburbs, chain stores, and drive-thrus. We became a car culture because our leaders decided that it was strategically important to build a highway infrastructure. We all paid for it in taxes.
We face the same kind of strategic imperative today.
We believe that moving the country off of its dependence on foreign fossil fuels is today’s strategic imperative if we’re to control our destiny. This won’t happen tomorrow or even perhaps in the next few decades – it’s a huge job — but it’s going to happen sooner or later. California has already put its stake in the ground with AB 32, requiring all utilities to get 33% of their energy from renewable sources by 2020. And Los Angeles is ahead of every major city by achieving almost 20% of its energy from renewable resources by 2010.
The new strategic imperative is to focus the private and public sectors on the processes and technologies regarding the sustainable consumption of our natural resources.
Shifting from fossil fuels to sustainable energy consumption will require rebuilding this country’s energy and transportation infrastructures –spending trillions of dollars in basic research, infrastructure build-out, and reconfiguring the way we live. For example, the federal government alone plans to invest over $100B in clean technology development over the next few years. For those people, companies, cities, states and countries that grasp this challenge, they will be positioned to reap the rewards of this new economic rebuilding for years and decades to come.
Building a green economy is
Los Angeles’ economic growth strategy
In May 2007, Mayor Villaraigosa released the Green LA Plan as the core of his economic development strategy. Four years later, it still sounds right:
“…Focusing on the green sector can result in new jobs, improved human health, and both a more sustainable environment and economy. Catalyzing the growth of green economic activity could serve as a foundation for fundamental change. Los Angles has significant market influence through its proprietary agencies; its purchasing, procurement, and contracting processes; as well as its regulatory, planning, and land use powers that can be coordinated to “grow green” and promote a robust green economy. The city has the power to provide leadership, stimulate market demand, model innovative and profitable green businesses, promote private investment, create a business-friendly regulatory environment for green companies, and invest in workforce development programs that facilitate growth of the green economy while improving the income of residents in disadvantaged communities…”
LA is uniquely positioned to help entrepreneurs build clean tech businesses
Entrepreneurs need access to two things: capital and markets. Los Angeles’ efforts to build a green economy have already started to pay off as we’ve become the largest cleantech market in the country.
- Los Angeles has more green jobs than any other region in the nation (178,500)
- The green job sector has grown at triple the rate of the rest of LA’s economy over the last 15 years.
- Los Angeles is the largest market for solar and EV’s in the country
- Los Angeles was the first major city to take more than 20% of its energy from renewable sources
- Los Angeles has the highest rate of recycling of any major city in the country
- Three world-class research universities – UCLA, USC, Caltech – graduate more engineers than anywhere else in the world
Source: “Green Jobs and the Los Angeles Region” July 2011
Despite the economic downturn of the last several years, Los Angeles is attracting cleantech investment at an ever increasing pace. In Q1 2011 alone, cleantech investment capital in Los Angeles increased 58% from Q4 2010 (Source: Shaking the Money Tree, Q1 2o11 Update). Every day planes from China, Taiwan, India, Japan and Korea land at LAX, disembarking delegations looking for ways to access Los Angeles’ green economy and research capabilities. Along with these delegations comes investment capital and the desire to forge strong relations with Los Angeles’ business community.
Invention in its purest form is what’s needed to drive down costs and drive up ROIs. LACI has unique relationships with the city’s research universities – UCLA, USC, and Caltech – whom together graduate more engineers than any other region in the country. Moreover, one of our founding partners – LADWP – is the largest municipal utility in the country and will spend hundreds of millions of dollars in cleantech research in the next year.
Invention in its purest form is what’s needed to drive down costs and drive up ROIs. LACI has unique relationships with the city’s research universities – UCLA, USC, and Caltech. Moreover, one of our founding partners – LADWP – is the largest municipal utility in the country and will spend hundreds of millions of dollars in cleantech research in the next year.
Yet, innovation alone isn’t enough
We must translate laboratory breakthroughs to marketplace disruptions. And this is where LACI plays an important role as our mission is to accelerate the commercialization of clean technologies from the area’s universities as well as from independent inventors and entrepreneurs.
We do this through three important programs:
- Plug and play office and lab space at insanely low rates
- CEO coaching and mentoring by people who’ve “been there, done that.”
- Access to Los Angeles’ official cleantech network for expertise, customers and financing
Business incubators are a proven method for commercializing technology. Cities from New York to San Jose are launching business incubators because they work: incubated companies are much more likely to succeed, they are very likely to locate their mature businesses where they started, and they are a very efficient use of economic development capital spawning $30 in tax revenue for every $1 in incubation operating investment made. Last year the city of San Jose generated 39% of its job growth from new business formations alone.
How an old bus repair terminal is the start of something big
LACI’s temporary home is an old bus repair terminal that’s been converted to a clean, modern, open facility that will hold LACI’s first eight portfolio companies. We intend to help build great companies here while we await the construction of our permanent home, the 60,000 square foot La Kretz Innovation Campus scheduled for completion in the summer of 2013. When completed, the La Kretz Innovation campus will house a 30,000 square foot incubator with office and lab spaces, several DWP smart-grid, EV and kitchen demonstration centers, a cleantech conference center, a cleantech workforce training center and a university-led smart grid research lab.