Regarding the Cleantech vs. Greentech debate . . . I chaired the recent Greenvest 2007 conference in San Francisco a couple of weeks ago on investing in green technology. Nick Parker, Chairman of the Cleantech Group, did an opening address on the state of the industry - which brought to mind the question of what exactly one should call the industry.
Is it “Green” or is it “Clean” Technology? So I thought that perhaps a brief discussion of the differences and the history is warranted.
Cleantech – Google search produced 1.24 million results (1.78 million for “clean tech”).
“Cleantech” is a term popularized (and I believe coined) by friends of mine who founded the Cleantech Venture Network (now Cleantech Group) in about 2002 as an umbrella term to describe the “green and clean” technologies that venture capital investors were turning to in increasing numbers as the next big thing in technology investing after the collapse of the tech boom. Before that, my colleagues and I referred to ourselves at Jane Capital as working on energy and environmental technology (a bit cumbersome). And energy tech is still a term used in many investing circles, though it has been quite heavily consumed inside the Cleantech umbrella. As a side note - before it’s coining as an asset class and technology category, “cleantech” as a word was most likely to refer to dry cleaning equipment.
Here’s straight from the horse’s mouth:
The concept of "clean" technologies embraces a diverse range of products, services, and processes that are inherently designed to provide superior performance at lower costs, greatly reduce or eliminate environmental impacts and, in doing so, improve the quality of life. Clean technologies span many industries, from alternative forms of energy generation to water purification to materials-efficient production techniques. – Cleantech Venture Network
Cleantech or clean tech is generally defined as knowledge-based products or services that improve operational performance, productivity or efficiency while reducing costs, inputs, energy consumption, waste or pollution.
Cleantech is differentiated from green technology since it generally refers to the emerging financial industry (as opposed to the actual technology in which the industry invests). Specifically, the investment focus includes water purification, eco- Efficient production techniques, renewable energy, green technology, sustainable business. Since the 1990s the financial community began more active interest and investing into the Cleantech space.
Greentech – Google search produced 526,000 results (741,000 for “green tech”).
The term “Greentech” on the other hand, popularized by venture capitalists John Denniston and John Doerr of Kleiner Perkins, has become almost a synonym for cleantech since about 2005 as more mainstream venture capital and Wall Street investors began entering the sector increasing numbers – and has been heavily picked up in the mainstream media – as well as new media startups like Inside Greentech and recently launched Greentech Media. Riding on the coattails established by “cleantech” – some have tried to characterize greentech as “different” to cleantech, and as more than just a subset of the cleantech umbrella. It has also been suggested that greentech is the re-emergence of an older term that never quite found broad appeal from its use in the early 1990s or prior – but is now. As a side note: I could find no greentech entry in Wikipedia yet.
“'Clean tech,' as many past efforts at environmentally friendly industry have been called, hasn’t panned out from an investment standpoint," said Mr. Doerr, but 'greentech' will.
The difference? The word “green” means money is to be made, he said. "It’s about advances in areas such as nanotechnology and alternative fuels that mean that companies will succeed in the future where past efforts have failed.” - Red Herring
When I asked my friends Keith Raab and Nick Parker, who cofounded the Cleantech Group, to comment on why they coined the term "cleantech" - Keith Raab said:
"Who wants green air or green water?" The greentech term (and we use small caps unless referring to an organization) is very retro and smacks of EPA type regulation. The whole reason we brought the cleantech term to market five years ago was to advance a new concept that reflected technological improvement and new concept. As you know, often cleantech is purchased primarily for non-environmental reasons even though it may offer significant environmental benefits. While some media outlets may be using the greentech term, just about all corps, Wall Street players and VCs who are active in the area use the term cleantech. We think there is room for various terms, e.g. "resource efficient" but from a capital markets perspective, it's important there is one term so that a defined asset (allocation) category emerges.
But whichever term you prefer (at Jane Capital the team has been working in energy and environmental technology for over 30 years), it means building and investing in emerging technologies that are better for energy and the environment. And that means better for all of us.
As a personal note on which term I use - at Jane Capital we have founded and I write and edit the Cleantech Blog, one of the leading sites for news and analysis in energy and environmental technologies (available as well on GreentechBlog.com, of course). We are founding a venture on the portal Cleantech.org (soon to be launched) and I’ve recently joined CNET’s Green tech blog and write columns for Inside Greentech and AltEnergyStocks.com, but when people ask me what I do - I say “energy tech” or “cleantech.”