Environmental technology

Environmental technology – Growth market and industry of the future

The energy industry is booming: While worldwide market volume reached approximately EUR 1 trillion in 2005, it is expected to grow to EUR 2.2 trillion by 2020, or 5% annually. Environmental technologies are becoming an important part of the economy and a major source of jobs. They are expected to eventually leave traditional industries in the dust, including the automotive and plant engineering sectors.

Green-tech companies are on a critical growth path – Learning from the success of other industries

Companies in the environmental technology sector face major challenges in a dynamic and highly fragmented market. They must:

• Globalize and build global presence and brands while responding to local market trends
• Grow to achieve economies of scale and consolidate
• Finance growth, especially for piloting and launching new initiatives
• Build up pan-European/global networks to develop products and open up markets
• Produce efficiently and reduce time to market
• Set up professional marketing and develop customized product/service solutions

Increasing competitiveness will be the key to successfully tackling pressure to innovate and consolidate. Roland Berger offers a consulting approach that is specially tailored to the environmental technology sector. We work with our clients to develop growth strategies and realign organizational structures. We provide M&A support, design marketing and sales strategies and we introduce performance improvement programs.

Public authorities play a key role – The success of the environmental technology industry is based on government regulation

Economic and regulatory frameworks are important features of the environmental technology landscape. For instance, the government can stimulate demand with subsidies, or it can make capital available through special loans. It can also encourage innovation by setting ambitious environmental objectives.

The main challenge for politics is to align the demands of companies and the market by promoting technology as efficiently as possible.

From an industry perspective, politics must meet the following requirements:

• Set clear environmental targets and support dynamic corporate innovation
• Simplify subsidies – Base support more on product marketability
• Finance reference projects that can serve as examples for others. Provide systematic growth finance to help launch innovative technologies
• Public tender processes should favor innovation and be based on environmental policy objectives
• Export environmental approaches
• Improve coordination between national governments and European institutions

Together with our clients from business and politics, we develop specific courses of action to achieve growth-oriented targets.

In a project for Germany's Ministry for the Environment, we looked at environmental protection as a business driver. We also analyzed the country's key markets for environmental technology. Based on interviews with 120 companies, we were able to identify:

• Market size and projections by 2020
• Main industry trends in all key markets
• Competitive landscape and positioning of Germany and Europe

We also identified key areas for political action. Based on a lifecycle oriented approach, we designed tools that governments can apply in regulatory processes to stimulate innovation and economic growth.
In addition, we designed an "Atlas of environmental technologies for Germany". This book presents technology and market trends in six key markets, which were identified using data from an online survey with 1,500 participating companies.

Examination of the European environmental industry

For Germany's Federal Ministry for the Environment, we examined the European environmental industry. We first looked at current market volumes in Europe and determined Europe's competitive position. We then forecast future levels of growth for the environmental technology sector.

Next, we took a closer look at ten specific environmental technologies. We asked 80 leading companies from over 15 European countries to share their view of the market and the competitive situation. We also asked them what they considered to be the key political tools for promoting innovation and what the critical success factors are. Based on the results of this survey, we made a series of recommendations for governments, including what they should be doing to promote innovation, and what form effective environmental regulation in Europe and the world could take.

Besides our work for government authorities, we have worked for many leading national and international companies in the environmental industry. These have included waste management companies, energy and waste management manufacturers, recycling service providers, thermal power generation producers and manufacturers of environmental protection technology.

Our project work with these clients has included:

• Analyzing the ecological efficiency of carpet fibers
• Developing an environmental marketing strategy
• Analyzing the market for fuel cells or wood waste
• Setting up a fund for renewable energy and energy efficiency
• Strategically optimizing business units and analyzing environmental technology markets in CEE
• Developing a recycling system and capitalizing on recycling-related business opportunities
• Designing a business plan for an international knowledge transfer center for environmental technologies