Report highlights strengths and weaknesses in Utah’s green economy

Posted by Josh Ewing in CT Insight, Featured Articles, Utah's green economy on Oct 15th, 2009 | 59 responses

Advanced Materials Strong. VC investment needs work.

The National Governor’s Association recently released a profile on each state’s green economy. While these profiles were by no means exhaustive (each profile really only has two meaningful pages of data), the Utah profile does provide some insights into where Utah enjoys competitive advantages and where it needs to get to work.

The first analysis in the profile consists of a breakdown of Utah’s green workforce by segment. The report shows the rough number of jobs in each segment, as well as the per-capita concentration of jobs compared to national averages.

Workforce analysis from the National Governor's Association profile of Utah's Green Economy

The most obvious take away from this analysis is that Utah’s greatest strength is in the concentration of people and companies working on green projects in the Advance Materials arena. This may come as a surprise to some; however, Utah’s overall advance materials/composites industry is quite strong. Although much advance materials work isn’t directly intended to be “green,” many environmental applications of the technology are offshoots. For example, strong, lightweight materials for wind turbine blades are very much in demand with the current boom in wind farm development.

The segments with the largest number of jobs are the “water and wastewater” segments and the “recycling and waste” segments. However, one might note that the concentrations in these industries are not significantly greater than the national average.

Perhaps the most glaring weakness is the low concentration of “energy generation” jobs. With Utah’s alternative energy resources (geothermal, wind, solar, etc), Utah should be well above the national average in concentration of these jobs. With focus and investment, Utah’s existing 450 jobs in this area should grow exponentially.

Further evidence Utah should focus on improving its weakness in energy generation comes from another component of the report profiling venture capital investment in clean tech business. The report highlights that 59% of all VC investment in green technology came in the energy generation sector. In 2008, the report shows $20 million in VC investment in green business in Utah. This is a significant improvement over previous years, almost three times the 2007 number. However, this $20 million represents only three tenths of one percent of the total US VC investment. Utah can and should attract much larger amounts of VC investment in its clean tech industry. For example, Colorado received $458 million in VC investment in green companies and California received a whopping $3.5 billion in 2008.

Another area of concern gleaned from the report comes from a moderate decline in the number of environmentally related patents filed by Utah inventors. The report shows a downward trend in patent filings from 1994-2008. Between 1994 and 1996, 18 patents were filed. Between 2006 and 2008, only 12 patent were recorded for green technologies.

These top line “take aways” from the report should be just a start for analyzing Utah’s green economy opportunities and challenges. In the next few months, we’ll explore more clean tech segments and data from this report. And, we encourage Utah economic leaders to invest in further study of Utah’s green economy.