Today was a session on the world economy, not specifically on energy like Day One. One big topic of discussion was where the engine of growth is in the US economy would be in the future. The feeling was that the economy had been growing by people leveraging existing assets and then selling those assets at a higher value to pay off the debt. This is the whole story in commercial and residential real estate. Clearly there now is a shrinkage in the amount of debt available to sustain this scheme because of the sub-prime loan debacle. This is not likely to abate any time soon, meaning in the next two years.
Therefore, the only other major engines of growth are (1) importing jobs through things like opening Toyota manufacturing plants in Kentucky, or (2) constant innovation--most likely in clean tech and life sciences, with computer/software tech about at a plateau. In fact, the peak in computer & software VC investment was in 1995 with $4B in VC money invested. In 2007, clean tech VC investment will equal or exceed this amount. That's a huge shift. The feeling here is that the loss of opportunity in leveraging existing real estate estates will in fact accelerate the trend to invest in clean tech and life sciences. Very interesting positive trend for us.
It also is a great validation of the push for the region to invest in clean energy and clean tech in general. However, big problem. To fuel a high-tech economy we need a lot of scientists and engineers. The US is graduating 60,000 engineers per year. China and India combined are graduating 600,000 engineers. Guess where the innovation economy is going to move. And because of tightened immigration since 9/11, we are forcing out the science and engineering students who come here from overseas and want to stay, but cannot meet the new rules. As a result they are deported. This is a really stupid result.
The afternoon was spent hearing about the new economy based on on-line communities. I had no idea. There are over 5000 sites like Facebook, MySpace, and YouTube. And thousands more are being created every day. Increasingly this trend is being harnessed for business. I am not sure I fully understand how, but I do understand a lot of people are beginning to think about it and do it. Our challenge is to use this new tool to promote clean energy in Sacramento. At a minimum getting our own "Sac Clean Tech Wiki" seems like what we need to do. Harness it to create a directory of clean tech in the region, and resources useful to clean tech. We need a 14 year old to help us do this. I can barely comprehend what was being discussed.
About the context here, "The East is Red" used to be the refrain from this land. Now it must be that "The Sky is Brown." Wow, they need to discover cleaner diesel buses, and CNG buses as well. The diesel exhaust mixed with the coal smoke creates a pretty powerful brew. Interestingly, hardly any Chinese smoke cigarettes. Probably a good thing. They are inhaling quite a dose as it is. Apparently the government said it was very bad for health, so don't do it. And people listened. The big contrast is with Japan, where everyone smokes. I think I prefer the coal smoke over the cigarette smoke.
There will be more energy discussion on Day Three, so stay tuned.
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