Washington State Should Flex Software Muscle to Grab Lead in Cleantech, Says Michael Butler

How will President Obama’s proposed economic stimulus package affect the energy and cleantech industry in the Northwest? We’ve been hearing a lot of rumblings on this front lately. To help sort it all out, I spoke with Michael Butler, chairman and CEO of the Seattle investment bank Cascadia Capital, which is heavily involved with energy and sustainable technologies.

In recent weeks, Butler has been working with Marc Cummings of the Pacific Northwest National Laboratory and David Benson of Stoel Rives to put together a private-sector task force, appointed by Gov. Chris Gregoire, to identify the areas that Washington state should focus on. Butler also has some key insights into the role of cleantech in driving innovation and economic growth.

“More than anything, the President and the proposed stimulus package has had a really strong mental aspect,” says Butler. “People in cleantech are more optimistic about their own prospects than others. I attribute that to the election of a President that ‘gets it.’ People in the cleantech industry were pleasantly surprised by the amount of money [proposed]. It’s done a lot to help people’s moods. This year could be a rough year, but the intermediate to long term is bright.”

The question on everyone’s mind is resources. “The biggest challenge is how that money will be allocated. We’re hearing Washington state is expecting to get $6 billion for different projects,” Butler says. “A significant portion will be allocated to cleantech. That will disperse through the state and through the cities. People are thinking, ‘How do I get access to that money?’ People are thinking energy efficiency and smart grid are the big beneficiaries. The other one is solar.”

The first two, at least, should be strengths in the state. “What is important to Washington state is that smart grid and energy efficiency, greater than any other subset of cleantech, involves software. And software is probably what this region is best at,” Butler says. “The moon and stars are aligned.”

For examples of strong local organizations in energy efficiency, Butler points to Paul Allen’s Vulcan, The Schuster Group, McKinstry, Powerit Solutions, Optimum Energy, and Verdiem. As for smart-grid technologies, Butler says, “The core of the infrastructure is materials science, but then at the edges it’s software-based. Where we think we have a competitive advantage is … Next Page »

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Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and Editor of Xconomy Boston. E-mail him at gthuang [at] xconomy.com. Follow @gthuang

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