A critical network for energy innovation
Most Minnesotans have heard of Minnesota Medical Alley, which is widely recognized as one of the most dynamic and successful medical technology clusters in the world. More than 1,000 companies, organizations, and institutions are involved and provide networking opportunities, educational resources, and advocacy services to help its members succeed in a highly competitive and constantly evolving industry. The organization works closely with its members to foster collaboration and innovation, and to promote the region as a global leader in medical technology and healthcare innovation.
This same kind of collaborative collective is necessary for Minnesota’s cleantech innovators. Cleantech includes a wide range of industries and technologies, including (but not limited to) renewable energy (such as solar, wind, and hydropower), energy storage, clean transportation (such as electric cars and bicycles), waste management and water treatment.
Innovation in the cleantech industry is necessary for Minnesota to meet its 100% clean energy by 2040 standard set by the Minnesota Legislature this year. Just as necessary is a space for these early-stage startups and innovators to learn, grow and scale up.
Minnesota stands to compete for and attract an unprecedented level of federal and private energy-related funding with major investments anticipated in the next 18 months. Capturing the full economic opportunity of this unprecedented moment will take collaboration, investment, and the ambition to make Minnesota a regional and global leader in energy and cleantech. We know that states with startup and pilot programs will be most competitive for securing large investments. Minnesota Energy Alley will serve as a crucial step between research and development and deployment of technologies – making Minnesota more attractive for venture capital.
Grid Catalyst Founder, Nina Axelson says, “There is urgency in this opportunity. Other states are lining up to compete for new business and jobs. To be hesitant now hands other regions the opportunity to sell us technology that Minnesota could have developed. Failure to act means missing out on a generation’s worth of economic development.”
Global investment in energy transition last year totaled $755 billion, according to BloombergNEF. Within weeks of signing the Inflation Reduction Act, nearly $28 billion in new manufacturing investment was announced for new US and North American facilities for electric vehicles, charging, and battery storage. These private dollars are flowing to areas with innovation ecosystems with opportunities to pilot and deploy, and this program could make Minnesota one of the areas capturing those dollars.
Similar ventures to expand startup and innovation programming have produced impressive results. For example, Vertue Lab in Oregon was initiated with $6 million in state funding. After a decade of programming, over 450 jobs have been created and they have secured $230 million in follow-on funding. Which means $38 of private investment generated for every dollar of the initial state investment.
Benefits for startups in energy alley
Early-stage startups need good networks to work with for several reasons:
- Access to funding: Strong connections can help startups connect with potential investors, such as venture capitalists and angel investors. This can be crucial for startups that need funding to develop their products or services.
- Mentorship and guidance: Experienced entrepreneurs and industry professionals can provide valuable mentorship and guidance to early-stage startups, helping them navigate challenges and make informed decisions.
- Business development: Established connections can provide startups with access to potential partners, customers, and suppliers, which can help them grow their business and reach new markets.
- Recruitment: These connections can also help startups attract talented employees and build a strong team, which is crucial for the success of any early-stage venture.
- Validation and credibility: By being associated with reputable organizations and individuals, startups can gain validation and credibility in the eyes of potential investors, customers, and partners.
Vessyll is an energy startup building a clean energy storage device out of St. Paul, Minnesota is one of the businesses that would benefit from these connections. CEO and co-founder Zahra Hargens says, “For us, a program like Minnesota Energy Alley would make a significant difference in providing us the connections and resources uniquely designed for energy startups. In the absence of this funding and targeted programming, businesses like ours are not set up to succeed based on merit, this means it may take many years longer to enter the market if we make it at all.”
Overall, reliable and structured networks can provide startups with a wide range of benefits, and can be a crucial factor in their success. By building strong relationships and connections with others in their industry, startups can access the resources and support they need to thrive and grow.
Benefits of cleantech innovation for Minnesota
Cleantech innovation is essential for economic growth and development, leading to the creation of new products, services, and industries that drive economic growth while reducing greenhouse gas emissions. The cleantech industry in Minnesota has the potential to create new jobs, drive competitiveness, and expand the market for clean energy products.
- Job creation: The development and implementation of new technologies and ideas can create new jobs in the growing clean energy industry.
- Competitiveness: By staying ahead of the curve and continuously improving our cleantech, Minnesota can remain competitive in the global market and attract new businesses, customers and investors.
- Booming industries and markets: Innovation leads to economic growth, new business opportunities and expanded markets across the state and country.
Cleantech innovation is a key driver of economic growth and development, and can lead to a wide range of benefits for Minnesotans in every corner of the state.
The road ahead
Minnesota Energy Alley was funded by the Minnesota Legislature during the 2023 session. A one-time allocation was allotted to make this critical resource a reality.