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RD&D in emerging economies is strongly focussed on renewables, 2.1
with far fewer collaborative RD&D activities in industry, transport,
and energy efficiency in buildings. Governments should develop clear
criteria for setting priorities not only in technology areas but also in
selecting partners for international RD&D collaboration.
Although India has relevant industries and a vibrant entrepreneurial
ecosystem, R&D activities are predominantly government-led,
and Indian research is strongly directed towards goals set by the
government. High interest rates and short-term loans increase the cost
of renewable energy projects in India by up to a third compared with
similar projects in the United States and Europe (Shrimali et al. 2012).
Funding constraints have been affecting all stages of the innovation
process in India, particularly since the 2008 financial crisis, but the
government can help address these by building partnerships and
networks with the private sector, and providing incentives to drive
capital investment in low carbon technologies, through supportive
policies like grants, soft loans, and tax incentives.
1.3 Lessons Based on Case Studies
1.3.1 Governments Must Invest in Clean Energy RD&D
and Innovation
Government support for RD&D is vital to stimulate the development
of an adequate portfolio of new and improved energy technologies
on a scale and within the timeframe needed. Demonstration and
deployment of tomorrow’s innovations are underpinned by robust
funding of basic science and applied research and development in key
areas today. The private sector will not do this on its own, as companies
face costs associated with environmental challenges and difficulties in
reaping returns from their investments and entry barriers.
Industrial priorities focus on shorter-term, incremental
improvements designed to maximize returns on energy RD&D
investments. A survey of 240,000 businesses in the United States
involved in energy technology innovation, from small start-ups to
multinational corporations, found that a large fraction of them are
expected to recoup investments in only two to three years (Anadon et
al. 2011).
To make sure new technologies are widely propagated, governments
must supplement public funding schemes for RD&D (e.g., grants,
loans, and tax credits) with non-RD&D support for business innovation
(e.g., support for venture capital, public–private partnerships and
business networks, nascent entrepreneurial activities) and targeted
Chapter 1 Low Carbon Technology and Innovation Policy 51
with far fewer collaborative RD&D activities in industry, transport,
and energy efficiency in buildings. Governments should develop clear
criteria for setting priorities not only in technology areas but also in
selecting partners for international RD&D collaboration.
Although India has relevant industries and a vibrant entrepreneurial
ecosystem, R&D activities are predominantly government-led,
and Indian research is strongly directed towards goals set by the
government. High interest rates and short-term loans increase the cost
of renewable energy projects in India by up to a third compared with
similar projects in the United States and Europe (Shrimali et al. 2012).
Funding constraints have been affecting all stages of the innovation
process in India, particularly since the 2008 financial crisis, but the
government can help address these by building partnerships and
networks with the private sector, and providing incentives to drive
capital investment in low carbon technologies, through supportive
policies like grants, soft loans, and tax incentives.
1.3 Lessons Based on Case Studies
1.3.1 Governments Must Invest in Clean Energy RD&D
and Innovation
Government support for RD&D is vital to stimulate the development
of an adequate portfolio of new and improved energy technologies
on a scale and within the timeframe needed. Demonstration and
deployment of tomorrow’s innovations are underpinned by robust
funding of basic science and applied research and development in key
areas today. The private sector will not do this on its own, as companies
face costs associated with environmental challenges and difficulties in
reaping returns from their investments and entry barriers.
Industrial priorities focus on shorter-term, incremental
improvements designed to maximize returns on energy RD&D
investments. A survey of 240,000 businesses in the United States
involved in energy technology innovation, from small start-ups to
multinational corporations, found that a large fraction of them are
expected to recoup investments in only two to three years (Anadon et
al. 2011).
To make sure new technologies are widely propagated, governments
must supplement public funding schemes for RD&D (e.g., grants,
loans, and tax credits) with non-RD&D support for business innovation
(e.g., support for venture capital, public–private partnerships and
business networks, nascent entrepreneurial activities) and targeted
Chapter 1 Low Carbon Technology and Innovation Policy 51
