The International Institute for Sustainable Development reports on a new World Bank publication that quantifies the opportunities for SMEs in green industries. In most countries, SMEs are the backbone of the economy and this is a welcome report that needs to be given considerable attention.
World Bank Identifies Clean-Tech Market Opportunities for SMEs
The World Bank Group has released a report, titled ‘Building Competitive Green Industries: The Climate and Clean Technology Opportunity for Developing Countries,’ which quantifies opportunities for small and medium-sized enterprises (SMEs) in developing countries to generate profits and create jobs, while providing solutions to climate challenges.
The report cites climate change as an economic opportunity, particularly in developing countries, and recommends public and private sector actions to encourage the growing SME market in clean technology.
Anabel Gonzalez, World Bank’s Global Practice on Trade and Competitiveness, stated that fostering “home-grown clean-tech industries” can create a sustainable and “wealth-producing sector of the economy,” while addressing access to clean and affordable energy, clean water and climate-resilient agriculture.
According to the report, of the total clean technology market in developing countries, approximately US$1.6 trillion will be accessible to SMEs over the next ten years. China, Latin America and Sub-Saharan Africa are the top three SME markets, with US$415 billion, US$349 billion and US$235 billion expected, respectively, for, inter alia, wastewater treatment, onshore wind, solar panels, electric vehicles, bioenergy and small hydro.
However, the report explains that “green entrepreneurship” requires more support, clean technology SMEs face challenges in accessing early and growth stage financing, and countries should create policy incentives to encourage their own clean technology sectors. The report provides policymakers with a range of instruments to support SMEs, such as innovative finance, entrepreneurship and business acceleration, market and technology development, and legal and regulatory frameworks.
The report also highlights clean technology market opportunities that can have a signifigant social impact. For example, in Kenya, innovative solutions in solar and biogas technologies not only create jobs and improve the environment, but also provide sustainable, off-grid electricity to the poor. Clean technology jobs also compare favorably to jobs in other sectors, requiring more skills and resulting in better pay and on-the-job safety.
The report was published by infoDev (a global innovation and entrepreneurship programme in the World Bank Group’s Trade and Competitiveness Global Practice), which supports local climate and clean technology SMEs and startups.
The report is available on the World Bank website.