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Cleantech and the UK growth opportunity
The UK has a once in a generation opportunity to establish a new platform for economic growth through supporting and investing in the clean technology (cleantech) sector.
To find out if UK industry believes it can really capitalise on this opportunity, Ernst & Young has carried out research among 323 industry professionals to establish how ready the UK is to achieve its potential in this emerging sector.
Assuming it is incentivised appropriately and capitalised at the right level, the industry could become a key contributor to long-term economic growth, sustainable job creation, and the emergence of a raft of new world-class British companies over the next decade and beyond. In addition, the cleantech sector can bring about increased energy and resource security and efficiency, a conclusion supported by an overwhelming 97pc of our survey respondents.
The UK has begun to demonstrate its potential to be a global leader in cleantech. The UK has emerging leadership in areas such as offshore wind, illustrated by the official opening in September of the Thanet wind farm, the world's largest offshore wind project.
As the economy emerges from the depths of the financial crisis, with the Coalition Government committed to be the 'greenest government ever', and in light of the recent Comprehensive Spending Review which left cleantech comparatively unscathed, the UK ought to be well poised to seize this opportunity.
Yet only 3pc of our survey participants believe we have established the conditions for success and 76pc feel that urgent or decisive action needs to be taken to establish a clear policy direction and stable long-term policy framework to create the conditions for the cleantech sector to be truly successful.
Clearly, there is much work to do, and the barriers to be overcome are substantial. Our study identifies three critical inter-related barriers - policy, capital and infrastructure, which together threaten to prevent the UK from fully exploiting the cleantech growth opportunity. This raises the prospect of the UK standing by as China, the US, South Korea and others power ahead as they focus on cleantech as a national strategic growth priority.
There is time to ensure this doesn't happen, but not much. We believe the Coalition Government will need to set out a transformational policy agenda by the summer of 2011 to accelerate the shift to a low carbon, more resource efficient economy to take full advantage of the potential for economic growth. The announcement of the 'Green Deal' is a welcome and encouraging step in driving this agenda forward.
Ernst & Young has been a leader in the cleantech and renewable energy sector for many years, providing support to industry stakeholders including government officials, utilities, regulators, cleantech growth businesses, independent renewable energy developers and finance providers. Through this independent study we seek to provide recommendations on how the UK can realise this unique growth opportunity.