Posted By HR Partnership on July 9, 2009

by Clynton Caines, originally published in Inside Business, June 29, 2009

If it wasn’t apparent before, it should be absolutely clear now. I mean the next high growth industry, where early investors can make huge profits. Over the years, investors have followed trends that started in one part of the country and spread globally – with those who recognized it early making high returns. In the 80s it was corporations – with manufacturers, financial firms and even restaurant chains spreading across the planet. In the 90s, it was the internet which arguably grew from Silicon Valley, advancing eastward and westward. In the last decade, cell phones and personal digital assistants grew smaller, but more powerful as they encircled the world. Visionaries who invested in emerging companies were handsomely rewarded, but it was often difficult to predict the next big thing. Thus conservative investors received – well, conservative returns. In the following discussion, I outline signs that point to an industry that will out-perform in the coming years, and I suggest that anyone wondering where to invest should be able to see it. Of course nanotechnology and biotechnology will always be “just around the corner” (until they finally get here presumably), so I will leave them out for now.

The last really big tech era was accompanied by one word that came to define it. That word is “Information” – as in information economy, information management and network-centric information technology. High school and college graduates were versed in website development and information sharing. Many artists were learning to bring their works directly to computer screens – or to otherwise display and sell them online. Our federal, state and local governments made a sustained effort to digitize records for the benefit of constituents and contractors. Businesses heightened there use of electronic data interchange – sharing information with partners and customers to improve operations. Even the military started using secure, real-time information sharing as a means of effectively and efficiently deploying resources to multiple battlefields. These days, what technology can we point to that everyone is talking about?

In my humble opinion, the word for this era will be “Energy” – as in alternative energy, energy independence and green technology-driven energy economy. College students and professors are becoming directly involved with alternative energy production, and some are even researching social interactions related to the field. Energy-based economic development is now a major focus of every level of government. In fact, the Stimulus Package[1], the first major bill signed by our new President, contains Energy more than 100 times! The entire country is talking about Energy (and more specifically, Alternative Energy) in one form or another.

Grass-roots organizations like the Pickens Plan are coming together to drive the political debate and to influence public policy. More importantly, their members represent a significant portion of electricity consumers who are demanding alternative energy production. The results can be seen in a recent report[2] from the American Wind Energy Association. It showed that in 2008, $17 billion was invested across the country on wind projects alone. The report also notes that despite a weak economy, billions more will be invested this year and next.

Recently, serious think tanks have begun to point out the national security risks of America’s continued reliance on fossil fuels. A report[3] from several retired generals, admirals and the Center for Naval Analyses articulated the consequences of our dependence on foreign oil. It recommends aggressive pursuit of energy efficiency in part through renewable energy, and it contends that making it a high priority for the Defense Department will benefit both the military’s mission and the American economy. At the same time, a study[4] from the Joint Forces Command indicates that there are influential military professionals that have the same view. The study concedes that renewable energy production might never surpass that from current sources, but it does anticipate a significant increase in spending through 2030 – and that spending is what we’re concerned about here.

Wherever the industry started, the signs are everywhere that Americans are willing to direct military, public and private spending into alternative energy. We all have different reasons, but we seem to agree on the solution. Whether to prevent global warming, end dependence on foreign oil, increase security, improve the electric grid, revitalize the economy, or address some other real or imagined concern, there can be no doubt that Energy (especially Alternative Energy) will be the next big industry. So, now that you know, which emerging alt-energy company will you invest in?

[1] “American Reinvestment and Recovery Act of 2009.” U.S. Congress. Mar 2009 (http://recovery.gov)
[2] “Wind Power Outlook 2009.” AWEA. Apr 2009 (http://www.awea.org)
[3] “Powering America’s Defense.” CNA. May 2009 (http://www.cna.org)
[4] “The Joint Operating Environment.” USJFCOM. Nov 2008 (http://us.jfcom.mil)

Clynton Caines is an electrical engineer and entrepreneur who is developing alternative energy products. He is president of VStarz Corp, and is a member of the Hampton Roads Technology Council and the Tidewater Government/Industry Council.

Categories: Research & Technology
Tags: Energy, Environment, Research