Walter Yu, P.E., LEED AP

Could this be the next boom?

As a resident of California for over 20 years now, I’ve come to appreciate and be in awe of the continuous innovation led by entrepreneurs here in Silicon Valley.

Growing up, I remember watching the personal computer turn from much-hyped, almost-here technology into something truly ubiquitous and accessible to almost everyone in the developed world. Accessibility to those in developing countries may also become a reality thanks to Nicholas Negroponte’s One Laptop per Child (OLPC) non-profit organization.

Even before the PC, startup firms played pivotal roles in the development of technologies such as integrated circuits, microprocessors, and lasers.

Naturally, many entrepreneurs and their financial backers, venture capitalists, are looking for the next big thing now that the IT industry is rapidly maturing – once a fast-growing start-up, Google now finds itself a target of antitrust lawsuits.

So where might the next boom lie? Many in silicon valley think it lies in green energy, more specifically cleantech.

This is the case made by an Associated Press article on the boom in cleantech. For starters, it cites the following:

1. The Obama Administration has ledge $150 billion in funding for energy technology that could create 5 million new jobs – the current recession has wiped out 7.2 million nationwide.
2. Venture capitalists have invested $8.7 billion in energy-related startups in the U.S. since 2006.
3. Large multi-nationals such as AES Corp., Dupont Chemical Company, Suncor Energy and  Peabody Energy are all making investments in green energy start-ups and/or technologies of their own.

Although the dot-com boom dwarfs the current one in cleantech (venture capital was $10 billion per quarter at peak vs. the $8.7 billion invested since 2006 in cleantech), many start-ups are getting a jump start on a wide variety of technologies:

Greatpoint Energy: Processes coal, petroleum coke and biomass into pipeline quality natural gas using a process known as hydromethanation while capturing an sequestering carbon dioxide generated in the process.

A123 Systems: Develops high-power lithium ion batteries for use in transportation, electrical grid services and portable power manufacturing using its proprietary nanophosphat technology built on nanoscale materials developed at MIT.

Tendril Networks: Develops meters and devices for creation of “smart grids” where household appliances such as dishwashers, refrigerators and washer/dryers communicate with utility providers to help reduce energy usage and possibly reducing the number of power plants needed.

Both the Obama Administration and California’s Renewable Energy Initiatives are promising for entrepreneurs looking to develop new technologies into industries.

However, such a reality boils down to economics – can these technologies create products that consumers will want to buy? Even the dot-com ultimately burst when massive investment in IT firms created over-capacity on area networks.