A new wave of small young tech firms is helping the UK to unlock a larger share of the £3 trillion global low carbon sector, a new study reveals today.
New research by Shell Springboard and the Carbon Trust shows the number of small UK businesses targeting a growing international market for low carbon products has doubled in the past two years - rising from 37 percent in 2011 to 76 percent in 2013.
Almost two in five SMEs have already entered foreign markets with new low carbon technologies - making start-ups in the low carbon sector almost twice as likely to have secured export deals as small businesses in other industries. Moreover, three-quarters of small enterprises plan to expand into new markets in the next 24 months.
The USA (15 percent) and Germany (12 percent) emerged as the most popular export markets among a diverse range of countries. China, India, Australia, the Middle East, Canada and South America were among the top destinations companies plan to expand into over the next two years.
The findings are welcome news for the UK economy, with two-thirds of small low carbon enterprises planning to create new jobs over the next 12 months. More than half have created new jobs in the last year and 12 percent hired more than four new team members.
The launch of the report - 'Low carbon entrepreneurs: the new engines of growth' - coincides with the UK Final of the Shell Springboard Awards, a programme run by Shell that to date has awarded £2.58million to cutting-edge UK enterprises developing new pioneering low carbon technologies. Small enterprises account for more than 90 percent of the UK's low carbon sector, now estimated to be worth more than £120 billion to the UK economy in annual sales (1). According to the latest Government figures, the global low carbon economy is currently worth £3.3 trillion and forecast to be worth £4 trillion by 2015 (2).
An analysis of almost 2,000 low carbon SMEs pinpointed London, Oxford, Cambridge, Leeds and Southampton as the UK's leading hubs for low carbon innovation. Relative to population size, Derbyshire and Nottinghamshire also had high proportions of low carbon SMEs - with access to talent and regional funding emerging as key reasons that drive business location.
However, the sector is not without its challenges. Chief among these are access to funding, technology demonstration opportunities and securing the right skills.
Small enterprises are critical to driving the innovation required to tackle one of the greatest challenges of our time: meeting rising demand for energy while reducing CO2. As this new research for Shell Springboard shows, small enterprises are also making a big contribution to the UK economy by opening up new markets, creating jobs, and generating growth.
Edward Daniels, Shell UK Chairman
The low carbon economy is already a real engine of growth for the UK economy. It is worth more than £120 billion in annual sales and employs almost 1 million people. This new research indicates that the sector is looking to expand further and is targeting vital exports as it does so. The research also shows that younger entrepreneurs are ready to join and establish a new generation of low carbon businesses in the future.
Tom Delay, Chief Executive of the Carbon Trust
We are taking action to increase the UK share of the £3 trillion global low-carbon market, so it is encouraging that SMEs are already exploiting the huge growth potential. We will continue to ensure that existing and budding entrepreneurs are aware of the opportunities and support available to them so that they can grow, create jobs and continue to make a valuable contribution to the economy.
Vince Cable, Business Secretary
The report also looks ahead to the next generation of low carbon innovators. Almost one third of entrepreneurs under the age of 30 say they would like to start a new low carbon business or get involved in the low carbon economy but don't know how to go about it.
ENDS
For further information, please contact Thomas Morris, Emma Dennis, Jordan Bickerton or Phil Drew on 020 7839 4321 or at shellspringboard@fishburn-hedges.co.uk
Notes to editors
Cited sources
- CBI, "The Colour of Growth"
- HM Government, "The Move to a Green Economy: A Guide for small business"
About the research
The Carbon Trust and Shell conducted this research between April and early May 2013. It comprised quantitative data analysis of 1,855 low carbon SMEs and qualitative research via surveys of over 200 low carbon entrepreneurs who had applied to Shell Springboard or the Carbon Trust. In depth phone interviews were also conducted with over 20 low carbon entrepreneurs or technology commercialisation experts who have advised multiple low carbon SMEs on their businesses. In addition, the study also surveyed over 200 young entrepreneurs about the low carbon economy and whether it was a sector they had an interest in participating in. These entrepreneurs were predominantly aged between 16-30 years old and are members of the Shell LiveWIRE programme.
About Shell Springboard
Shell Springboard a social investment programme is fully funded and managed by Shell. It provides a financial boost to UK based, small to medium sized enterprises with innovative, low carbon business ideas. Since being set up in 2005, Shell Springboard has provided awards totalling over £2.58 million to 71 companies with no strings attached. In 2013 awards a total of £330,000 will be given to 9 companies. In total Shell Springboard has awarded £2.58 millionof funding for innovative low carbon businesses in the UK over the last 8 years.
The finalists for the national Shell Springboard Awards 2013 are:
- KiWi Power
- Vantage Power
- Ventive Ltd
- Antaco UK
- AlbaTERN
- Firefly Solar Generators Limited
About Shell and the future of energy challenge
- By 2050, the world's population could be more than 9 billion, up from 7 billion today. By 2030, it is estimated that our world will need 30-50% more of natural resources such as water, food and energy to keep up with rising demand. And this global demand will increase carbon emissions, intensifying the impact of climate change. To help meet these challenges, Shell believes the Global Energy System needs to undergo a fundamental change. It has to become broader, cleaner and more efficient. Specifically we need to reduce carbon emissions.
- Over the last five years, Shell has spent $2.2 billion developing alternative energies, carbon capture and storage and other CO2 related Research & Development - including nearly twenty (20) million pounds in related research and development at UK Universities and other institutions.
To find out more about Shell Social Investment, please visit:
www.shell.co.uk/socialinvestment
About the Carbon Trust
The Carbon Trust is an independent company with a mission to accelerate the move to a sustainable, low carbon economy. The Carbon Trust:
- advises businesses, governments and the public sector on opportunities in a sustainable, low carbon world.
- measures and certifies the environmental footprint of organisations, products and services.
- helps develop and deploy low carbon technologies and solutions, from energy efficiency to renewable power.
For further information please contact the Carbon Trust press office on 020 7170 7050 or press@carbontrust.com. Alternatively visit www.carbontrust.com
