The Canadian sector of cleantech is booming, and entrepreneurs in this up-and-coming field are turning to exporting to ensure their growth. Review of opportunities and challenges.
The term “clean technologies” refers to processes, products or services that reduce environmental impacts and are part of the fight against climate change. The cleantech – this is the term commonly used to designate companies specializing in this field or adopting these technologies – are committed to the path of sustainability and the circular economy, and affect sectors as varied as renewable energies, electrification of transport, sustainable agriculture, green chemistry and gray water recovery. In the current context of environmental crisis, this sector is not only essential, but also very promising and lucrative.
Canadian innovation is exported
Over the past decade, Canadian cleantech companies have stood out, both domestically and internationally. Thus, no less than 13 of them appear in the world ranking Global Cleantech 100 of the year 2022. For Canadian entrepreneurs, innovations aimed at improving energy efficiency and reducing the carbon footprint of industries offer enormous growth potential and very interesting opportunities outside borders. But they still need to be well equipped and well informed to break into new markets while minimizing financial risks. Because when it comes to exports, all is not rosy for green technologies!
Some of the short-term impediments that may impede international development include the global economic slowdown, rising interest rates, war in Ukraine, and disruption to supply chains caused by the pandemic. And that’s without taking into account the geopolitical tensions that are very present at the moment, which can hinder collaboration with certain countries.
At a time when Canadian companies are preparing to carve out a choice place for themselves in this promising field on the international scene, Export Development Canada (EDC) considers that the resolution of these problems is a matter of primary importance. . A true pioneer in supporting the Canadian cleantech sector for a decade, the Crown corporation, backed by its ties with the Government of Canada, the banking sector and a vast network of international contacts, offers a whole range of strategic, financial and commercial solutions adapted to business objectives, regardless of business size.
Carve out a place in the market despite the challenges
Currently, the global cleantech industry is valued at $3.3 trillion. According to a report just released by EDC, Canada’s cleantech sector, Canada’s contribution now represents about 1% of this total. This report further indicates that Canada ranks fourth in the world – behind the United States, the United Kingdom and Israel – in terms of its ecosystem of green technologies and its ability to propel start-ups.
“Innovation ecosystems cut across all economic sectors, and they play a crucial role in the cleantech space,” said Michael Borish, EDC Principal Analyst and author of the report. Although Canada’s performance is relatively strong compared to other countries, its export potential, which is valued at $10 billion, is highly dependent on the United States and limited to certain key areas. I believe that we must be careful not to sit on our laurels or lower our guard. »
Another consideration: the production capacity of Canadian companies is considerably less than that of the United States, China and several countries of the Organization for Economic Co-operation and Development (OECD). In addition, these clean technology companies are overwhelmingly SMEs with relatively limited resources, which face financing challenges.
According to EDC, global activities in the technology sector are expected to exceed $3.3 trillion in 2022. A great opportunity for Canadian companies ready to shine internationally.
From incubator to marketing, the challenges of growth
“While the Canadian business ecosystem is doing a good job of launching cleantech companies, it’s harder to help start-ups scale up and move to commercialization,” says Lynn Côté, National Lead , ecosystems and market intelligence for clean technologies at EDC. These companies are well supported by incubators and government programs at the start-up stage, but when they begin to grow, they must face new challenges and more difficult issues. Pass from the status of startup becoming a star – or simply becoming a commercially viable company – is not easy. »
The solution: knowing how to identify the most promising development sectors
An interesting avenue, according to Lynn Côté, would be to prioritize the growth of green technology companies well positioned to play a key role in the development of supply chains, citing battery production as a good example. She points out that collaboration between North American, European and some Asia-Pacific companies could grow in the coming years, in the context of the reorganization of supply chains and the global energy market.
Another possible solution: build on our strengths. According to EDC’s report, globally, the renewable energy sector was among the most funded in 2021, and it captured more than 50% of investments in the clean technology sector. Canada is particularly strong in this area, as well as in reducing carbon emissions and preserving natural resources, water and air quality.
Canada’s presence is more discreet in green technologies related to agriculture, food and agricultural soil management solutions. According to EDC, these areas offer excellent growth potential for Canadian companies, especially in the current context of global food insecurity.
The global demand for clean technologies is constantly increasing and, despite the challenges ahead, Canadian companies can take advantage of the situation to ensure their growth beyond borders and realize their full potential.
“The adoption of these new technologies is essential to reduce GHG emissions and reduce the carbon footprint of industries in order to ensure a sustainable future for all,” said Lynn Côté. Through its financing and risk management solutions, its trade expertise and its network of international relations, EDC is committed to supporting the growth of Canadian companies and to doing everything possible to achieve carbon neutrality on the horizon. 2050.”
Are you interested in exporting?
Export Development Canada (EDC) helps Canadian companies of all sizes succeed abroad. We give them the tools they need to thrive with confidence. We use our unique business knowledge and financial solutions to support and grow sustainable trade between Canada and the rest of the world, as well as the country’s competitiveness in the international market.
This content was produced by Le Devoir’s special publications team in collaboration with the advertiser. Le Devoir’s editorial team had no role in the production of this content.
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