Masdar City: Not a showcase, but an ‘Entrepreneurial Eco-system’

Here is an article I wrote for Dinar Standard. Check out this new publication that aims to discuss business issues in the Muslim world.

Masdar City: Not a showcase, but an ‘Entrepreneurial Eco-system’

By Bilal Zuberi, Ph.D. , Guest Contributor
Co-founder, GEO2 Technologies, Inc.
Posted Apr 8, 2008


The world today runs on fossil fuel. Our food, water, transportation, and quality of life are all dependent on fuel that is primarily concentrated in a few geographic regions. Middle East has been endowed with vast reserves of oil and gas which have been the primary source of the economy of the region for the past few decades. It is estimated that in 2007 the world consumed greater than 446 quadrillion BTUs of energy (EIA estimates), more than 85% of which came from fossil fuels. This natural resource has brought a boom to Middle East economies. With oil prices above $100 per barrel, Abu Dhabi for example collects oil revenue greater than $200 million a day, giving it the 2nd highest GDP in the region (after Qatar).


Image source: http://www.masdaruae.com

But here’s a problem that all smart policy-makers in the oil producing countries are faced with: not only are their oil reserves expected to eventually run out (EIA estimates peak oil to be reached in year 2037), but they face also a mounting awareness around the world of the negative impact of continued dependence on fossil fuel. The 446 quadrillion BTUs of energy used to fuel the global economy also generated approximately 26,000 million metric tons of CO2, a greenhouse gas that is considered to be the primary culprit of global climate change. (Abu Dhabi is estimated to have a CO2 emissions intensity of 34 metric tons per capita, compared to a global average of 4.3 metric tons per capita. Source: EIA).

Global warming would bring a disruption of geological, climate and natural cycles that would put the lives of billions of people at risk due to changes in land temperatures, sea-water levels, rainfall patterns, biodiversity erosion, agricultural decline, spread of infectious diseases, and increased intensity of extreme weather events. It has become obvious that our fragile earth cannot continue to depend on fossil fuels and sooner or later, a sustainable energy source must be found.

Abu Dhabi is estimated to have a CO2 emissions intensity of 34 metric tons per capita, compared to a global average of 4.3 metric tons per capita. Source: EIA”

Image: http://www.abudhabi.ms

So what is a country that is dependant on extracting value from oil and gas to do? Abu Dhabi, it seems, has found a path towards a sustainable and profitable future. The Masdar Initiative is Abu Dhabi’s way of investing in their future, experimenting with technology and business innovations that can lend to a sustainable way of living for its residents, and for the rest of the world.

Masdar City: World’s First Zero-Carbon, Zero-Waste, Car-Free City

The word ‘Masdar’ means ‘Source’ in Arabic. Masdar City is an impressively planned and funded ‘green’ city, to be constructed near the airport in Abu Dhabi. Designed and managed by the Abu Dhabi Future Energy Company and in collaboration with the Worldwide Fund for Nature, it will be the world’s first zero-carbon, zero-waste, car-free city. Masdar will cover an area of roughly 6 square kilometers and will eventually be home to approximately 1500 businesses and 50,000 residents. At the inaugural World Future Energy Summit, the Crown Prince of Abu Dhabi announced US$15 billion in initial investment through the Masdar Initiative in projects targeting solar, wind and hydrogen power; carbon reduction and management; sustainable development; education; manufacturing; and research and development.

The vision behind this unprecedented effort is based on ten broad-based principles of sustainable living, and on a desire to make Abu Dhabi a hotbed for innovation in energy, environment, water and sustainability – resources that are bound to be scarce in the future.

The ten principals are (1) zero CO2 emissions, (2) zero waste, (3) sustainable transportation, (4) use of eco-conscious materials, (5) sustainable food supply, (6) sustainable water, (7) protection of habitats and wildlife, (8) integration of local culture and heritage, (9) equity and fair trade, and (10) overall health and happiness of its residents.

Hope for an ‘Entrepreneurial Eco-System’

As I try to envision the success that Masdar aims to achieve, I find myself asking what could truly differentiate this initiative from any other mega initiatives that are being contemplated in the Middle East region – there are large projects being planned in a few other Middle Eastern states such as Saudi Arabia, Bahrain, Jordan etc. The thought that comes to my mind is the building of a sustainable ‘entrepreneurial eco-system’, an idea that is novel to most sustainability projects around the world.

I hope that Masdar City will not just be a show-case for energy technologies and environmentally prudent creative or far-reaching ideas, but that it will cultivate an eco-system that will give birth to technology, business and policy innovations that can be implemented not just in Abu Dhabi, but across the world. If it succeeds in doing so, Masdar City will not become known as a flashy project borne out of a state flush with cash, but as the Mecca of sustainability innovations that fueled the future.

The difference between the new cleantech revolution that we are witnessing today, and the environmental movements of the past is that it is (a) market driven and not regulatory-driven, (b) proactive in finding solutions and not reactive and (c) is interdisciplinary and not engineering oriented. The vision of the founders of Masdar City is well aligned to encourage flag bearers of this movement to find a home in Abu Dhabi. Masdar City needs to host, sustain and invest in the entrepreneurial mindset of this movement that not only strives to achieve product and operational excellence but also thinks big and bold for the region and at a global scale.


Artist Rendering of Masdar City
Image source: http://www.masdaruae.com

Ingredients for an ‘Entrepreneurial Eco-System’

So what are some of the ingredients that Masdar City might need to inject to develop such an ‘eco-system’ that will cultivate a ‘gene-pool’ of excellence in energy and related industries? Here are some thoughts:

Education and research: Masdar is already in discussions with various internationally recognized institutions to attract the best of the best to the region and have them develop local talent. The Masdar Institute is a non-profit, independent entity established with the assistance of my alma-mater Massachusetts Institute of Technology (MIT) to assist in graduate research and education.

Investment in innovation: I purposely place this separate from research because an eco-system such as Masdar City needs to encourage innovations that are practical, affordable and quickly deployable to make rapid improvements in our global negative environmental footprint. The success of Masdar City will not only be when all the hand-picked residents of this transportation island will be using electric-transportation, but when such technologies will become affordable for the billion+ people who currently use polluting motorcycles and mopeds.

Stake-holder participation: While the planning of a city is often a government enterprise, Masdar is not expected to be an ordinary city. Masdar should try to seek input from experts in the various fields, including stakeholders who have long term interest in Masdar’s success. These stakeholders include not only those who will reside within the limits and be a part of this giant experiment, but they include the innovators, entrepreneurs, policy-makers, private investors, and the audience that will be closely watching if the Masdar City projects will deliver on the promise.

Equity for the local entrepreneurs: According to a McKinsey report, while the region is flush with cash, weak capital markets and an inability to assess risk leads to a lack of investment in small and medium sized businesses. This sector is typically the engine of innovation, economic growth, and stability. For example, 40% of US GDP growth has come from this sector in the past. Can the small guy with a crazy idea make it big by utilizing the resources that Masdar has to offer?

Supporting innovations stuck in the ‘Valley of Death’: Clean-tech is ultimately an expensive business that requires capital to scale and become competitive with incumbent technologies. Masdar City has the financial muscle to take innovative solutions through the ‘Valley of Death’, allowing innovations to develop economies of scale before reaching profitability. The Masdar Cleantech Fund, a $250 million diversified VC fund is one vehicle already in place to promote such an effort.

Infrastructure development: The city, no doubt, can and will be truly worth visiting and admiring for its wow-factor. But I hope it will go further and demonstrate how such infrastructural designs can be implemented in cities across the globe. Can Masdar show how to make hydrogen-fueled transport infrastructure economically attractive even for developing parts of the world? How should crowded cities with terrible infrastructure move their people using mass transit programs? How can precious water resources be transported, conserved and recycled?

Building local, regional and global markets: Entrepreneurship relies on quick market feedback, brand development and management of total risk. Development of local and regional markets, in addition to support of projects with a global view, is as important to the clean-tech industry as any other disruptive technology-based industry.

Positioned as the Global Center of Next Generation Energy Industry

Masdar City is an ambitious project but there could not have been a better time for such bold vision to be implemented. Masdar’s visionaries expect to nurture technological excellence, drive innovations, support an industrial infrastructure that leverages cheap energy inputs to reach scale, and then invest globally in the resulting breakthroughs to deliver long-term growth and leadership. If done right, no better game-plan for securing the future of Abu Dhabi could have been penned.

From renewable energy generation (such as solar, waste to energy and hydrogen) to energy distribution and consumption (transport efficiency and building design) and to energy intensive chemicals industries and CO2 abatement – there is tremendous room for defining the future of the world. In the future, fuels such as solar, wind, hydro etc but may be available world wide, but Abu Dhabi is positioning itself as the center of the next generation energy industry. And with Masdar it will be possible for it to do so with a carbon footprint that is as white as the color of the dresses that its local wear.

Key Learnings:

Masdar City is being planned as the ‘greenest’ city in the world. Covering an area of 6 sq kms, it will host 1500+ businesses and 50,000+ residents in a zero-carbon, zero-waste, no car environment.

Technical and business innovations emerging from Masdar are expected to not just promote sustainable living within Abu Dhabi , but will also position Abu Dhabi as the future center of the energy industry for the entire world.
The Masdar Initiative will be considered a success not if it brings a showcase to the world for what can be done with a lot of money, but if it allows an entrepreneurial eco-system for clean energy, water and sustainable living to develop and thrive.

————————————————————–

Bilal in his office

Dr. Bilal Zuberi is a co-founder and VP Product development at GEO2 Technologies, a Boston-area materials science clean tech company developing and commercializing high porosity high temperature ceramic materials for automotive emission control and novel chemical reactor systems. Prior to joining GEO2, Bilal Zuberi was a consultant in the Boston office of The Boston Consulting Group,.. He has a Ph.D. in Physical Chemistry from MIT. Dr. Zuberi has been an advisor and consultant to private investors, venture capitalists and entrepreneurs in clean tech, esp. engine technologies, solar thermal, and thermo-electric materials.. He also maintains an online blog on related issues at BZnotes.wordpress.com. He is married to Dr. Lama Rimawi, a fellow MIT alum from Palestine/Jordan and a pediatrician, and lives in Cambridge (MA), USA

Here is a video on Masdar:

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2 Responses to Masdar City: Not a showcase, but an ‘Entrepreneurial Eco-system’

  1. Hanen says:

    I wish we could all become car free. Really great blog.

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  2. […] City: Not a showcase, but an ???Entrepreneurial Eco-system?? By Bilal Zuberi, Ph.D. , Guest Contribhttps://bznotes.wordpress.com/2008/04/10/masdar-city-not-a-showcase-but-an-%e2%80%98entrepreneurial-e…GE loss fuels talk of break-up International Herald TribuneSome analysts and investors are […]

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