Tuesday, September 20, 2011

A Buying Spree?

I sense the Obama Administration is backing off their talks about boosting the Green industries. Lately it's all about jobs and construction. My two cents? construction jobs are necessary because it puts people to work immediately and they will rebuild a crumbling infrastructure - both of which are good for politics and for this country.

Aside from building new bridges, fixing the roads, putting bike lanes in places where there once was a railway, what can we do to sustain the long term economic infrastructure? What happens once we have a sparkling new infrastructure and all of the temp construction workers are looking for different jobs to pay the bills?

We can't be serious about building forever. We can't just build our way out of a bad debt crisis and rescission. Well, at least I don't think we can. The next phase of our continued economic development may have to come from globalization. This may piss-off many Tea Party construction workers - globalization is a evil scheme plotted by the secret evil empire to take over America, where is the Justice League when you need them?  

Unnecessary paranoia aside, I think the next phase of our economic development involves the Green industry and foreign investments. It's still not the kind of sustainable development I hope for day after day, but it may be a stroll in the right direction. Many Asian and European conglomerates are buying U.S. funded start-ups in the renewable energy sector (mostly solar). SK Innovation, Korea, bought HelioVolt, a Texas based trying to bring its copper indium gallium selenide (CIGS) solar cells to the mainstream.

Samsung plans to invest and grow its solar manufacturing significantly by 2015 and it has hired Steve Fludder,  a once leader of GE’s Ecomagination group. In August a Chinese construction and real estate firm, TFG Radiant Group, along with their Singaporean investors, announced it would invest up to $450 million into Colorado’s Ascent Solar; and more recently, a company in Taiwan invested $50 million into Stion and obtained a license to manufacture CIGS panels at its factories.

DuPont is an American company, but it has recently joined the shopping spree and bought Innovalight, to boosts the efficiency of solar cell manufacturing; Innovalight’s customer base is conveniently rooted in China, India and South Korea, and it has not yet sold to any American customers.

LG, a Korean based company, recently licensed battery technology from Argonne National Labs, a U.S. Department of Energy Lab managed by UChicago Argonne; the batteries goes into vehicle productions for the likes of the Chevy Volt.

A France’s nuclear power company, Areva, recently bought solar thermal vendor Ausra whose past manufacturing was mostly based in Las Vegas. Total, another French oil company, recently bought a controlling stake in SunPower.

All together, Swiss and French companies have bought several billion dollars worth of U.S. companies over the last 18 months. In addition, a host of Japanese companies are working with Los Alamos National Labs on smart grid technologies as of current.

I think it's fair to say that globalization is no longer just about the U.S. going to places in Asia and finding cheap labor. Globalization these days is more about reevaluating the future demands of markets and investing in innovative sectors that will meet that demand. In the recent Bilateral Investment Treaty talks between China and U.S., the negotiators realized the huge potential powers of a new China consuming base and its impact on the rest of the world. I think these companies investing in U.S. green companies are smart to anticipate a shift in future consumption power: China will rise and demand, and the rest of the world will follow that demand. The market is being created right now and the only sad thing is we do not have enough capital to keep ownership interests in these companies and the profits will have to be shared with other investors.

That is the realistic picture of future globalization. We can no longer put up walls and believe in U.S. superiority. We still hold firm of our innovative strategies and the Obama administration is right to pour money into research and development into the green sector. But what will we do with those new innovations is critical to the business growth of our future generations. At the moment, we seem to be in apolitical gridlock instigated by the existing companies who do not wish to enter the green sector economy. Special interests are laying down roadblocks for these investments and innovations, and the rest of the world is taking full advantage of our ignorance.

Globalization is coming to us ladies and gentleman. As China was once the land of cheap labor, we are today's cheap intellectual labor. Seeing the way our education is taking a hit by the slash of budgets, I wonder how long we can keep our title. Soon, we may not have any claim to fame, and America is just another land of the many exploits.

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