Smart grid research: Where the jobs are (and where they will be next)
By: SGN Staff
By Marcy Lowe
When Duke researcher Marcy Lowe asked me to preview and comment on her just-released study (see below), I was so intrigued by the findings that I invited her to write a brief guest post. You will find her six most important findings summarized below. If you have time, download and read the full report as well. I think you will be fascinated to learn which regions are winning the race for smart grid jobs. You'll find some of the usual suspects (yes... California). But you may be surprised by some of the other smart grid hot spots. - Jesse Berst
Jesse Berst is the chief analyst of Smart Grid News
The United States is among the global leaders in smart grid development, which is expected to create tens of thousands of U.S. jobs annually in coming years. In this report, we focus on vendors, examining 125 leading smart grid firms to assess their potential role in creating jobs.
1) Our sample identifies 334 relevant U.S. employee locations spread across 39 states. These include 70 sites for hardware manufacturing, 76 for hardware development, 63 for software development and services and 125 company headquarters. Based on levels of investment to date, we estimate that the U.S. supplier segment alone â€" which does not include utility jobs â€" has so far created roughly 17,000 U.S. jobs.
2) Smart grid provides a way for well-established firms to transition from traditional products into new areas, including new manufacturing opportunities. For decades, a number of U.S. firms provided equipment for the power industry, but performed the manufacturing increasingly outside the United States. Many of these firms are now transforming from a device-only focus to new products including software, smart controls and communications. These new activities are largely performed domestically.
3) The fast-growing global market for smart grid technologies presents valuable export opportunities for U.S. firms, large and small. Smart grid, renewable energy and electric vehicles are counted among the most promising sectors for increasing exports in the National Export Initiative â€" the federal government’s goal, announced in 2010, of doubling the nation’s exports in five years. Industry leaders such as Cisco, GE, Hewlett Packard and IBM are moving quickly into China’s smart grid market. Much smaller U.S. firms have also won large contracts in China and Europe.
4) Future U.S. job creation by vendors will likely concentrate in high-value IT innovations, product development and systems design and engineering. Many of the world’s leading smart grid vendor firms are either headquartered in the United States or have an extensive U.S. presence. A number of large and small U.S. firms are also pursuing breakthrough innovations in hardware â€" especially those associated with renewable power, energy storage or electric vehicles. These activities are often performed in domestic facilities to protect intellectual property.
5) Others are catching up quickly, so the United States will need to continue emphasizing not just innovation but also supportive policies. Chinese, Korean, Japanese and Indian firms have reached U.S. levels or surpassed them in selected innovative technologies, such as high-voltage transmission. Perhaps more important, several countries’ smart grid goals reflect energy policies not currently emphasized in the United States, including aggressive targets for renewable energy. Similarly ambitious targets in the United States would increase demand for U.S. smart grid firms’ products and encourage investment in related clean tech innovations.
6) Regardless of where smart grid products are made, many additional U.S. smart grid jobs will be located in the service territories of participating utilities, which means they cannot be off-shored. These will include jobs not covered in this study, such as direct employment with utilities, contractors and temporary field offices, engaged in performing construction, installation, maintenance and ongoing services. By definition, these will be local jobs.
Marcy Lowe is a senior research analyst at the Center on Globalization, Governance & Competitiveness at Duke University. Her research applies a global value chain framework to analyzing U.S. job growth and technology leadership in clean energy.
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