The emergence of cleantech

Abstract

Cleantech has emerged in the part decade as an important new investment category. It has come to symbolize a new wave of entrepreneurial activity that could enable a more environmentally sustainable industrial system. Cleantech, however, is still in flux and boundaries still being defined. This dissertation empirically assesses the emergence of cleantech within the U.S. venture capital community in order improve understanding of its scope and implications.

The first essay is an empirical study of the social and institutional processes behind the emergence of cleantech. Cleantech is found to be the result of institutional entrepreneurs' intentional strategy, which skillfully connected cleantech with macro-events and shirting cultural priorities. Interviews, observations and content analysis of archival data revealed five main institutional logics underpinning cleantech, including the successful re-framing of environmental issues as a problem for business to an opportunity for investment, growth and job creation.

The second essay is an assessment of how much VC has been invested into U.S. cleantech companies between 1995 and 2006. Finding existing definitions and categories lacking coherence, I create a new definition and multi-dimensional classification system.

The research reveals that cleantech investments, despite pre-dating the term cleantech, grew in scale and scope beyond the rest of VC. VC backed cleantech companies are more geographically dispersed across the U.S. than is typical for VC. Investments are being concentrated in clean energy, business to business, and later stage companies.

The third essay examines the investors in cleantech and their investment strategies. I gather data on who is investing in cleantech, how much capital has been raised in specialist funds and their strategies. The growing appetite for institutional investors to place capital into cleantech is witnessed by the total increase in specialist cleantech funds. However, these funds are far from dominating the investment activity in the category—the largest proportion of investors in cleantech are non-specialists. Analysis of investment data reveals a changing investment landscape and increased competition for cleantech investors as it legitimacy.

Together, the three essays add up to a comprehensive, empirically driven assessment of the emergence of a nascent industry and dynamic new investment category.