Monday, 4 August 2014

Support your local grant farmer!


Apparently there is a crisis of support for something called 'green industry'. This thing is our salvation and, of course, the planet's salvation too:

Green businesses and clean tech entrepreneurs are not receiving enough support from government, MPs will warn today, arguing the UK is at risk of missing out on a £3.4 trillion global market opportunity.

The report that has led MPs to "warn" us of dire things talks about the problems that 'green entrepreneurs' face transforming their planet-saving technological wizardry into part of that "£3.4 trillion global market". There is, we're told something called the 'valley of death' that prevents these whizz-kid entrepreneurs from bringing their product to market. Now Psalm 23 aside, this 'valley of death' through which the green innovator must walk seems to me a simple thing really - and indeed the 'entrepreneurs' concerned aren't real entrepreneurs either.

The first clue is from Tim Yeo MP, who (despite his substantial financial interest in so-called 'green industry') chairs the Energy and Climate Change Select Committee:

 "The government should be doing all it can to support innovative UK businesses in their efforts to access the growing global market for low-carbon goods and services."

And, of course, by support what Tim means isn't gentle encouragement but hard cash - the distribution of grants and soft loans. Indeed, the complaint isn't about the non-existence of these grants but that it's hard for budding 'green' business folk to get their mitts on the moolah.  So what MPs want is a simpler and easier way for people to access the cash - the very antithesis of entrepreneurship. It could even be said that any entrepreneur - regardless of hue - that requires government support to make the business work isn't displaying much enterprise or initiative.

The Department for Environment & Climate Change responds to the complaint, not by saying that 'green entrepreneurs' should do what regular entrepreneurs do and sink of swim in the real world of real markets, but by bragging about how much cash is lavished in grants on emerging 'green' technologies:

"...a DECC spokeswoman insisted the Department has beefed up its delivery of innovation programmes since 2010, with initiatives such as the Offshore Wind Accelerator highlighting how industry can pool resources with government support to address common challenges.

She also pointed to a £25m Energy Catalyst fund, which opened in May, to support technology development across the "valley of death" to commercialisation, as well as a Technology Innovation Needs Assessment process that allows LCICG to focus spending on those clean technologies critical to meeting the UK's decarbonisation and energy security objectives at the lowest cost."

We're not talking about real business here but what the Yanks call 'corporate welfare' - the business equivalent of the benefits scrounger. I prefer to use a different term for this activity - it's more evident in the voluntary sector (and what might be called the 'social economy') but what we see here is the extent to which millions of other folks' money is lavished on 'technology' start-ups. There is no 'valley of death' to cross - if the business plan is viable then there are plenty of ways to secure capital without holding out the bowler hat for a government department to fill it with gold.

I call this 'grant farming' - the process whereby ill-formed and barely viable technology projects can be turned into vehicles for attracting grant funding from government (local, regional, national and EU). There is an entire industry dedicated to processing and securing these grants and very little, if any, evidence that they result in new technologies reaching the market more quickly. Or in those technologies proving to be sustainable (in the true financial sense rather than the 'living-in-a-yurt' sense).

The 'green' economy has become the great cash cow for these grant farmers as millions is hosed at a thing called 'decarbonisation' (I'm sure my Dad used to do this to his motorbike once a year). And, since economic success isn't the aim, the resulting grants do not work to create a new 'green economy' but establish and exploit a sector wholly dependent on those grants or subsidies.

In essence Tim Yeo MP isn't urging backing for real business but instead crying out that we should support our local grant farmers. Not surprisingly Mr Yeo is one of those grant farmers himself!


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