It seems that these days, everyone from Capitol Hill to the media is an expert on the job creating power of clean energy firms. Two high profile bankruptcies – Solyndra and Evergreen Solar – have cast a pall over the industry and have led many to ring the death knell of the clean energy economy. As an independent researcher who has conducted numerous clean energy studies over the course of the past several years, I am alarmed by these assertions, because they lack evidence and fact to support them.
Suggesting that the failure of Solyndra represents the end of the U.S. solar industry is as preposterous as suggesting that the fall of Friendster means the end of social media, or that the Bear Stearns bankruptcy means that the finance industry in America is finished.
Innovative clusters like clean energy, biotechnology, and information technology are extremely volatile as markets and technology shift regularly. Rapid growth, acquisition, and failure are all hallmarks of innovation. In fact, successful venture capital firms see about 30 percent of their start ups fold before turning a profit. In other words, in these clusters, a few eggs are going to break to make the omelet.
Given this volatility, are innovative industries good for a region? Recent evidence suggests that innovation hubs, such as Silicon Valley and the Boston area weathered the recession better than other regions – and currently boast employment rates much lower than the nation as a whole.
This finding makes sense given two recent employment studies – The Solar Foundation’s 2011 Solar Jobs Census and the Massachusetts Clean Energy Center’s 2011 Industry Report – that show that clean energy firms are adding workers much faster than the economy as a whole – up to seven times faster, in fact!
Where the green jobs are
Despite these impressive statistics, every time I speak about green jobs, I am confronted with increasingly frustrated audiences who simply want to know “where are the jobs?” In my opinion, the challenges can be boiled down to three issues: expectations, context, and time.
I’ll start with expectations, and a technology-related phenomenon that Gartner described as the “Peak of Inflated Expectations.” In 2009, many saw green jobs as the salvation of the U.S. economy, predicting that millions of jobs would be created in energy efficiency, renewable energy, alternative transportation, and other environmentally friendly fields. Though the clean energy cluster certainly presents long-term prospects for this type of growth, many of the industries within it are still small and emerging, lacking the size necessary for the impressive growth rates to produce jobs in such quantities.
For example, even in Massachusetts, with its healthy and vibrant clean energy pipeline from R&D to installation, clean energy jobs represent about 1.5 percent of total state employment – a large percentage, but not large enough to tackle the unemployment rate on its own. Expectations were set so unreasonably high by a desperate public that even the strong growth of the cluster seems disappointing to many (this has led us to Gartner’s “Trough of Disillusionment”).
Second, context is critical. In 2008 and 2009, very few economists predicted such a long, protracted, and jobless recovery. Over the past year, U.S. employment grew by only 0.7 percent, and just this week, the Federal Reserve Bank cut its economic growth prediction for the year. Despite these terrible economic conditions, clean energy firms have continued to grow and prosper. Solyndra’s bankruptcy looks a bit less onerous when considering that over 1.5 million firms declared bankruptcy between March 2010 and March 2011 in the United States.
Perhaps most importantly, recent evidence shows that clean energy workers require more education and training, skills, and experience than the average worker. These jobs pay well and often deal with complex technologies. Developing the highly talented pipeline needed for clean energy firms takes time, which explains why so many employers report difficulty in finding the right candidates for their open positions despite high unemployment rates.
Though the debate over green jobs will certainly continue, it is imperative to base our opinions in facts over conjecture. By relying on real-time information, often collected directly from employers, we can discuss the future of the clean energy economy with facts rather than emotion.
Philip Jordan is the Chief Business Officer of BW Research Partnership and lead’s the firm’s Green LMI Division.