I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.
– Thomas Edison, 1931
As the Gulf oil crisis and bleak jobs picture remind us, there is an urgent need for new green-energy sources, jobs, and related technology. America’s competitors get this. In 2009, China issued more than 580,000 patents, up 41 percent from 2008. It also now is the world’s largest manufacturer of wind turbines and solar panels.
Yet here in the United States, utility patents have stalled and some 85 percent of inventions in the US die before they reach commercialization.
Many of these inventions fail not because they weren’t useful, but because their creators ran out of time and money.
Inventors need a better support system
If 85 percent of cars ran out of gas before they could complete their trips, we’d add fuel stations, increase efficiencies, or build more roads to solve the problem. Likewise, if we’re serious about building America’s innovation economy, we must redesign the support network for America’s inventors.
A lone inventor with a day job might spend years and up to $100,000 developing a new technology at home. It takes a village to turn an idea into a business: The daunting steps to commercialization include hiring lawyers, creating a business plan and prototype, and finding investors and customers.
Many inventors run out of money – and their friends’ money – before a prototype is built.
Yet their ideas are often quite valuable. As CEO of SkyBuilt Power, a renewable-energy company, I see potentially great ideas nearly every week.
They include wind turbines without blades or gears, heat pumps that cut air-conditioning
costs in half, and solar-power systems that eliminate fuel costs.
The green Grand Canyon
Sadly, many inventors behind these innovations eventually give up for lack of time and money. This is the “green Grand Canyon” – the big gap from new technology prototypes to commercialization and profitability. We can bridge this gap, but only if we address three basic problems:
1. There is no central clearinghouse for information. Inventors need funding, advice, and other support. Ironically, there may be government agencies willing to fund such inventions and private companies wanting them. But the information and parties are scattered and don’t connect.
We could solve this problem by creating a “tBay,” an inventor’s eBay. This would be a virtual information meeting place for all parties interested in a specific technology. Buyers, sellers, inventors, grantors, venture capital firms, and patent lawyers all could meet in a virtual marketplace for any specific subject area, such as “mobile solar tracking systems.” It takes all of these to go from an idea to commercialization.
2. It costs too much and takes too long to get a patent – typically many years and tens of thousands of dollars. Let’s provide a faster patenting system. There should be fixed deadlines for final action on green and other technology patent applications. Tax revenues from having more commercialized products would pay for the additional examiners and generate a profit.
3. There’s no central physical meeting place. Stakeholders in green technology need a place to meet. Let’s create Local Technology Centers (LTCs) in each state – perhaps 100 of them – where inventors, businesses, law firms, investors, government representatives, and engineers all could meet.
Federal funding could be provided to each state, along with LTC guidelines, yet states must have the flexibility to create custom approaches. This allows best-of-breed approaches to be replicated.
These LTCs would be an entrepreneur’s bazaar. They would have meeting rooms, secretarial support, and engineering software. Investors could get advice on patents and business matters from law firms, consultants, and venture capital firms, and meet with research institutions.
There would be facilities for fabricating prototypes. It would buzz with all the players working together in the creative process. Retired executives, engineers, and others could be added as a green technology volunteer corps or be paid by getting an equity share of the invention.
A breeding ground for ideas and deals
Cross-fertilization and deals would occur on the spot around the water cooler. Inventors could present their invention with a simple business plan to a panel of experts. And a funding decision could be reached in as little as 10 days. (Speed is essential.) Winners would receive a substantial grant, say $100,000, to spend at any LTC for anything – legal support, engineering advice, and so on.
Funding could be done on a “self-licking ice-cream cone” model, used by venture capital firms. Government seed money could start the centers. Next, the inventor could grant a small percentage of company’s equity to the LTC. If the product became profitable, the inventor would pay back the funds received plus interest or a small percentage of the profit.
Or, venture capital could augment federal funds in a private sector/government partnership. For example, a private investment group could raise private funds to coinvest with the government in starting up the LTCs, or handle the whole investment itself. That investment fund would be able to pick the best of the best of thousands of promising inventions and reap a fair profit in return. In-Q-Tel, the CIA’s strategic investment firm, has been successful with a somewhat similar approach.
In his speech to the nation about the oil crisis and the need for new technology last month, President Obama gave us a mission: “Now is the moment for this generation to embark on a national mission to unleash America’s innovation and seize control of our own destiny.”
So let’s think big, America. Through tBays, LTCs, and other needed reforms, we can solve the green Grand Canyon problem. Then we can regain our technology leadership in the world and create more green technology and jobs a lot faster.
David J. Muchow is president and CEO of SkyBuilt Power, a renewable-energy company.