Bringing Climate Opportunities to Entrepreneurs: Lessons Learned from the Caribbean Climate Innovation Center

Transcription

1 Climte Technology Progrm In Brief Bringing Climte Opportunities to Entrepreneurs: Lessons Lerned from the Cribben Climte Innovtion Center The Cribben Climte Innovtion Center ws lunched in Jnury 2014 to help locl compnies build their businesses in climte-relted sectors. In region with gret vulnerbility to climte chnge nd very high energy costs new clen technologies hold tremendous promise. This In Brief drws lessons from the center s opertion, focusing on how the ide genertion sessions were essentil to seed locl compnies with climterelted business opportunities nd introduce new ides to locl climte mrkets. No. 5

2 Climte Chllenge nd Opportunity for the Cribben to the World Bnk report Ltin Americn Entrepreneurs: Mny Firms but Little Innovtion, lmost 70 percent of Cribben business owners opened business out of fer of losing their job or becuse jobs were not vilble. 1 In ddition, clen tech is rther new concept in the entrepreneur community, nd it is difficult to identify high-qulity entrepreneurs with sufficient climte knowledge nd business skills nd to develop support progrms ccordingly to help them grow their green ventures. The Cribben region fces serious climte chnge risks disproportionte to its smll globl greenhouse gs footprint: se level rises, extreme wether events, nd mny other climte-relted problems threten to cripple key industries such s tourism, fishing, nd griculture. In ddition, dependence on expensive nd voltile imported fossil fuels hve led to some of the highest electricity prices in the world (figure 1), which ct s mjor drg on economic development. Although these chllenges hve undermined the region s competitiveness, they lso present excellent mrket opportunities for innovtive entrepreneurs interested in renewble energy, wter mngement, sustinble gribusiness, nd other clen tech sectors. Aginst this bckdrop, the Climte Technology Progrm (CTP) of the World Bnk Group s infodev unit estblished the Cribben Climte Innovtion Center (CCIC) in Jnury The CCIC s objective is to support Cribben entrepreneurs nd new ventures to develop nd commercilize loclly pproprite solutions to climte-relted problems. This In Brief outlines the CCIC s business model nd shres key lessons lerned from its three yers of opertion. 1. Ledermn, Dniel, Julián Messin, Smuel Pienkngur, nd Jmele Rigolini Ltin Americn Entrepreneurs: Mny Firms but Little Innovtion. openknowledge.worldbnk.org/hndle/10986/ Although the Cribben hs vibrnt entrepreneuril culture, mny Cribben countries suffer from n unfvorble business environment nd lck of innovtion. For exmple, ccording Figure 1. Domestic Electricity Triff (US /kwh) for Selected Cribben Countries nd the U.S. In 2012 Cribben Countries U.S ni Tr i d d n uri m e U. S. Be lize Jm ic L St. uci nc. Vi en t h B m s Ne vis ti An gu i om nic n Gre d D St Sources: CARILEC Annul Report 2012 ( U.S. EIA ( S In Brief No. 5 Pge 2 e nts rr t

3 CCIC Phse 1. Lunch nd Erly Implementtion CCIC Phse 2. Enhnced Business del nd Service Offering The CCIC ws lunched in Jnury 2014 s one of the min pillrs of n umbrell World Bnk progrm clled the Entrepreneurship Progrm for Innovtion in the Cribben (EPIC), which ims to support the development of n enbling ecosystem to foster innovtive nd growthoriented enterprises in the region. The CCIC focuses on estblishing regionl cpcity to support clen tech strtups nd erly-stge compnies nd on contributing to the emergence of new domestic green industries. The CCIC is one of seven Climte Innovtion Centers (CICs) estblished by the CTP; it is lso member of the CIC Network run by the CTP to connect globl resources to the CICs. After little less thn two yers of opertion, the CCIC undertook strtegic reevlution of its business pln to ccount for the three primry lessons lerned operting in the region: The CCIC serves ll member countries of the Cribben Community (CARICOM) except Hiti: Antigu nd Brbud, The Bhms, Brbdos, Belize, Dominic, Grend, Guyn, Jmic, ntserrt, St. Kitts nd Nevis, St. Luci, St. Vincent nd the Grendines, Surinme, nd Trinidd nd Tobgo. It is mnged by consortium consisting of the Cribben Industril Reserch Institute (CARIRI) in Trinidd nd Tobgo nd the Scientific Reserch Council (SRC) in Jmic. The CCIC hs lso prtnered with like-minded business support orgniztions nd estblished network of 13 hubs to better serve the scttered CARICOM countries. As the only clen tech incubtor in the Cribben, the CCIC itself is like strt-up operting in n unknown environment. In its first two yers of opertion, the center focused on setting up its physicl infrstructure nd governnce structure, identifying pipeline of clen tech entrepreneurs, nd developing nd testing business support services for these entrepreneurs. The CCIC centered its support efforts on the proofof-concept (PoC) grnt competition. In the first PoC competition, held shortly fter the CCIC s lunch, 11 entrepreneurs from seven countries out of 300 pplicnts were wrded grnts of up to US$50,000. The CCIC lso offered number of other services, including in-house business dvisory, trining on investment rediness, nd networking events. 1. st entrepreneurs re not wre of clen tech mrket problems/opportunities nd think of clen tech s simple pplied science tht requires little locl innovtion efforts. 2. Smll CARICOM countries with prominent politicl nd socioeconomic differences re scttered cross the Cribben Se, which mkes it more difficult to develop business support model tht works for this frgmented mrket. 3. The clen tech ecosystem is very nscent, nd most locl stkeholders in this spce hve little experience in nurturing clen tech entrepreneurship nd innovtion. A benchmrking nlysis ws undertken on the CCIC in November It found tht the CCIC needed to enhnce its grnt-mking ctivities with more expnsive business model to ddress key gps in the Cribben clen tech ecosystem. The CCIC intended to use the PoC grnt competition s wy to source promising portfolio compnies. However, the success of these ctivities ws constrined by the generl lck of clen tech entrepreneurs nd the overll immturity of the regionl clen tech ecosystem. One centrl conclusion of the benchmrking nlysis ws tht the CCIC needed to build the ecosystem from the bottom up by supporting entrepreneurs t much erlier business stges, such s those working on ide genertion. Following up on the recommendtions of the nlysis, the CCIC hired clen tech incubtion specilist from New York to strengthen its strtegies nd service offerings. The center hs since developed suite of service offerings tht trget entrepreneurs t different stges of their business journeys: Ide Genertion Session (IGS): Exposes inexperienced entrepreneurs to climte-relted mrket problems by connecting them to mrket leders nd thus creting In Brief No. 5 Pge 3

4 trnsprency round these problems. Boot Cmp: An intense three-dy session to help entrepreneurs turn ides into concrete business plns. At the end of the boot cmp, strt-ups should hve business pln, business model, nd bsic mrket reserch. Accelertor: A six-month progrm tht offers stndrdized services on the development of mrket, product, nd compny infrstructure. Strt-ups should be incorported nd close to hving pilot by the end of the progrm. How to Run n Ide Genertion Session for Climte-relted Opportunities The CCIC hs lerned mny importnt lessons from its three yers of opertion. This In Brief focuses on the Ide Genertion Session progrm becuse the progrm responds to typicl wreness problem common in nscent or emerging clen tech innovtion ecosystems cross the developing world. Climte chnge undoubtedly thretens ll the Cribben countries, but do entrepreneurs know enough bout climte-relted problems to develop locl solutions tht effectively ddress these issues nd, t the sme time, mke business sense? Unfortuntely, there re few wys for Cribben entrepreneurs to connect with experts nd lern bout locl climte-relted mrket problems. Prior to the lunch of the CCIC, the CTP conducted survey with over 150 clen technology stkeholders throughout the region to identify the gps in the ecosystem. re thn 85 percent of respondents considered lck of regionl informtion for designing clen tech products nd services mjor hurdle tht hinders climte nd clen energy innovtion (with bout 30 percent strongly greeing). The Winning Tems of CCIC Boot Cmp Pitch Competition. The Cribben Climte Innovtion Center The CCIC uses its hub-nd-spoke model nd prtnerships to its offerings throughout the distributed CARICOM countries. The center in Jmic re responsible for designing nd testing the bove support progrms, nd the hub prtners will implement nd scle these services cross the Cribben. By December, 2016, the CCIC hs run 7 IGS sessions nd 7 boot cmps in Jmic nd severl hubs. Another 7 boot cmps hve been plnned in 2017 for the remining hubs. The CCIC will develop the necessry trining mterils nd help ll 13 hubs execute t lest one boot cmp by September The Accelertor progrm ws lunched in June Three compnies hve been ccepted, nd second cohort is being selected. See figure 2 to lern more bout the phse 1 nd phse 2 of the CCIC. In Brief No. 5 Pge 4 The CCIC fills this wreness gp by running IGSs. Ide genertion sessions re tool incubtors nd other business support orgniztions use to prepre potentil entrepreneurs. Entrepreneurs sometimes do not fully understnd the significnt hurdles of lunching new compny: mrket reserch, product development, fundrising, nd knowing how to effectively crete compny. Clen tech entrepreneurs often fce dditionl chllenges, such s generl lck of knowledge regrding current nd ctionble mrket problems, difficulty in ccessing customers, nd limited ccess to hrdwre support such s testing, prototyping, nd mnufcturing.

5 Figure 2. Phse 1 nd Phse 2 of the CCIC PHASE 1 Orgniztion Structure 2 consortium members who estblished the Center nd oversees its opertion; 1 CEO nd 2 stff; 1 center in Jmic nd 13 hubs. Service offerings PHASE 2 A Spoke nd Hub del 1 progrm mnger nd 3 stff; The Center: designs, pilots nd develops progrms nd trins hubs to implement. 13 hubs: scle up incubtion progrms cross the Cribben nd provide testing fcilities for locl entrepreneurs. Locl entrepreneurs. A Suite of Services for Compnies t Different Business Stges Proof of Concept (PoC) grnt competition, some business dvisory services nd networking events. Portfolio Compnies 300 compnies pplied for the PoC competition, nd 11 compnies received grnts of up to US$50,000. Prtnerships nd Network Consortium members: Scientific Reserch Council of Jmic (SRC) nd the Cribben Industril Reserch Institute (CARIRI). Ide Genertion Session: Expose prticipnts to climte-relted mrket problems nd entrepreneurship. Lunched in Jmic in Feb. 2016, followed by 6 other sessions in Trinidd, St. Luci, Dominic, nd other hubs, ttrcting 400+ entrepreneurs. Boot Cmp: An intense three-dy session to help entrepreneurs to turn ides into concrete business pln. Lunched in Jmic in Feb. 2016, followed by 6 other boot cmps cross the Cribben, ttrcting 260+ entrepreneurs. Accelertor: A sixmonth mentorshiphevy progrm tht offers stndrdized services on the development of mrket, product nd compny infrstructure nd ends with demo dy to the investor community. Lunched in Jmic in June Prtnerships with Like-minded Orgniztions Consortium members: SRC nd CARIRI World Bnk progrms: EPIC nd the CIC Network Other Existing nd Potentil Prtners: Antigu nd Brbud Investment Authority, Business Builders Globl, Cribben Centre of Excellence for Sustinble Livelihoods, Institute of Sustinble Livelihood Ledership & Exchnge, Ntionl Development Foundtion of Dominic, Dynmic Youths of Grend, Institute of Privte Enterprise Development Limited, Jmic Business Development Corportion, ntserrt Development Corportion, Quıntessence Consultıng Inc., St. Luci Colition of Services lnc., the Colition of Services Industries, Guguplex Technologies SAC, Strt-Up Jmic, nd the Brnson Center of Entrepreneurship. In Brief No. 5 Pge 5

6 The CCIC designed the IGS progrm to help entrepreneurs identify environmentl problems nd brinstorm effective strt-up ides to ddress them. This is done vi pnel with mrket experts who discuss ctionble problems in their respective fields nd follow-on session on business idetion nd brinstorming. See figure 3 for detils of how the IGS works. wter shortge problem: (1) incentives for people to stop wsting wter, nd (2) development of new technologies to produce wter for households, such s deslintion. After creful discussion with the experts, prticipnts cme up with some promising solutions. For exmple, one group decided to develop guge device tht trcks wter usge from households, which could be used by the wter compny to enble communiction between utilities nd customers nd crete incentives for people to sve wter. For the IGS held in Trinidd nd Tobgo, the CCIC invited the country s wter uthorities, nd the government officils informed the entrepreneurs of the wter consumption issues the country currently fces. The cost of pumping wter in Trinidd is so low tht people hve been using wter frivolously. However, s the quifers become empty nd the price of electricity rises, the cost of wter will skyrocket. The current wter consumption pttern will not be sustinble in the long term. The CCIC hd run seven IGSs by December 2016 nd ttrcted more thn 400 prticipnts, including university students nd grdutes, young professionls, first-time entrepreneurs, nd experienced entrepreneurs. Both experienced nd inexperienced entrepreneurs found the IGSs very useful. They left the sessions with much deeper understnding of climte problems nd potentil business solutions to ddress them. The government representtives believe there re t lest two key spects tht need to be ddressed to solve the Figure 3. How the Ide Genertion Session Works le. 3 du le. du le. du Idetion: Prticipnts brek into groups nd go through the idetion process combined with mrket problems presented in dules 2 nd 3 to develop potentil business solutions. 2 4 Expert Pnel: 5-8 experts, including government officils, business leders nd cdemics, give insights into ctionble problems fced by their industries, such s trnsporttion, wter, energy production, energy infrstructure nd griculture. In Brief No. 5 Pge 6 Industry Specific Brekout Groups: Prticipnts brek into groups nd rotte, spek with different industry representtives bout dditionl mrket problems, find out dditionl detils on the problems, nd get feedbck on ny of their preconceived solutions. du le. 1 Bsic trining: prt 1). strt-up 101 for prticipnts who re less fmilir with the entrepreneurship ecosystem; prt 2). idetion: why it is importnt, when it occurs nd how to go through the process; prt 3). exmples to illustrte the Idetion process.

7 Lessons Lerned: Seeding Climte Opportunities for Entrepreneurs in Nscent Ecosystems The CCIC is the first CIC under the CTP to include n ide genertion progrm in its service offerings. The IGS hs helped the CCIC to promote its brnd; build its network of mentors, coches, corporte prtners, nd mrket leders; nd identify existing nd future entrepreneurs. At the sme time, both the center nd the CTP hve lerned lot from designing, testing, nd scling up the IGS. 1. Understnd Privte Sector s Grsp of Climterelted Business Opportunities During the phse 1 period, the CCIC underestimted the immturity of the Cribben clen tech mrket nd focused on the PoC grnt competition to source promising entrepreneurs. The PoC model hs worked well, nd it ttrcted some goodqulity strt-ups in the Keny Climte Innovtion Center. However, the Cribben hs vstly different ecosystem thn Keny: clen tech remins novel concept, nd there re mny fewer entrepreneurs here who re interested nd fmilir with clen tech sectors to begin with. The IGS effectively fills in the gp by sowing the seed nd prepring the first genertion of clen tech entrepreneurs in the region. time to nurture clen tech industries from the ground up. Support orgniztions need to hve ptience nd relistic expecttions: most CCIC boot cmp entrepreneurs will not be redy for the ccelertor progrm over night. 3. Adpt Globl Best Prctices to Seed Ides to Climte Sectors To ddress the vrious issues identified in the ecosystem, there is no need for the CCIC or other incubtor progrms to reinvent the wheel. They hve wide pool of globl best prctices to drw upon. For instnce, the ide genertion session ws inspired by the XPrize Foundtion s incentivized competitions, which chllenge tems from ll over the world to develop solutions to mrket filures cross wide rnge of sectors, with the top tems wining grnd prize. The CCIC dopted this concept, djusted the model to fit the Cribben context, nd developed the IGS. 2. Strt from Step One in Nscent Climte Innovtion Ecosystem Similr to the initilly PoC-focused CCIC, other incubtion centers in the region hve tried strting with lter stge compnies nd run into similr chllenges. In nscent clen tech innovtion environment like the Cribben, it is necessry for the CCIC to build the ecosystem from the bottom up: strt with lrge pool of potentil entrepreneurs vi n IGS nd select more sophisticted entrepreneurs to move on to series of incresingly competitive progrms tht is, boot cmp, ccelertor, nd incubtor. Through the series of progrms, the CCIC ims to generte enough ttention from other plyers interested in clen tech innovtion to collectively build up green innovtion ecosystem. However, it tkes In Brief No. 5 Pge 7

8 Climte Technology Progrm In Brief About Us The Climte Technology Progrm (CTP) In Brief series is publiction of the World Bnk Group s Trde nd Competitiveness (T&C) Globl Prctice nd infodev. infodev s CTP is mnged by the Innovtion nd Entrepreneurship Unit of T&C. CTP focuses on the growing opportunities of the clen technology sector in developing countries. Through globl network of seven Climte Innovtion Centers, the progrm provides locl entrepreneurs with the knowledge nd resources they need to lunch nd scle their innovtive business solutions to climte chnge. CTP In Brief is series of knowledge briefs highlighting importnt spects of the CTP globl nd in-country opertions nd reserch. Lern more t Acknowledgements This brief ws prepred by Xue Zheng with contributions from Jonthn Coony, Michel Lightmn, Dilett Doretti, nd Eline Tinsley. re on the CCIC s progrms nd results cn be found t www. cribbencic.org or The World Bnk Group 1818 H Street NW Wshington, DC Website: Emil: info@infodev.org Fcebook: /infodevwbg