01 Sep 2017
Research Brief: As the Wind BlowsTopics:
To better understand the prospects for future entrepreneurial success in sustainable industries, Professor Geoffrey Jones looks to the past. In his chapter in the new book Green Capitalism?, for instance, Jones delves into the history of wind energy to identify the factors that shaped the industry. While bold, innovative public policy played an important role in fostering success, the level of policy consistency was just as important, Jones discovers.
“There’s a Janus face of public policy, particularly in the United States, where environmentalism became bizarrely politicized,” he says. “Every time there’s a shift in politics, everything gets reversed.” In the US wind sector that meant decades of stop-and-start innovation, a lack of institutional structures, and speculative investing.
This stood in contrast to Denmark. Like the United States, Denmark saw a rise of wind entrepreneurs with the oil crises of the 1970s, but unlike the United States, where the government invested hundreds of millions in technology development, the Nordic country saw more organic and long-term growth. Its smaller private firms focused on the stability and institutionalization of the industry, while the United States had little to show for its investment before a new administration slashed funding.
In the 1980s, California’s progressive energy initiatives led to a massive boom in wind energy, but when the policies expired, the entire industry took another hit. Still, the boom helped the industry scale up globally, and the 1990s saw lasting social and policy shifts in Germany and Spain that encouraged their entry into the wind game. By 1996, the largest wind energy companies in the world included one US, two German, and five Danish firms.
“Wind energy—green energy in general—is still a constant work in progress,” says Jones, who also explores this topic in his new book, Profits and Sustainability: A History of Green Entrepreneurship. There’s a complex range of factors well beyond policy that have determined success, including geography, learning and innovation patterns, even ideology, he says, but “when policies are shifting all the time, it’s not helpful.”
Geoffrey Jones, “Entrepreneurship, Policy, and the Geography of Wind Energy,” in Green Capitalism? Business and the Environment in the Twentieth Century, ed. Hartmut Berghoff and Adam Rome.