Silicon Valley North #9 July'99

The Way I See Itů by Michael Volker

Fuel Cell Technology may be the next IC Technology

The Integrated Circuit (IC) microprocessor was born in 1971 in Silicon Valley South and with it an entire industry evolved. The wealth created in the Valley and the profound impact of IC technology is second to none except perhaps the IC technology with which we started this century, that is internal combustion.

It's unlikely that many folks had any idea as to the impact that silicon technology would have. Even industry pioneers like Digital's Ken Olsen couldn't imagine the need for a personal computer. For that matter, even Gates once said that 64K of memory should be enough for anyone's needs.

We often look back on economic developments and wishfully muse our lot had we gotten involved in the early days (e.g. I should haveve bought a lot in Whistler or I should have jumped on the internet bandwagon a little earlier).

Many would argue that fuel cell technology holds the potential of replacing the internal combustion engine through new "IC" know-how such as "internal conversion" of energy and "integrated control" systems plus countless ancillary components and devices.

A local group of industry, business, government and academic leaders envisage a different form of IC - an "industry cluster". Although Ballard is the Intel of the fuel cell industry, others like ASA of Sydney, BC, a maker of fuel cell test stations or Questor, a producer of oxygenation systems, are getting into the game. Companies like Statpower who have been producing electrical converters for many years are now developing inverters for low power fuel cell applications.

At May's Vancouver Enterprise Forum event, this group - the Fuel Cell Implementation Task Force - advocated the formation of a new organization, Fuel Cells Canada (FCC), to provide services and support to corporations, institutions, and businesses developing fuel cell and related products. Industry champions Denis Connor (Questor) and Kip Smith (Ballard) suggested that
FCC adopt the CANARIE model (instrumental in developing our information highway) in order to fund new developments.

FCC proposes a budget of $26 million (funded largely by government) over 5 years to complement an additional 5-year $30 million request by the National Research Council for its "National Fuel Cell Innovation Partnership" led by Des Mullan, NRC's fuel cell evangelist. If $10 million creates more companies like Ballard whose market value is over $4 Billion, that shouldn't be a hard sell.

FCC plans to use the bulk of its budget to support demonstration projects. This is a superb mechanism for catalyzing new entrepreneurial initiatives. It will engage entrepreneurs from industry and academia in the passionate pursuit of invention and innovation. Working hands-on with specific projects will create not only fuel-cell related enterprises but numerous technology spin-offs. When John Kennedy defined a demonstration project - putting a man on the moon - it created an enormous wealth of new technology, even before the advent of microcomputers.  Such projects get the creative juices flowing.

As Kip Smith so aptly stated, "Successful ventures don't happen because of technology - they happen when you get a group of passionate, committed people working together on a project". The only other ingredient is capital. And that's where we, the taxpayers, need to see some leadership from government in both investing directly in the FCC and creating a positive investment environment (capital gains incentives and investment tax credits) to attract startup funding from the private sector.

The way I see it, fuel cell technology isn't about technology. It's all about new opportunities. As Mike Brown put it, "The question is not if fuel cells will become the next IC industry, it's when. And, it'll be right here in BC".



Michael Volker is a high technology entrepreneur and director of Simon Fraser U's University/Industry Liaison Office. He is a former executive director of the BC Advanced Systems Institute and is chair of the Vancouver Enterprise Forum. He may be reached at mike@risktaker.com.

Copyright, 1999.