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ARPA-E makes the case for business-first government programs

3 min read


New energy technologies and sustainability must prove their business value through efforts such as the Advanced Research Project Agency-Energy, which can “fund efforts that touch the boundaries of current understanding.” That was according to former Wal-Mart Stores CEO Lee Scott, who was joined by other executives and federal officials during Tuesday’s morning sessions of the ARPA-E Energy Innovation Summit.

ARPA-E was first funded in 2009 to, in part, “focus on creative ‘out-of-the-box’ transformational energy research that industry by itself cannot or will not support due to its high risk but where success would provide dramatic benefits for the nation.” Its grants are designed to help promising technologies bridge the gap between the concept phase and the venture capital stage, and it has garnered significant bipartisan support.

Tuesday’s early sessions included executives who have led global economic and sustainability change, congressional advocates for post-oil energy resources, as well as Energy Secretary Steven Chu and ARPA-E Director Arun Majumdar. Wal-Mart’s Scott talked about sustainability being part of core business strategy, driven by a desire to benefit customers. FedEx founder and CEO Fred Smith discussed his company’s push into fuel efficiency through more efficient Boeing airplanes, electric light-duty vehicles and liquefied natural gas over-the-road trucks.

Both leaders, as well as Republicans Rep. Steve Womack and Sen. Lamar Alexander, praised the vital role of ARPA-E funding in helping companies with viable, disruptive technology get over hurdles to commercialization. House Minority Leader Nancy Pelosi praised the potential for ARPA-E and similar efforts to return to a state of “make it in America.”

All of it, in one form or another, came back to making a business case. Scott spent much of his time — first in his speech, then in a mock fireside chat with former Clinton administration official John Podesta and Smith — outlining sustainability efforts throughout the supply chain, product development and marketing. Despite this personal and corporate commitment to sustainability, he emphasized, “I am not an environmentalist.”

Smith, meanwhile, appeared driven to move FedEx’s vehicles off of gasoline because of an aversion to foreign oil. He cited oil markets for helping cause the 2008 financial crises and repeatedly bemoaned the “transfer of wealth” that dependence on foreign oil details, particularly to regimes that do not share the interests of the U.S. Despite an overall dislike of incentives in the tax code, however, Smith praised ARPA-E. “It’s hard to find a more effective thing that the United States government has done than ARPA-E,” he said.

Federal officials joined in the sentiment that business success must be a goal. ARPA-E’s Majumdar noted that low cost and high scale are two crucial criteria for successful grant projects, as compared to the Defense Advanced Research Project Agency, or DARPA, where Majumdar once had a grant and said, perhaps facetiously, “No one at DARPA ever asked, ‘How much does this cost?’ ”

Majumdar and Chu both noted that their goal is not about prejudging projects as “winners” or “losers.” Lithium-ion and other batteries are an area of great recent progress, yet Chu noted that, “If you asked me 10 years ago where I thought batteries were going to be, I would have grossly underestimated the development just in the last few years.”

At ARPA-E, there are often many companies receiving funding for similar goals, and companies will collaborate even while competing. The goal, Majumdar noted in a media conference after his morning keynote, is finding the best solution: “We’re technology-agnostic. Let them compete.”