From ideas to impact: How does GCIP help countries build strong cleantech innovation & entrepreneurship ecosystems?

Authors: Olga Rataj , GCIP Programme Lead (UNIDO), Lucy Chatburn , Principal Consultant (Cleantech Group)

Climate change is a global issue, and global collaboration is essential for creating the systems change that will transition us out of it. A challenge this complex and wide-ranging requires more than just individual country action. To foster cross-country collaboration and enable the low-carbon transition, UNIDO and the Global Environment Facility have launched a 2nd edition of the Global Cleantech Innovation Programme (#GCIP) in 2022 to leverage the multiplier effect by promoting linkages and strengthening South-South cooperation, thus allowing countries to leapfrog to cleaner and more resilient economies.

GCIP’s overarching goal is to mitigate climate change by reducing GHG emissions through accelerating the uptake and investments in innovative cleantech solutions. GCIP does this by supporting start-ups and small and medium-sized enterprises (SMEs) with innovative cleantech ideas in creating and upscaling robust business models. At the same time, GCIP strengthens national ecosystems and facilitates partnerships and networking between private and public actors. GCIP promotes an ecosystem approach that relies on the collective action of stakeholders such as research institutions, risk capital providers, accelerators and corporates, as well as the government.

Strong innovation ecosystems bring more innovation to the market by creating the conditions for start-ups and SMEs to thrive. In the cleantech sector, this is even more valuable, since cleantech innovation brings new solutions which will help us meet climate objectives, as well as contribute to sustained economic growth. Coordinated effort is needed to cut across industry sectors and ministry mandates while aligning with investor expectations and bottom-up entrepreneurial initiatives. GCIP facilitates this by providing a platform to help national stakeholders thrive in the cleantech ecosystem, while also fostering international connections between different ecosystems.

This ambition came to life during the International Vienna Energy and Climate Forum (IVECF) . At the sidelines of this event, GCIP organized Cleantech Days which convened over 100 participants representing national project executing entities, investors, government representatives, entrepreneurs, and industry partners from more than 20 countries. It was a great opportunity to identify synergies and establish concrete initiatives between stakeholders. Some of the participating entrepreneurs decided to collaborate on developing complementary cleantech solutions. Likewise, financiers connected with exciting investment opportunities among the entrepreneurs. In-country ecosystem builders identified opportunities to work on sectorial partnership opportunities and talent networks and set up a network to be able to support each other and exchange best practices in real-time.

Cleantech start-ups face multiple challenges from the local to the global level, including skills and organizational capacity, access to finance, and the need to compete with lower-priced, higher-polluting incumbent technologies. Policy and regulation can lift some of these barriers, by providing long-term signals to markets and investors, as well as innovation support which is not yet rewarded by the market.

UNIDO has partnered with Cleantech Group to develop a set of high-level frameworks that provide GCIP partner countries with the tools to strengthen their national cleantech ecosystems, identify synergies across those ecosystems, and foster opportunities to connect for knowledge and partnership building. These tools are applicable beyond the GCIP framework and can serve as a blueprint for national cleantech innovation ecosystem stakeholders worldwide. The first batch of these frameworks was officially launched at IVECF in November 2023:

• Cleantech Innovation Policy Strategy Framework
• Cleantech Innovation Cluster Development Framework
• Global Framework for Cleantech Ecosystem Actor Engagement

The Cleantech Innovation Policy Strategy Framework displays common strategies of countries that are successful in cleantech globally, as well as policies with demonstrated impact in increasing the participation of women and youth in cleantech entrepreneurship:

• The most effective policies and support mechanisms differ according to the company lifecycle, so countries can get better results from limited resources by targeting policies according to the objectives
• Countries which need to boost early-stage innovation can deploy measures like grants, R&D support, setting long-term policy signals and ensuring a national body dedicated to innovation
• At the demonstration and commercialization stage, effective policy strategies include de-risking private sector investment, green public procurement, developing enabling infrastructure and regulation which encourages the adoption of innovation
• Increasing the participation of women and youth in cleantech entrepreneurship can lead to increased economic growth, increasing job creation and surfacing innovation which anticipates market needs from diverse perspectives

Successful clusters leverage feedback loops and network effects to boost the success of individual innovators so that start-ups and SMEs within the cluster grow faster than the market average. The Cleantech Innovation Cluster Development Framework shares best practices from standout cleantech clusters globally, including Valencia (Spain), Boston (USA) and Chennai (India):

• Because of the hardware-intensive, Capital expenditures (CAPEX)-heavy nature of most cleantech solutions, cleantech clusters must facilitate access to specialized talent, debt finance as well as risk capital, and markets which are ready to adopt new solutions.
• Clusters may be driven by national priorities, may arise within previously established general innovation clusters, or evolve out of incumbent industries which need to decarbonize.
• In many standout clusters, a cluster facilitator has been critical to driving growth. At the local level, cluster facilitators may provide practical support for startups, and facilitate market access and municipal-level advocacy.
• National governments can create the conditions for clusters to flourish across a country by ensuring skills, providing financial incentives, and putting in place a policy and regulatory framework which rewards innovative solutions and attracts companies, investments, and talent

The Ecosystem Actor Engagement Framework explains how the different actors in a cleantech innovation ecosystem work together to create value for the ecosystem. In emerging ecosystems, government and civil society are important in driving engagement. As ecosystems mature, typically other actors including VC investors, accelerator operators and even startups themselves will spontaneously organize events and activities which benefit the whole ecosystem. The framework gives a methodology for designing effective interventions, as well as examples of successful engagement activities run by diverse ecosystem actors from ecosystems around the world.

Countries which are participating in GCIP cover a diverse range of geographies, face different climate risks, and have different historical industrial strengths. This represents exciting potential as they work to develop thriving cleantech innovation ecosystems which build on their strengths and position new industries to satisfy cleantech global demand trends.

This first batch of work on the ecosystem strengthening component of the GCIP Programme will be complemented by a subsequent Cleantech Innovation Capacity Building Framework, which will serve as a tool to identify and prioritize actions for ecosystem building, as well as the 2024 edition of the Global Cleantech Innovation Index (GCII).

?? For more information about GCIP, visit the UNIDO website: https://www.unido.org/GCIP , or the GCIP website: https://gcip.tech/

?? More information about the Cleantech Group: https://www.cleantech.com/

?? Questions, ideas, feedback? Send us an email at: [email protected]

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