A survey, published by Environmental Entrepreneurs and CleanTech Ventures, shows that $2.9bn was invested in clean technology firms in 2006, up almost 80 per cent on the year before.
I predict Green is the new "bubble", with the growth set to continue, by 2010 investment in the sector could climb as high as $19bn. Here is a stimulus package!
There are already the market behemoths - like Google - just five firms attracted $600m of the total investment.
The reports says shifting public opinion and growing policy support for green technologies were two of the main raising agents that helped the sector attract more cash than even medical devices, telecoms, and semiconductor sectors. Biotech and software are still more attractive overall ($4.92bn and $5.25bn receptively), but have seen nothing like the same growth.
Green Technology is a Money Magnet and if you want to read more, check out the book.
March 27, 2009
March 26, 2009
Will this crisis end all future crisis?
There is one thing, however, that is clear to me.
The banking business has been around for a thousand years, it’s the life blood of any economy and it’s not going to go away. This crisis, when it’s all over, will have taken huge capacity out of the international banking and financial business. Those banks that survive this turmoil will be extraordinarily well positioned to do outstandingly well and I think that includes the Canadian banks.
In 1873, there was a financial panic and banking crisis in Paris and Baron Rothschild said the time to buy is “when there is blood in the streets”. Well, we must be getting close.
Booms, busts, bubbles, panics, crashes and bankruptcies – to some extent we’ve seen it all before, but somehow the system always survives, adapts and moves on to bigger and better things and, in time, I am sure it will again.
Also, we should remember that the U.S. economy is;
- the most entrepreneurial
- the most innovative
- the most competitive
- the most flexible and
- by far the most resilient in the world
For two centuries, it has demonstrated time and again an enormous ability to bounce back.
This time it may just take longer.
Will this be the financial crisis to end all crises – not a chance.
Twenty years from now, this crisis will be ancient history and long forgotten, and the young people running the businesses at that time will set out to do the same thing all over again.
Nevertheless, hope springs eternal and I hope the lessons of the past year and a half are indelibly ingrained;
- on central banks
- on regulators
- on Boards of Directors and most especially
- on top corporate management
so that the financial business may once again become an industry of choice for investors.
The banking business has been around for a thousand years, it’s the life blood of any economy and it’s not going to go away. This crisis, when it’s all over, will have taken huge capacity out of the international banking and financial business. Those banks that survive this turmoil will be extraordinarily well positioned to do outstandingly well and I think that includes the Canadian banks.
In 1873, there was a financial panic and banking crisis in Paris and Baron Rothschild said the time to buy is “when there is blood in the streets”. Well, we must be getting close.
Booms, busts, bubbles, panics, crashes and bankruptcies – to some extent we’ve seen it all before, but somehow the system always survives, adapts and moves on to bigger and better things and, in time, I am sure it will again.
Also, we should remember that the U.S. economy is;
- the most entrepreneurial
- the most innovative
- the most competitive
- the most flexible and
- by far the most resilient in the world
For two centuries, it has demonstrated time and again an enormous ability to bounce back.
This time it may just take longer.
Will this be the financial crisis to end all crises – not a chance.
Twenty years from now, this crisis will be ancient history and long forgotten, and the young people running the businesses at that time will set out to do the same thing all over again.
Nevertheless, hope springs eternal and I hope the lessons of the past year and a half are indelibly ingrained;
- on central banks
- on regulators
- on Boards of Directors and most especially
- on top corporate management
so that the financial business may once again become an industry of choice for investors.
March 25, 2009
Step to recovery
The second key to economic recovery in the U.S. is the consumer and the key to the consumer is housing.
The consumer accounts for about 70% of GDP in the United States. Most recessions over the past fifty years have been caused by excessive inventories or over capacity.
This is different. This is a consumer led recession.
There is too much consumer debt and it won’t turn around until consumers have restored their family balance sheets and are confident once again to start spending. The American consumer has over-borrowed and overspent for a decade and is now tapped out. Irrespective of much lower interest rates and the prospect of lower income taxes, I believe we have moved into a multi-year period of consumer retrenchment and thrift.
The consumer in the U.S. is shell shocked.
Their equity and retirement portfolios are down but, far more importantly, 68% of American families own their own homes and home prices are down by more than 20% and likely to fall further.
If the value of your home drops by 25%, it shakes your confidence.
As a matter of interest the average Canadian carries 2 credit cards whereas the average American carries more than 6.
The average credit card balance per family is $2,000 in Canada and over $8,000 in the U.S. On top of all this, the job market is uncertain. In this environment I expect consumers to pull back and the U.S. personal savings rate, having fallen for more than twenty years, will now start a gradual rise back to the traditional range of 6% to 8% or higher.
The only way consumers can restore their balance sheets is by saving more and spending less – and spending less will delay recovery.
The consumer accounts for about 70% of GDP in the United States. Most recessions over the past fifty years have been caused by excessive inventories or over capacity.
This is different. This is a consumer led recession.
There is too much consumer debt and it won’t turn around until consumers have restored their family balance sheets and are confident once again to start spending. The American consumer has over-borrowed and overspent for a decade and is now tapped out. Irrespective of much lower interest rates and the prospect of lower income taxes, I believe we have moved into a multi-year period of consumer retrenchment and thrift.
The consumer in the U.S. is shell shocked.
Their equity and retirement portfolios are down but, far more importantly, 68% of American families own their own homes and home prices are down by more than 20% and likely to fall further.
If the value of your home drops by 25%, it shakes your confidence.
As a matter of interest the average Canadian carries 2 credit cards whereas the average American carries more than 6.
The average credit card balance per family is $2,000 in Canada and over $8,000 in the U.S. On top of all this, the job market is uncertain. In this environment I expect consumers to pull back and the U.S. personal savings rate, having fallen for more than twenty years, will now start a gradual rise back to the traditional range of 6% to 8% or higher.
The only way consumers can restore their balance sheets is by saving more and spending less – and spending less will delay recovery.
Step 1 to Recovery
So, where does the economy go from here?
My views are no better than anyone else’s except to say that this credit crisis and economic downturn has turned out to be vastly more serious than anyone anticipated every step of the way.
Notwithstanding the major stimulus plan currently under consideration in the U.S., I’m not sure why that should change.
Accordingly, I would anticipate a longer and deeper recession than many observers envisage at this time.
I wish I had a more definitive view, but there are just too many unknowns.
The first step to recovery
We need the stabilation of the banking business in the U.S. and the U.K.
At this stage we still don’t know which banks in the U.S. and Europe are going to survive in their present form – or who is going to own them. To date, various initiatives to repair these banks have failed, but a new plan is under consideration in the U.S. and due to be announced in the near future.
If this fails, there’s a real possibility, even a likelihood, that some of these major banks will have to be nationalized or perhaps put in “conservatorship” a la Fannie Mae and Freddie Mac.
Business owners will have to look to other sources of capital, such as private equity. In Money Magnet, there is a chapter on how to find funds and what they like to see.
My views are no better than anyone else’s except to say that this credit crisis and economic downturn has turned out to be vastly more serious than anyone anticipated every step of the way.
Notwithstanding the major stimulus plan currently under consideration in the U.S., I’m not sure why that should change.
Accordingly, I would anticipate a longer and deeper recession than many observers envisage at this time.
I wish I had a more definitive view, but there are just too many unknowns.
The first step to recovery
We need the stabilation of the banking business in the U.S. and the U.K.
At this stage we still don’t know which banks in the U.S. and Europe are going to survive in their present form – or who is going to own them. To date, various initiatives to repair these banks have failed, but a new plan is under consideration in the U.S. and due to be announced in the near future.
If this fails, there’s a real possibility, even a likelihood, that some of these major banks will have to be nationalized or perhaps put in “conservatorship” a la Fannie Mae and Freddie Mac.
Business owners will have to look to other sources of capital, such as private equity. In Money Magnet, there is a chapter on how to find funds and what they like to see.
Where can I raise capital?
Starting in July, the Ontario government will run a fund to begin investing in clean technology, life sciences, and digital media and communications technology companies.
The money will be doled out over five years and the fund will match small to medium private-sector investments and receive an interest in the companies it backs.
News of the fund comes about a month after a report that found that financing activity in Canada's venture capital market dropped to its lowest level in 12 years in 2008 as the economic downturn choked the flow of funds to small start-up companies.
If you want to raise capital, read Money Magnet to learn how to get the cheque books opening. Read more at Reuters.
The money will be doled out over five years and the fund will match small to medium private-sector investments and receive an interest in the companies it backs.
News of the fund comes about a month after a report that found that financing activity in Canada's venture capital market dropped to its lowest level in 12 years in 2008 as the economic downturn choked the flow of funds to small start-up companies.
If you want to raise capital, read Money Magnet to learn how to get the cheque books opening. Read more at Reuters.
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