Page last updated at 23:02 GMT, Monday, 27 April 2009 00:02 UK

Innovating a way out of recession

BBC correspondent Matthew Price has been travelling across America looking at the effects of the recession on the country. In the last of his reports he talks to businesses in Seattle to find out whether the city might be able to help the US innovate its way out of its economic difficulties.

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Aaron Goldfeder, Evoworx
In the same way people have dropped Hummers in favour of hybrids, people want to be smart with money and energy
Aaron Goldfeder, Evoworx

That is the question that Aaron Goldfeder is trying to help people answer.

"Most car owners are familiar with the miles per gallon of their car," he says.

"People don't know what kilowatt hours their home uses, and even if they did they wouldn't know what it means."

Aaron is one of the founding partners of a firm called Evoworx, and he is part of a new generation of entrepreneurs who might, just might, help transform the US economy.

At their offices in Seattle, which more than many places in the US is associated with environmentally sustainable innovation, Evoworx is aiming to help people retrofit their homes so they waste less energy.

'Model for the US'

They are not the only ones. Up the road you find McKinstry: a firm with the presidential seal of approval.

When he was on the campaign trail, then-Senator Barack Obama singled out McKinstry for praise. It was a model for the US, he said.

The firm does everything to lower clients' energy costs.

"About half the energy we use in America is wasted," says Dean Allen, the company's chief executive.

Half? That is an astonishing amount in a country that consumes as much as the US does.

"When it's free or cheap we tend not to focus on it."

BBC correspondent Matthew Price is travelling across the US, reporting from a new city every day, to assess the state of the economy as President Obama approaches 100 days in office. See the Beyond Wall Street route here.

The problem is how to divert the oil supertanker that is the US economy onto a more sustainable footing.

For many years there was not the political will to change. Now though more people here believe energy sustainability is important, either for the good of the environment, or to reduce America's dependence on foreign imports of oil.

Green initiatives

There is another vital factor too.

It is estimated that around a tenth of Barack Obama's $787bn (£539bn) economic stimulus package will be targeted at green initiatives.

Although many question how much difference that money will make, it still is a big shot in the arm for what some have dubbed "green-collar jobs".

Dean Allen says it's relatively easy to shift people to more energy-efficient vehicles. "People tend to buy a new car every few years, so you can have a radical change of policy in a short time," he says.

It is less easy to reduce energy consumption in our homes.

So the goal is "a really vigorous 10-year focus on creating jobs around energy savings", according to Mr Allen who has been advising the president's energy team.

"We can create a lot of jobs reconfiguring the buildings that exist," and create a new energy efficient economy.

Permanent jobs

You may feel you have heard this all before, but the recession has spurred many to believe that the US is on the verge of a profound change.

Yves Vetter using a pressure gauge
Making homes more energy efficient may create jobs

The renowned economics professor at Columbia University in New York, Joseph Stiglitz, believes the current recession: "will have accelerated the transition" that the US has already been going through.

"Many of the jobs lost won't be regained, that is the big story. The jobs lost in manufacturing are not temporary."

"The economy does need to restructure," he adds. "The energy sector isn't up to the reality of global warming. There is lots of work to be done."

The US has been living a wasteful life for decades. Now may be the time to fix that, and there are plenty who believe there is money to be made in this transformation.

Microsoft was a key driver of economic recovery in Seattle and more generally across the States in the 1980s and 1990s, and its chief research and strategy officer Craig Mundie believes the company can do it again.

"If you look at previous downturns, including the great depression, the companies that fared best in almost every case were those that did two things: they cut costs but also continued to invest heavily in research and development."

That is what Microsoft is doing now.

"Just as the economy is going through a major transformation, so is information technology," says Mr Mundie.

"We're investing across the board, in everything from technologies that help homes and businesses cut their carbon footprint to research projects that we hope will help solve the energy problem on a global scale."

"Over the long term, we're absolutely convinced that computer science will help transform how developed, and in time developing, countries think about and consume energy."

Surely the big factor is whether people change their lifestyles? Back at Evoworx, Aaron Goldfeder believes they will.

"In the same way people have dropped Hummers in favour of hybrids, people want to be smart with money and energy."

The future of the world's richest country may depend on that.


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