Canaan Bridges Consulting Inc. 3 min read
Green start-ups are created almost every day. Not all of these businesses will remain viable, despite their breakthrough inventions. Canaan Bridges taps into four sustainable development issues to consider when leveraging growth in green startups.
Access to Financing
The number of startups that can sustain their operations without help from outside sources is very small. When venture capitalist funding is available, there is no guarantee that capital injection will continue beyond the seed stage of a business. Many businesses, including green start-ups, fail in times of economic uncertainty. A growing number of countries now recognize the importance of green businesses, especially those producing goods and services that can mitigate (in a meaningful way) the impact of environmental disasters. Grants and innovation incubator programs for green technology businesses are examples of government-led initiatives in the green space. Programs like these encourage long-term green entrepreneurship, increasing the likelihood of sustainable growth in green businesses. These initiatives are to be encouraged. However, policymakers should be conscious of the different types of barriers to entry that can prevent a small business from accessing these innovation programs. Lack of program awareness and social, cultural and economic barriers can cause small businesses not to use government-funded initiatives. Navigating these challenges without compromising program effectiveness is a real issue that deserves attention.
Developing, monetizing, and managing green innovation in silos is almost impossible. Building sustainable global partnerships help green innovators to remain viable long-term businesses through collaborative work with like-minded partners within and across economies. Building networks across diverse sectors can help advance green innovators’ goals. Here, the focus is on creating strong assets, leveraging human and financial capital, increasing market access opportunities across borders, and encouraging collaborations when creating proprietary content. Sustainable partnerships can also promote a strong IP and innovation culture in among green businesses. This leverages green innovation, when used as part of an IP strategy.
A green startup that knows about IP can use its knowledge to inform strategic market decisions. An innovator with IP knowledge will likely be more confident in dealing with IP issues, including at the development stage of the innovation. For example, knowing how to conduct prior art searches can help the inventor identify the scope of protection in patent claims and the invention’s novelty. IP awareness is essential in building sustainable innovation culture in green businesses.
Is there a Role for Green Patent Pools?
Patent pools usually include complementary or substitute patents databases, available to users (licensees) for a fee. Patent pools help patent owners to pool their patents together. These pools allow licensees to obtain and use, for a licensee fee, patented technologies in their innovations. In this context, it may reduce transaction costs. Complementary patent pools are usually preferred over patent substitutes for reasons which will become more apparent below.
Patent pools are not common in the green industry. However, it is one way of commercializing and managing IP, and it is worthwhile to consider its fit with specific green products. For example, can sustainable linkages between green technologies and patent pools be made? What benefits are available for an early entrepreneur in the clean technology space seeking to pool her patents with that of others in related but different industries? How will this work across different countries? One drawback of patent pools is that they may run afoul of anti-trust laws, particularly where the pool mainly consists of patent substitutes. The reasoning behind this is that when the patents are substitutes, there is little or no incentive for others outside the pool to innovate in the field. The pools may therefore become a breeding ground for monopolistic behaviour. Green startups should think carefully about the costs and benefits of being a part of patent pools.
Several factors are crucial to consider when scaling up a green startup. These four considerations (by no means exhaustive), highlight the importance of a broad-based approach to sustainability in green businesses.
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