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New paper in Nature Energy explores the patenting and business outcomes for cleantech startups funded by the U.S. Advanced Research Projects Agency-Energy

last modified Sep 20, 2020 10:02 AM

Nature Energy published a research article by Anna Goldstein, Claudia Doblinger, Erin Baker and C-EENRG fellow Laura Diaz Anadon on the patenting and business outcomes for cleantech startups funded by the United States' Advanced Research Projects Agency-Energy. 

Innovation in clean energy and clean technologies more broadly is underfunded by the private sector. Although the potential benefits of public spending are high, the most effective ways for governments to stimulate innovation and improve the cost and performance of clean technologies remain uncertain. The US Advanced Research Projects Agency – Energy (ARPA-E) operates a high-risk high-reward funding style that has been associated elsewhere with well-known successes in defence. Since 2009, ARPA-E has provided research teams in universities, industry and national labs with roughly US$3 billion total in research and development (R&D) funding as well as access to expert technical guidance and business mentorship. These interventions may be especially impactful for startups, which are more agile than large firms and often faster to develop new technologies but are also cash-constrained and more likely to go under. ARPA-E’s funding model is being considered internationally for scale-up in the context of the energy transition. As such, evidence of ARPA-E’s impact is needed to inform governments’ clean energy spending.

In this paper, authors find that startups that received funding from ARPA-E in its first year of operation filed twice the number of patents in subsequent years compared to other similar firms without ARPA-E funding. This was true even when accounting for the age of the firm, its cleantech sub-sector (for example, energy efficiency or energy storage), and its pre-2010 patenting and venture capital (VC) financing. ARPA-E is therefore either directly enhancing the ability of awardees to innovate and/or selecting highly innovative firms to receive non-dilutive cash and other forms of support. ARPA-E startups also had better business outcomes, including VC fundraising, survival and being acquired or going public, compared to firms that applied for ARPA-E funding in 2010 and were ‘encouraged’ by ARPA-E but not ultimately funded. However, ARPA-E startups did not have better business outcomes than the larger pool of US cleantech startups that did not apply for ARPA-E funds.

Read the paper: Goldstein, A. P., Doblinger, C., Baker, E., Anadon, L. D. (2020). Patenting and business outcomes for cleantech startups funded by ARPA-E. Nature Energy.

Policy brief of the paper is also out in Nature Energy and can be downloaded here.

News item @ University of Cambridge Research News: ARPA-type funding gives green technology an ‘innovation advantage’, study finds

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