HEY GOVERNMENT! GET OUT OF SILICON VALLEY! (Unless You've Got CleanTech Subsidies of Course)

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The government is like that nerd who crashes a high school party. No one has any use for him….until they figure out he’s got a fake ID and can buy the beer.

Despite its liberal leanings, Silicon Valley has always been hostile to government intervention when it comes to business. We don’t ask for bailouts when things go badly and in exchange, we want private equity investing as unregulated as possible. Even the most modest regulation around stock option grants, venture capital or angel investing is met with screams that innovation as we know it will be crushed.

And all of this with very good reason: DC doesn’t understand Silicon Valley and vice-versa. Red tape is antithetical to the nimbleness startups prize as their main competitive advantage, many entrepreneurs and investors don’t even own a suit, and the general belief here is smaller is better, bigger is just a necessary evil that comes with success. You get stuff done in DC by hiring a lobbyist cajole lawmakers. You get stuff done in the Valley by, well, getting stuff done. Even when it comes to fears that the SEC has so horribly bungled the capital markets that companies can’t go public anymore, the Valley still would rather have fewer government restrictions on Wall Street, not more.

But in the corner of Silicon Valley that invests in clean tech….well, it’s all “Come on in, Uncle Sam! Make yourself comfortable! Um…..can we have some subsidies, now?” According to DLA Piper’s annual survey of tech leaders 84% of respondents said they favored tax incentives and other active government involvement in the sector. Simply put: There’s a massive funding gap for some of the largest clean tech opportunities– whether it’s solar energy on every rooftop or a massive grid of electric car charging stations. Just ask Google– a company spending billions of its advertising riches to jumpstart renewable energy markets. Said Curtis Mo, a partner at the law firm that conducted the survey: “The capital requirements and ROI timing for CleanTech are not ideal for the current venture capital model. The infrastructure and financing requirements are massive, often in the hundreds of millions of dollars. Clearly, venture capital will play an important role, but government and alternative forms of private financing will play an equally, if not more, critical role.”

The clock is ticking. Unlike the early days of computers and the Internet when the Valley could dominate at its own pace, CleanTech is a global opportunity and countries like Brazil, China and Germany are already beating the US in many respects. Why? Well, a lot of it is because their governments give them subsidies. With every large market in the world craving cheaper, cleaner energy solutions and plenty of venture money flying around to support innovation wherever it find it, US companies are suddenly at a huge disadvantage. And only an uneasy friendship with Uncle Sam can balance the playing field.

And according to the survey, a lot is riding on such a detente. Respondents listed CleanTech as one of the most promising areas for tech growth. Without any help? The money seeking those opportunities and eventually the jobs that will result from them will flow elsewhere.

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