Industry experts question where stimulus funds are going

Is the American Reinvestment and Recovery Act really going where it’s needed most?

Kicking off the Cleantech Group's Cleantech Forum XXIII in Boston today, Mohr Davidow Ventures Partner Marianne Wu and CEO of Sustainable Development Technology Canada Vicky Sharpe questioned the stimulus bill’s focus on creating jobs amid the recession and credit crisis, but not necessarily its focus on innovation. The industry experts spoke as part of an informal discussion with a group of about 50 people, primarily women, involved in the cleantech sector.

U.S. President Barack Obama has said that the $825 billion in U.S. stimulus funding would create or save between 3 million to 4 million jobs in the United States by 2010.

“There do need to be some jobs out of this,” Wu said. “But the issue is there has to be some tying of [the jobs and the innovation] together.”

Sharpe said the stimulus package has been “throwing money at the wrong kinds of industries.” As an example, she suggested fast rail and transportation infrastructure as better uses of the funds than where they are going today to existing companies that can create new jobs quickly (see DOE sets aside $300M for autos, solar, carbon capture and Johnson Controls scores $299M from DOE for auto batteries).

Wu also said companies receiving stimulus funds need to be able to have a long-term competitive impact.

“We’re not putting in the fundamental investment where we can really be competitive,” said Wu, citing that the United States need to do more than just "catch up" to the rest of the world.

Wu said government funding is going to need to play a role through direct funds and grants in making some of the necessary innovation happen. She suggested that pricing signals that put a price on carbon are expected to help take the risk out of investing large chunks of capital into cleantech.

“You’re going to need to have some de-risking,” Sharpe said. “We can’t afford to wait for a slow evolution.”  

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