An auto R&D approach Ontario would be wise to follow
The Detroit Free Press has a story about NextEnergy Corp. (Not to be confused with the Elmira, Ont.-based geothermal company of the same name), a non-profit R&D incubator that focuses exclusively on alternative fuels and other energy sources. This article offers a great overview of what NextEnergy is all about, and how Michigan set up the centre to make sure it’s on the leading edge of new automotive and alternative fuel technologies.
I wrote about NextEnergy in the Toronto Star in February, 2005, and while I don’t have a link to that story I’ll quote from a few graphs:
Perhaps it’s time we look across the border to Michigan for a wake-up call. Three years ago, the state funded the creation of a non-profit corporation called NextEnergy to “advance Michigan as a leader in alternative energy.”
In May it will open its NextEnergy Center, a 45,000-square-foot facility in downtown Detroit dedicated to research and development, product testing and demonstration, and public education of alternative fuels and energy infrastructures. A major driver is the protection of Michigan’s auto sector, which — like Ontario — risks falling behind Asian and European countries in the trend toward cleaner vehicles.
“When you look at what the Japanese are doing on their progress in hybrid technology, I’m very concerned about Michigan,” NextEnergy chief executive James Croce recently told me.
To stimulate investment and innovation in Michigan, the NextEnergy Center has been designated an “Alternative Energy Renaissance Zone,” meaning companies that operate there don’t pay property or small business taxes and no municipal income tax is charged to employees. This exemption is guaranteed for 20 years. State income taxes still hit employees, but that money is credited back to the company for re-investment in technology development.
Croce said he already has commitments that will fill two-thirds of the centre. Preliminary talks are under way with some Canadian companies considering relocating or opening offices in the zone. That means investment and jobs possibly lured away from nearby . . . that’s right, Ontario.
Unless I’m mistaken, Ontario has made little progress 13 months after my article appeared. If the province truly wants to remain the auto manufacturing capital of North America, it better get with the program quickly.
Tyler Hamilton is editor-in-chief of Corporate Knights magazine and a business columnist for the Toronto Star, Canada's largest daily newspaper. In addition to this Clean Break blog, Tyler writes a weekly column of the same name that discusses trends, happenings and innovators in the clean technology and green energy market. This blog is a personal project started in April 2005. It is not an official blog of the newspaper.
March 28th, 2006 at 4:53 pm
I’m not sure that Ontario does any automobile R&D. If they want to continue to be a manufacturing centre the intelligent observer would think that they should hitch their trailer to the surging manufacturers. Just because those companies have headquarters outside the USA doesn’t imply Ontario should be concerned.
Let’s take a look at the NY Times take on GM’s union problem:
http://www.nytimes.com/2006/03/28/business/28jobsbank.html
Can you imagine a worse labour situation for a company with a shrinking market share? GM implosion here we come.