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Environmental Business Cluster: Producing positive impacts on the environment – and the economy

by Danaline McPhail Bryant

October 2008

NBIA’s 22nd International Conference on Business Incubation featured a green, environmentally friendly theme, and as it turned out, that was a serendipitous choice. That’s because the winner of the 2008 Randall M. Whaley Incubator of the Year award is the Environmental Business Cluster of San Jose, Calif.

The number of environmentally friendly companies is growing worldwide, but no facility is more committed to protecting the environment than EBC. That commitment is reflected in the incubator’s slogan: “Improving the environment one company at a time.”

When the winner was announced at the May awards luncheon in San Antonio, a loud, enthusiastic response came from the table where EBC staff members, associates and clients were sitting. Accepting the award were EBC Executive Director Jim Robbins, Assistant Director Chuck Erickson and John Weis, deputy director of the San Jose Redevelopment Agency, and they were cheered all the way to the rostrum.

“I want to thank NBIA for this great award,” Robbins said at the luncheon. “It has been a labor of love. We’ve kissed a few frogs along the way, but at least they were all green frogs.”

A history of achievement

EBC, in close partnership with the city of San Jose and San Jose State University, is a nonprofit technology commercialization center for start-up companies focusing on products or services that will have a positive impact on the environment. Opening in 1994, EBC was the first business incubator in the United States to concentrate on environmental companies.

The San Jose State University Foundation manages EBC and another downtown San Jose business incubator: the Software Business Cluster, winner of NBIA’s 2000 Randall M. Whaley Incubator of the Year award.

Together, the two incubators are responsible for the creation of 3,500 jobs in downtown San Jose and have helped their client companies raise more than $700 million in growth capital. To date, EBC has assisted 145 companies involved in environmental technology and the creation of clean-tech jobs.

Erickson, who also serves as managing director of SBC, says EBC has achieved this remarkable success by keeping its assistance narrowly focused.

“We are very focused on the business side of a company’s success,” he says. “We try to stay away from being enamored of their science and focus on what we need to do to help them be successful in the marketplace.”

Keeping pace with change

The type of environmental businesses served at EBC has changed over the years. “We focus on things concerning the environment, and today that’s mainly clean and renewable energy, but in the past it was waste management, environmental clean-up, and recovery from landfills,” Erickson says.

The original focus was due to the large areas of polluted ground in the area in 1994. The ground pollution first came from military manufacturers during World War II, and in postwar years from the technology industry.

“So here in Silicon Valley, from the mid-1940s to the 1990s, there were a lot of activities that put stuff in the ground that shouldn’t have been there,” Erickson says. “At the time [EBC was founded], there was a strong interest in getting it out.”

There were many companies that did remediation work, but Robbins, EBC’s founder, advocated starting local businesses around environmental issues instead of just hiring someone to do the work.

“People viewed the concept of an environmental incubator with skepticism,” Erickson says. “Jim persisted and proved that not only was there a need for incubator assistance at that time and around those issues, but that it was successful. A lot of companies spun out of that.”

About eight years ago, EBC began to shift its focus from clean-up businesses to start-up companies specializing in clean and renewable energy. Since then, working with the California Energy Commission, EBC has helped companies commercialize energy research projects. Erickson says EBC has helped start 30 to 40 companies in this area, and more will be launched soon.

“We had a lot of stuff we’ve been [developing] for a long time that is starting to bear fruit,” he says. “The city of San Jose has a 10-point initiative on clean energy and the environment that we had an awful lot to do with.”

EBC is the largest private clean-energy commercialization center for start-ups in the United States, and its leadership is recognized worldwide. In 2006, EBC was ranked first in clean energy commercialization by a U.K.-based company that had studied 110 facilities around the world for two years. The 24,000-square-foot incubator facility, shared with the Software Business Cluster, houses 25 EBC clients. EBC’s leasable space in the facility fluctuates between 8,000 and 12,000 square feet, based on client needs.

Next steps

EBC now is developing the Electronic Transportation Development Center, where emerging and established Silicon Valley companies can collaborate on the design and development – including prototype fabrication and technology licensing – of clean energy hybrid commercial vehicles. ETDC will employ Silicon Valley electronic technology to make these trucks and buses cleaner, safer and more secure.

Though not its only focus, ETDC will be a primary focus for EBC for the foreseeable future, given the numerous opportunities in this area. “We haven’t even scratched the surface yet,” Robbins says.

The ETDC project recognizes that change isn’t dependent solely on technological breakthroughs, he says. Sometimes, it’s dependent on taking old technology and using it in a different way.

Erickson says one client is building retrofit kits to easily convert vehicles from gas-consumers to hybrid or plug-in hybrids. The kits, probably available in 2009, could benefit the country’s first-responders – firemen, police, EMTs and others – who have standard vehicles in service and don’t have the funds to buy new vehicles.

“There are millions of them in service, and they can’t immediately go away,” Erickson says.

New technology won’t solve all the problems created by our oil-based culture. Erickson says there are human factors that must change, too, and those changes won’t occur without a “driving force.”

Whatever that driving force might be, EBC is dedicated to working across the entire scope of environmental problems. As always, it will do that while helping ensure start-ups will be profitable.

“Our entire history has been focused on encouraging entrepreneurs to become involved in these things and make some money on it,” Robbins says.

“We are very focused on the business side of a company’s success. We try to stay away from being enamored of their science and focus on what we need to do to help them be successful in the marketplace.”

Environmental Business Cluster

2 N First Street
4th Floor
San Jose, CA 08302
www.environmentalcluster.org

Year established: 1994

Incubator size: 24,000 square feet shared with Software Business Cluster (The leasable square footage at EBC fluctuates between 8,000 and 12,000 square feet, based on client needs.)

Focus: Clean technology and environmental products

Incubator clients: 25

Incubator graduates: 120

Organizational structure: partnership between the city of San Jose and San Jose State University.

Mission: To help get environmental technology into the market and to assist with the development of new businesses that will have a positive impact on the environment

Goals:

  1. To commercialize environmental technology
  2. To create clean-technology jobs
  3. To stimulate new business formation in the environmental sector
  4. To help environmental companies accelerate their growth and improve their chances for success

Keywords: best practices, green entrepreneurship, technology incubator

Contact NBIA

Phone: (740) 593-4331
Fax: (740) 593-1996
PO Box 959
Athens, OH 45701-1565
info@nbia.org