The next industrial revolution is underway, and California is at the epicenter of it. It’s called cleantech, and it’s all about replacing antiquated and unhealthy ways of producing energy, clean water and non-toxic materials with cheaper and better alternatives.
Every day at California’s leading venture capital firms, the world’s most talented entrepreneurs seek funding for transformative ideas to reduce our dependence on fossil fuels, clean up our environment and create economic opportunities for all our state’s citizens. Not all these entrepreneurs will succeed, but some will go on to change the world.
We need to encourage that type of innovation and entrepreneurial spirit; it’s what made California great. But the Proposition 23 initiative on November’s ballot, if passed, would stifle the growth of our cleantech industries and send exactly the wrong message to investors and businesses across the state, the country and the world. California has led the way in the information technology revolution, in biotechnology, and the explosive growth of the Internet — and can lead this next great wave of global economic growth. But only if given the chance.
Venture capitalists know well that the key to job growth and economic health in California is attracting private investment. Today, this money is funding the cleantech companies that will follow in the footsteps of Apple (AAPL), Cisco, Google, Facebook and the other great California innovators.
As an active investor in cleantech companies, I see firsthand the effect that California’s advanced clean energy policies have on creating jobs and innovation here. Many of the companies we and other investors support are located in California precisely because of the state’s forward-looking laws.
California Assembly Bill 32, known as AB32 and passed in 2006, laid the groundwork for this private investment by providing a clear and predictable roadmap toward a clean-energy future. This kind of policy certainty is what investors seek — indeed demand –before they can deploy their capital to long-term commitments. As a result of laws like AB32, 60 percent of all cleantech investments in the U.S. have gone to California-based companies.
Proposition 23 would effectively overturn AB32 and its incentives for private investors to put their money to work here. We are at risk of having this private capital flow to other countries and states where clean technology is not just embraced, but encouraged by government support and forward-thinking policy.
We should be clear about the stakes: Thanks in part to California’s progressive clean-energy policies, over half a million new jobs have been created in the state, and in 2009 alone, over $2 billion was invested in California cleantech start-ups. Seven of the U.S.’s 10 largest clean technology companies are based here. The cleantech sector is one of the few bright spots — and job creators — in an otherwise severely challenged California economy.
Pioneering companies like BrightSource Energy, which is building the world’s largest and most advanced solar power plants in the Mojave Desert; Bridgelux, a global leader in LED lighting which has recently expanded its manufacturing facilities in California; Tesla Motors, which is scaling up to build the world’s most advanced electric vehicles in Fremont, Calif.; and Solazyme, which is leading the world in using algae to develop sustainable alternatives to petroleum, have all picked California as their home because it is a place where financing and innovation take center stage.
Take away policy certainty and you take away that center stage. The clean-energy revolution will happen whether California leads the way or not, but we are at risk of squandering our great innovation advantage and watching these companies locate elsewhere.
We frequently hear concerns that California is not “business friendly” enough, and that we are losing companies and jobs to other locations. By saying NO to Proposition 23, Californians will be sending a clear message that we want to continue to lead the world in innovation, that we want these highly desirable new companies to be based here and, perhaps most importantly right now, we want these clean technology jobs.
These jobs aren’t just for engineers and technology pros. The work crosses over many segments of the economy and employs a wide variety of workers. There are jobs at construction firms, at solar-panel installers and manufacturers, at high-tech LED lighting innovators, at bio-fuel research facilities, electric car manufacturers and many other new businesses. These are jobs for the industries of the 21st century and employ Californians of many different skill and educational levels.
California has the world’s eighth largest economy, and we’ve repeatedly led the world in social, environmental and legislative policies. We once again have the opportunity to demonstrate our leadership and forward thinking, this time with respect to the world’s next great global industry. And all the while we can improve our environment and the health of our citizens.
Investors and entrepreneurs know that innovation cannot be put on hold. We should embrace and celebrate the transition of our jobs from antiquated, fossil-fuel driven industries to modern, clean technology initiatives.
The way to do that is by keeping California’s current energy policies intact. That means voting NO on Proposition 23.
Alan Salzman is CEO and managing partner of California-based VantagePoint Venture Partners, a global investment firm with a portfolio of over 25 leading clean technology companies and $4.5 billion in committed capital.
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