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Robert Weissbourd

The Chicago Region’s “Green” Economic Opportunities. The Midwest Green Economy: Past, Present and Future. Delta Institute and the Graham School of Continuing Liberal and Professional Studies January 26, 2012. Robert Weissbourd. Part I: Defining the Green Economy.

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Robert Weissbourd

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  1. The Chicago Region’s “Green” Economic Opportunities The Midwest Green Economy: Past, Present and Future Delta Institute and the Graham School of Continuing Liberal and Professional Studies January 26, 2012 Robert Weissbourd

  2. Part I: Defining the Green Economy

  3. What Exactly IS the Green Economy? First, Drivers … Global Warming and Pollution High Fossil Fuel Prices Demand for Environmentally Friendly Products Demand for clean energy generation Demand for products that reduce energy consumption Demand for products that reduce pollution Demand for low carbon technologies is driving growth of Clean Tech.

  4. An Info-Tech Analogy Producers Users Like IT, Clean Tech will affect the way every company does business.

  5. Segments of the Green Economy

  6. New 42,000 sq foot facility Gearbox housings Broad Opportunities in the Green Supply Chain $$$ Auto-supplier created gearbox housings product line for wind developer.

  7. Regional Green Strategy Development Identify Growth Sectors sectors Analyze Regional Assets $ Determine Development Needs Develop Products and Services Apply established economic development strategies to green opportunities.

  8. The Next Economy = Green Expected Global Annual Clean Energy Investment 600 500 400 300 200 100 0 Geothermal, marine, low carbon tech Small hydro Biofuels Billions of U.S. Dollars Biomass + Waste-to-Energy Solar Wind Source: Bloomberg New Energy Finance 2005 2010 2015 2030 2020 2025 “The rebuilt American economy must be more export-oriented and less consumption-oriented, more environmentally-orientedand less fossil energy-oriented, more bio- and software engineering-oriented and less financial- engineering-oriented...”

  9. Part II: Overview of Chicago’s Green Opportunities

  10. Identify Growth Sectors and Analyze Regional Assets: Chicago

  11. Identify Growth Sectors and Analyze Regional Assets: Chicago 0 0

  12. Chicago’s Opportunities in Renewable Energy Chicago is home to over a dozen wind headquarters and over 100 component suppliers. Solar Thermal Wind Biofuels/Biomass

  13. Chicago’s Opportunities in Energy Efficiency Chicago has more LEED-certified buildings than any other city. Chicago’s highest specialization is in Energy Efficient Lighting and the region has over 30 firms working in the space. Vehicle Electrification Energy Efficient Lighting Green Buildings Over 100 firms are participating in the IIT-led Smart Grid Regional Innovation Cluster Building Energy Management Smart Grid

  14. Chicago’s Opportunities in Waste Remediation and Pollution Control Chicago’s Waste to Profit Network is a national model of “byproduct synergy,” in which one company’s trash becomes another’s treasure. Chicago ranks #1 in the country for employment in “Air and Water Purification Technologies.” Recycled Content Products Green Chemicals Organic Farming & Food Production Water Purification and Treatment

  15. Part III: Examining Business Opportunity – the Energy Efficient Lighting Sector Illustrating a Cluster Approach to Green Economic Development

  16. Market Analysis: Energy Efficient Lighting • Huge LED growth projected: from 7% market share in 2010  60% in 2020 • 30+ Chicago area companies, >1000 employees Source: McKinsey and Company

  17. Barriers to Market Growth • Cost to Performance Curve • Product Quality • Distribution barriers • Confidence in Commercial Viability

  18. Market Dynamics: Change is in the Air “I think you will see lots of new products for niche applications. To be profitable you will have to get into these markets. You will have to have something someone else doesn’t have.” • “The LED and energy efficiency markets are a big challenge for traditional lighting businesses. They are used to being “order takers” with repeat business every 6 months based on how many light bulbs they know are going to burn out. If they embrace LED, there will be no bulb turnover, no predictable repeat sales.” “LEDs will drive change in the distribution model. Traditional distributors are avoiding the LED market because it is too technical.” “A big challenge with this market is its archaic distribution system. You need to make same sale several times, to the architect, to the engineer, to the building owner. There needs to be a new model.” “I’ve never seen so many new companies pop up in so short a time. Our customer base has almost tripled in number.” “We think the most interesting investment opportunities in EE Lighting are on the integration side…” Firm interviews and industry research reveal a transforming industry.

  19. Understanding the Emerging Cluster • Opportunity in broader cluster made up of: • Energy efficient lighting • Architecture, design and engineering • Commercial building management • Energy efficient HVAC • Energy software and controls • Energy management integration • EE Lighting Sector  “Integrated Lighting and Building Energy Systems” Cluster

  20. Strategies for ILBES Cluster • Make Chicago the easiest place in the world to do real world applied R&D on building energy efficiency. • Consortium of architects, engineers, designers, developers, property owners, property managers, energy management companies, utilities and component suppliers • Proactive “IP mining” for leading edge technologies • Applied R&D networks for rapid prototyping • Technology demonstration sites – Merch. Mart? • Proactive relationships with venture and equity firms • Public sector as lead adopters

  21. Summary • Enormous market opportunity is rapidly emerging as demand for energy and resource efficient products and services affects how every company does business • Chicago has major competitive advantages: firms in currently “green” or related industries (particularly within strong manufacturing base); human capital; infrastructure; knowledge and technology specializations; demand conditions; etc. • In context of emerging markets and competition elsewhere, we need to compete deliberately –- build institutional capacity,business led opportunity identification and development, investment.

  22. The Chicago Region’s “Green” Economic Opportunities The Midwest Green Economy: Past, Present and Future Delta Institute and the Graham School of Continuing Liberal and Professional Studies January 26, 2012 Robert Weissbourd

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