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Innovation and Entrepreneurship in Renewable Energy

Innovation and Entrepreneurship in Renewable Energy

Chapter:
(p.199) 7 Innovation and Entrepreneurship in Renewable Energy
Source:
The Changing Frontier
Author(s):
Ramana NandaKen YoungeLee Fleming
Publisher:
University of Chicago Press
DOI:10.7208/chicago/9780226286860.003.0008

This chapter documents three facts related to innovation and entrepreneurship in renewable energy. Using data from the US Patent and Trademark Office, it is first shown that patenting in renewable energy remains highly concentrated in a few large energy firms. In 2009, the top 20% firms accounted for over 40% of renewable energy patents in our data. Second, we compare patenting by venture capital-backed startups and incumbent firms. Using a variety of measures, it is found that VC-backed startups are engaged in more novel and more highly cited innovations, compared to incumbent firms. Incumbent firms also have a higher share of patents that are completely un-cited or self-cited, suggesting that incumbents are more likely to engage in incremental innovation compared to VC-backed startups. Third, the chapter documents a rising share of patenting by startups that coincided with the surge in venture capital finance for renewable energy technologies in the early 2000s. This chapter also points to structural factors about renewable energy that have led the availability of venture capital finance for renewable energy to fall dramatically in recent years, with potential implications for the rate and trajectory of innovation in this sector.

Keywords:   renewable energy, innovation, venture capital

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