The VERGE Opportunity in China

We just wrapped up the first of three components of our VERGE conference, and while it's just mid-afternoon in Shanghai, it's well past midnight on the East Coast, so below are a few of the standout moments from the roundtable discussion that took place in Shanghai.

First, let's recap the scene. The discussion took place at the Shanghai Energy Efficiency Center, located in a former auto manufacturing plant that now serves as sort of an R&D hub and houses a dozen energy ventures, including the Shanghai Environment and Energy Exchange, China's first environmental equity exchange.

It was a fitting site for the kickoff of VERGE, the concept we've coined to describe the intersection of building, information, energy and vehicle technologies. VERGE represents what GreenBiz Executive Editor Joel Makower calls one of the next great waves of innovation. The potential scale and opportunity for VERGE innovation in China is mind-boggling, but, like most nations in the world, they've barely scratched the surface.

The larger setting of Shanghai was also appropriate since cities, as several roundtable panelists pointed out, are at the forefront of the VERGE opportunity. Urbanization creates demand as millions of people move from rural to urban lifestyles, according to Jonathan Woetzel, director of McKinsey and Co. in China.

"This creates challenges," he said, "but it also creates solutions as cities are the source of our technical productivity ... when people come together in cities, it creates opportunity and density. Density of human interactions is what creates new technological leaps." 

Here is a glimpse of some of the VERGE opportunities in China:

• Buildings -- Many buildings will turn over and be rebuilt in the next 20 years, while others will need retrofits, both factors that represent prime construction-related opportunities. At the same time, more new and existing clients in China are seeing the value of sustainability and energy efficiency, according to Raymond Lo of Parsons Brinckerhoff. "Even for existing buildings that have been standing for 10 to 20 years, they require upgrades. That's a reality driver," he said. "New clients we are seeing increasingly for branding and marketing purposes."

• Information -- To scale VERGE technologies, we need to bridge the gap between those who have information with those who need it, according to Mark Evans, technical director of Joint US-China Collaboration on Clean Energy (JUCCCE). Everyone must come to the table and contribute to such an effort in what he called Collaboration 2.0. "The best platform for that is online," he said. "This event itself is happening because of online technologies that weren't here five years ago. We need to recognize the unbelievable opportunities we have there."

• Vehicles: Thirty percent of first-time Chinese car buyers, which Woetzel said represents half of the country's population, are interested in buying an electric vehicle. "Half of them will do so because of trendiness," he said. "They perceive it ultimately as a fashion or a value statement. Half of them because they actually believe it is cost-efficient, relative to the risk of rising oil prices."