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					   Innovation              Entrepreneurship




CleanTech in San Jose, Capital of Silicon Valley




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Contents


           1. CleanTech: Key Messages            3
           2. San Jose At A Glance               5
           3. San Jose‘s Integrated Model        6
           4. San Jose‘s CleanTech Sector        7
           5. Key Sub-Sectors for FDI            8
           6. Examples of CleanTech Companies    9
           7. R&D Capabilities                   10
           8. CleanTech Industry Support         11
           9. Industry Support From Government   12
           10. Benchmarking                      13
           11. FDI Opportunities                 21
           12. Success Story                     22
           13. Data Sources                      23


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                                 2
CleanTech: Key Messages
Take Advantage of Silicon Valley’s Unique Environment for Innovation
         # 1 U.S. city for number of patents per million residents: 810 per million residents (WKCI
         2008)
         #1 region for venture capital—more than 500 venture capital and private equity firms
         Among top ten world metropolitan areas for per capita business expenditure on R&D
         globally (WKCI 2008)
         World class research institutions, including Electric Power Research Institute, Stanford
         University, NASA
Access Specialized Human Resources, Cost Effectively
        #1 city in the world for the Centre for International Competitiveness‗ Knowledge
         Competitive Index (WKCI 2008)
        #2 city in the world for Labor Productivity (WKCI 2008)—top city in U.S.
        Sophisticated engineering, technical, manufacturing workforce—San Jose has 250,000+
         technology jobs
        More than 40% of San Jose residents were born outside of the United States; 40% have
         college degrees (compared with 25% U.S. average)
        Real estate prices now at 1999 levels


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                                                 3
 CleanTech: Key Messages
Do Business with CleanTech Companies and Partners in San Jose
         Named ―Best City in U.S. for Clean Tech‖ (Business Week, May 2009)
         Green establishments growing at an annual rate of 33%; Green employment growing at an annual rate
         of 41% (NETSD, 2000 – 2006)
         City is home to more than 3,200 core CleanTech innovation jobs, and 60 companies - one third of
         Silicon Valley total (2009 Index of Silicon Valley & San Jose Business Tax Database)
         Venture capitalists invested $1.8 billion in local CleanTech companies in 2008 (CleanTech Group)

Highly Supportive City Government, Committed to CleanTech
        San Jose‘s ―Green Vision‖: become World Center of Clean Technology Innovation
        Developed the nation's first incubator for start-up environmental companies and the nation's only
         incubator for foreign-owned businesses
        City is early adopter: CleanTech Demonstration Program, Environmentally Preferable Procurement
         Program, 1st Green City Hall in America (LEED Platinum)
        Aggressive advocate for regional, state, and national policy

Sustainable City with Comfortable, Cosmopolitan Life Style
        Consistently ranked among top 3 safest big cities in America (FBI statistics)
        San Jose recycles more waste than any large city in nations, recycling more waste than goes to
         landfills
        #1 US City for Gross Monthly Earnings and Median Household Income (WKCI, 2008)
        San Jose averages over 300 sunny days a year, Mediterranean climate
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San Jose At A Glance


                      10th largest city in U.S.

                      The City Center of Silicon Valley

                      Largest City in Bay Area

                      Population: City 1 million, Metro
                       area 1.8 million

                      Employment: City 370,000, Metro
                       area 890,000

                      Key Sectors: IT/Electronics, Life
                       Sciences, Clean Tech

                      Per Capita GDP: $60,000, 35%
                       above nation (Moody‘s Economy.com
                       2007)


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                                 5
San Jose’s Integrated Model for CleanTech


                                        Prototyping/          Testing/                                 Market
   Research          Incubation                                                    Production
                                       Demonstration        Certification                             Adoption



University of       Environmental      Electronic           Underwriters          Real Estate       Green Vision
California          Business Cluster   Transportation       Laboratory Solar      facilitation      Goals
                                       Development          Testing/Certificati
Stanford            San Jose                                                      CleanTech         City Procurement
                                       Center               on Center
University          BioCenter                                                     Incentives Fund
                                                                                                    One-Stop
                                       City of SJ           SolarTech Center
San Jose            US Market                                                     Workforce         Permitting
                                       Demonstration        of Excellence
State University    Access Center                                                 Development       Innovative
                                       Program
NASA                Venture Capital                                               Grants            Finance
                                       Las Plumas                                 California
Dept of Energy      CleanTech Open     EcoPark                                                      Federal, State
                                                                                  Enterprise Zone
Labs, Livermore,                                                                                    Policy Advocacy
                                       “Solar City”
Sandia
                                       Showcase
California Energy
Commission
National Science
Foundation


                                                                 Workforce development

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                                                        6
    San Jose’s CleanTech Sector


   Thriving, diverse CleanTech Cluster-- Named ―Best City
    in U.S. for Clean Tech‖ (Business Week, May 2009)
   San Jose is home to > 3,200 core Clean tech jobs, 60
    companies; employment doubled last 18 months
   Silicon Valley region has > 10,000 jobs, 150 Green
    Establishments
   30% of US CleanTech VC is invested in areas companies
    – $1.8 billion in 2008, double 2007 level
   City CleanTech Strategy: achieve 25,000 Clean Tech jobs
    by 2022


                                                              San Jose City Hall




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CleanTech: Key Sub-Sectors for FDI

Renewable Energy
         Solar (PV, CIGS, CSP, CPV)
         Fuel Cell
         Storage/distribution
Green Building/Energy efficiency
         Control & monitoring systems
         LED lighting
         Materials
Clean Transportation
        Alternative fuels & vehicles
        Public transit
        Smart infrastructure




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Examples of San Jose’s Innovative CleanTech Companies
   SunPower is the global leader for developing high-efficiency solar solutions for
    homes, businesses, commercial buildings and utilities.
   Philips Lumileds Lighting Company is the world's leading manufacturer of high-
    power LEDs and a pioneer in the use of solid-state lighting solutions for everyday
    purposes including automotive lighting, computer displays, LCD televisions, signage
    and signaling and general lighting
   Echelon is a global leader whose technology enables ―smart‖ energy solutions across
    a wide range of markets, including commercial buildings, industrial plants, schools,
    streetlights, warehouses, electric vehicle charging stations, and smart metering
    infrastructure.
   Nanosolar is a global leader in solar power innovation, leveraging recent science in
    nonstructured materials to profoundly change the cost efficiency and production
    scalability of solar electricity cells and panels.
   Viridis Earth Technologies, winner of the Clean Tech Open ‖Energy Efficiency
    Award‖ for innovation that reduces energy consumption of air conditioners.
   Electra Drive, winner of the ―Transportation Award‖ at the Clean Tech Open, is
    commercializing an invention to enable the mass conversion of existing cars and light
    trucks to electric drive
   Stion Corporation is a solar photovoltaics company developing high-efficiency thin-
    film modules.

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R&D Capabilities

   Electric Power Research Institute conducts research and development relating to the
    generation, delivery and use of electricity for the benefit of the public.
   NASA Ames Research Center is a leader in nanotechnology, biotechnology, aerospace
    and thermal protection systems, and human factors research.
   Bio-Info-Nano R&D Institute (BIN-RDI) With University of California-Santa Cruz, NASA
    is partner in BIN-RDI, which includes the BIN Energy Initiative, a consortium of
    organizations using novel processes and technologies to build realistic, sustainable
    alternatives to hydrocarbon fossil fuels.
   Department of Energy Renewable Energy Labs including Lawrence Livermore
    National Lab, and Sandia National Lab. San Jose is partnered with Sandia as part of
    DOE‘s ―SolarCity‖ initiative.
   Universities in San Jose or nearby include Stanford University, University of California,
    Carnegie Mellon University-West, San Jose State University, Santa Clara University, 5
    Community College Districts
   Corporate R&D capability in organizations like SRI International, IBM, Applied Materials,
    Hewlett Packard, Cypress Semiconductor, Cisco, and Google (clean energy, energy
    efficiency, smart grid)


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    CleanTech Industry Support

San Jose has the largest city-backed new business incubation program in the United States
   The Environmental Business Cluster (EBC) has assisted more than 120 cleantech start-ups in 10 years,
    helping more companies commercialize their products that any other incubator in the nation.
   Other start-up incubator facilities are focused on bioscience links to cleantech (San Jose BioCenter), green
    auto/alternative fuels (Club Auto Sport), and helping international companies access the U.S. Market (U.S.
    Market Access Center)
San Jose is home to key organizations supporting CleanTech
   California CleanTech Open, competition awarding $100,000 prizes to nation‘s most innovative cleantech
    entrepreneurs to help them successfully go to market
   San Jose Prize for Green Vision Innovation complements CleanTech Open by connecting entrepreneurs with
    San Jose‘s world-class incubator programs
   Underwriters Laboratories Solar Testing/Certification Facility, the first and largest solar-testing facility in North
    America, helps speed thee time it takes for companies to bring new products to market
   SolarTech Center of Excellence, a business association growing the solar industry through standards, training,
    financing, and innovation
San Jose provides access to Silicon Valley’s Venture Capital network, including cleantech
    funders like Kleiner, Vantage Point, Mayfield, Sequoia, DFJ, and Menlo. The region is #1 for venture capital
    activity, with more than 500 venture capital and private equity firms



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 Industry Support from Government

City Support Services:
       Site Selection Assistance
       Expedited Permitting Assistance: Special Tenant Improvement Program, Industrial
        Tool Installation Program
       Introduction to venture capitalists, lawyers, CPA‘s, executive search firms, etc.
       Identify potential business partners, subcontractors
City Financial Incentives:
       Workforce Assistance: Access grant funds for training cleantech employees through
        California State and Federal Recovery and Reinvestment Act
       Enterprise Zone: Special incentives to reduce business-operating costs in heart of
        Silicon Valley (hiring tax credit, sales and use tax credit, business expense deduction,
        income tax credit for employees)
       CleanTech Jobs Investment Fund: financial support to assist with capital equipment
        acquisition ($50,000-$500,000)




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Benchmarking – R&D
Location assessment matrix: Electronics R&D (Head Count: 50)




                                                  San Jose has an excellent
                                                  competitive offer for a R&D
                                                  operation.
                                                  It scores higher than all its national
                                                  competitors on a quality side.
                                                  In current economic conditions
                                                  when operating costs in San Jose
                                                  are predicted to fall by 20-30%




                                                                                           Source: fDi Benchmark
                                                  it has never been a better time to
                                                  invest in this world-class location.




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Benchmarking – Manufacturing

Location assessment matrix: Solar panel manufacturing (Head Count: 140)


               San Jose has a very strong
               competitive offer for a solar
               panel manufacturing operation. It
               scores higher than most of its
               national competitors on a quality
               side.
               In current economic conditions
               when operating costs in San
               Jose are predicted to fall by 20-
               30% it has never been a better
               time to invest in this world-class
               location.




                                                                          Source: fDi Benchmark
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Quality Factors: Economy
    Invest in San Jose’s vibrant and knowledge-intensive economy
   With the GDP of around USD 1.8 trillion, California is 7th largest economy in the world ahead of
    Spain, Canada and India
   San Jose‘s GDP per capita of USD $60,000 is over 35% higher than the US average
   San Jose ranks #1 among U.S. cities in knowledge intensity index, which is an indicator of future
    economic potential (only American city in global Top 10)


                                                                Regional Ratio of Knowledge Intensity in 2008,
                                                                               Top 10 Regions

                                                                                                    Index 2008
                                                               Guangdong, China                     2.40

                                                               Israel                               1.82

                                                               Pohjois-Suomi, Finland               1.81

                                                               Kanagawa, Japan                      1.74

                                                               West, Sweden                         1.69

                                                               San Jose-Sunnyvale-Santa Clara, US 1.65

                                                               Tianjin, China                       1.64

                                                               Shiga, Japan                         1.62

                                                               Lansi-Suomi, Finland                 1.54

                                                               Singapore                            1.53


                                                                    Source: World Knowledge Competitiveness Index 2008

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Quality Factors: Human Resources

    Take advantage of San Jose’s international and skillful human resources
   With around 180,000 employees in ICT and Electronics, San Jose has one of the
    highest labor concentrations in USA
   San Jose is one of the most unique international US cities where 40% of the
    population are foreign-born; 50% speak language other than English




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    Quality Factors: R&D
     San Jose has proven capabilities in innovation and R&D
    San Jose is one of the leading FDI regions for R&D. This indicator measures the share of outbound and
     inbound FDI projects in the total number of projects in the last six years
    Two major universities near San Jose (Stanford, University of California) are in the top ten list for R&D
     expenditure. Combined, four major universities* in/near San Jose account for around 3% of total
     academic R&D expenditure in USA
    San Jose ranks #1 nationally, and #3 globally in number of patents per million inhabitants. In 2007, San
     Jose/Silicon Valley accounted for 20% of all green technology patents in California
                                                                                       Academic R&D expenditure –
                                                                                        Top Ten Universities 2006




                                                                                            Source: National Science Foundation

* Stanford University, San Jose State University, University of California-Berkeley and University of California-Santa Cruz
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Quality Factors: Infrastructure
World-class, reliable infrastructure
   To be completed 2010: first major new international airport in 21st century
   San Jose scores the best in the ranking of ―America‘s Most Miserable Airports‖,
    having the least number of flights delays
   San Jose airport is 10 minutes from city center and high-tech company
    concentration
   Downtown San Jose planned for largest intermodal public transit hub in the
    Western U.S., to include high-speed rail


         Percentage of flight delays, 2007




       Source: America‘s Most Miserabel Airports, 2007


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Quality Factors: Quality of Life

                            Enjoy high quality, green living environment
                                    The Mercer report ranks San Jose as a city with a
                                     very high quality of living, scoring ahead of San
                                     Diego, Boston and many other US locations.
                                    Strong environmental values:
                                         San Jose has most solar installations of any
                                          large city in Northern California; 59% increase
                                          between 2007 and 2008
                                         Residents recycle more than any large U.S. city
                                    Extensive recreational and cultural opportunities,
                                     perfect Mediterranean climate
                                    According to the Brookings ranking of the US largest
                                     metropolitan areas by their carbon footprint, the San
                                     Jose area ranks 5th best for average tons of carbon
                                     emitted from residential use




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Cost Factors: Operating costs
   San Jose has relatively high staffing costs, but very high productivity, distinctive skill sets, and flexible
    workforce
   Lease rates are lower than many other major U.S. cities, including Boston, Austin, New York, San
    Diego, and Phoenix.
   Overall operating costs are predicted to decrease by 20-30% in the next year, which will make San
    Jose more cost competitive and allow companies to access leading talent and research capabilities
    for lower operating costs.




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FDI Opportunities in CleanTech Sector

   Joint project/partnership opportunities with local companies specializing in niche
    technologies, potential cross-sector synergy (Microelectronics, Software & Internet-
    related technologies, Life Sciences and Engineering )
   Partnership opportunities with universities and research institutes to take advantage of
    R&D staff (professors, PhD students) and to minimize costs
   Testing operations for new technologies in a location with environmental conscious
    policy-making, public awareness and advanced R&D
   Over 3,200 industry-specific human resources and one of the largest concentrations of
    R&D workforce at competitive costs
   Major infrastructure projects create important investment opportunities:
        San Jose Green City Hall, Green Airport, Green Convention Center
        Energy-saving and climate intervention projects: ―San Jose Green Vision‖
             Receive 100% of electrical power from renewables
             Replace 100% of streetlights with smart zero emission lighting
             Reduce per capita energy use by 50%
             Build or retrofit 50 million square feet of green buildings

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Success Story




Chief Executive Martin Roscheisen said he was attracted to San Jose by its educated
workforce, the City's experience working with high-tech companies and its ability to
streamline the permit process.

"It's clear San Jose knows how to deal with the Cisco‘s and eBay‘s. They understand
the issues, the logistics, the transportation needs," said Nanosolar CEO Martin
Roscheisen, who founded Nanosolar in 2001 with Brian Sager. "And we can get a
permit within a matter of days. Other regions would take several months."

The Mayor of San Jose, the City‘s economic development team, and utility PG&E
played a key role in attracting Nanosolar to San Jose. ―We appreciate the enthusiastic
support and are deeply grateful for the fantastic support provided,‖ said Roscheisen.




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    Data Sources

    World Knowledge Competitiveness Index 2008
    US Census Bureau
    National Establishment Time Series Database
    FBI Statistics
    US Federal Communications Commission
    State of California Employment Development Department
    City of San Jose
    CleanTech Group
    National Venture Capital Association
    fDi MarketsTM (Financial Times)
    fDi BenchmarkTM (Financial Times)
    Forbes Magazine
    PricewaterhouseCooper
    Brookings Institution
    Moody‘s Economy.com

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