High level entrepreneurs like Elon Musk, venture capitalists like Peter Thiel and Keith Rabois, and big companies like Oracle and HP Enterprise are all leaving California. during Covid-19, Techs using Zoom are discovering the benefits of working remotely from cheaper, less cluttered communities elsewhere. Although working from home was supposed to be a temporary measure for millions of workers in the early days of the pandemic, there is now no clear end in sight. Almost a year later, workers continue to pull away from city centers as companies constantly move away and rethink the way they do business.
Is this the end of Silicon Valley as we know it? I think so, but the reasons why the Silicon Valley party may soon be overtaken go far beyond the talent drain. One of the most compelling is that the greatest opportunities will no longer lie in the crowded business and consumer internet applications industry. Instead, they will be found in climate technology.
Climate change is the defining crisis of our time and, as it becomes increasingly imminent, our efforts to address it will become the epicenter of the next entrepreneurial revolution. The recent news that Elon Musk is in a duel with Jeff Bezos for the title of richest person in the world is a harbinger of what will be the greatest venture capital opportunity of the 21st century.
Electric vehicles are just the tip of the iceberg. A recent PwC Report found that investment in climate technology grew from $ 418 million per year in 2013 to $ 16.3 billion in 2019, growing five times the rate of the venture capital market over the past seven years . Heating and cooling systems, agriculture, raw materials and manufacturing all need to be reinvented as we strive to create a greener future, creating the promise of even more innovation on the horizon. The climate will also reshape residential and office construction, insurance, finance and agriculture, in terms of where and how food is produced. Massive climate migrations are just beginning; tens or hundreds of millions of people will have to be resettled. Will we give them slums or help them become settlers to build a new and better world? Experience teaches us that the best opportunities arise when companies solve pressing problems for their customers. What could be more urgent than that?
With the innovation needed to turn entire businesses and economies into net zero emissions, there will be more billionaires created over the next two decades than during the internet boom. Besides Musk, many of the climate-stricken billionaires already are outside the United States. Bloomberg recently named a few: Chinese Zeng Yuqun, Huang Shilin, Pei Zhenhua and Li Ping (electric vehicle batteries), Li Zhenguo, Li Chunan, Li Xiyan and Lin Jianhua (solar panels and films) and Wang Chuanfu (electric vehicles); German Aloys Wobben (wind turbines); and the Spanish Jose Manuel Entrecanales (renewable energy production). Silicon Valley entrepreneurs and investors are not leaders in these sectors, but there are still great fortunes to be made.
Venture capital will be essential to commercialize the technologies needed to tackle the climate crisis. Capital follows opportunity; it is not the birthright of any particular industry. Take a look at Chris Sacca, the former head of Google special projects turned investor who built one of the most successful venture capital funds of all time by investing in companies such as Twitter, Twilio, Uber, Instagram and Stripe. His new fund, Lower carbon capital, focuses squarely on the climate opportunity. So far, a minority of its investments have been made in San Francisco or Silicon Valley.
Of course, who gets rich by helping society make the transition to a new energy economy is irrelevant to whether we will mobilize the political will to do so in time to avoid the most dire consequences of the world. climate change – which could, at worst, end civilization as we know it. So far, advocates have tried to motivate this political will with fear, but the presentation of the huge economic opportunity is much more likely to be successful.