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Will the cleantech industry pass by Silicon Valley?

Posting in Energy

Silicon Valley is known as America's cradle of technological innovation, but players based in the area are concerned that the cleantech revolution will happen elsewhere.

Silicon Valley is known as America's cradle of technological innovation, but players based in the area are concerned that the "cleantech" revolution will happen elsewhere.

Long-known as a hub for semiconductor development and Internet startups, Silicon Valley fears other areas of the world -- such as China -- will become dominating cleantech hubs, leaving the Valley in their wake.

Cleantech -- which is short for "clean technology" -- is the name for an industry that includes renewable energy (wind, solar, biomass, hydro and biofuel power), "green" transportation, energy-efficient appliances and information technology.

Executives and venture capitalists at the Reuters Global Climate and Alternative Energy Summit said other areas in the world have emerged as cleantech hubs in part due to strong local markets and financing sources, according to a Reuters report.

Reuters' Laura Isensee reports:

"We've now got four or five parts of the world that have seen the Silicon Valley movie and are basically saying cleantech is Silicon Valley redux and I'll be damned if I'm going to let those guys win in this battle," said Stephan Dolezalek, managing director at VantagePoint Venture Partners in San Bruno, California.

India, China and the Middle East are the United States' biggest competitors.

Though Silicon Valley has heavy investment, players are concerned that it won't get a big enough piece of the cleantech pie. In the U.S., the credit crisis has restricted financial backing for the burgeoning industry.

Meanwhile, federal policies on renewable energy are still up for debate in the nation's capital.

(At the energy summit, Google's Weihl reportedly said $10 billion to $30 billion per year would be a sustainable budget for cleantech.)

While American players are caught in political and financial red tape, countries such as China are investing heavily along the entire pipeline, with the aim of scaling the new technology to commercial scale, according to the Reuters report.

But cleantech may end up spawning multiple global hubs, differentiated by sector. In that case, Silicon Valley may consider relying on its knowledge economy and tradition of entrepreneurship and and leaving the nuts and bolts to others.

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Andrew Nusca

Editor Emeritus

Andrew Nusca is editor of SmartPlanet and an associate editor for ZDNet. Previously, he worked at Money, Men's Vogue and Popular Mechanics magazines. He holds degrees from the Columbia University Graduate School of Journalism and New York University. He is based in New York but resides in Philadelphia. Follow him on Twitter. Disclosure