Why Small Manufacturers Are Going Green

As a maker of conveyor systems for manufacturers, Shuttleworth always changed with the times. The 100-employee Huntington (Ind.) company's strong business in electronics dropped off about five years ago as more production moved overseas. After that, the company focused on conveyors for food, health care, automotive, and paper products—until this year, when it entered what could be its most profitable niche yet: solar panels.

"It's got some of the biggest potential of the markets we've been in," says Jim Bonahoom, Shuttleworth's vice-president for finance. Even though Shuttleworth only just entered the market, the company expects solar to account for one-fifth of its roughly $20 million in revenue this year, Bonahoom says.

The green movement has become increasingly mainstream in the small business world (BusinessWeek SmallBiz, Summer 2006) in recent years as small consumer companies have embraced environmental principles to address shoppers' concerns about climate change. Now small manufacturers like Shuttleworth are also betting on growth in green industries. Market researcher Clean Edge predicts that making and installing solar power systems will grow from a $20 billion to a $74 billion industry globally in the next decade, and the firm expects wind power installations to grow from $30 billion to $83 billion. Clean energy advocates envision a sea change on the scale of a "low-carbon industrial revolution," as a recent Deutsche Bank (DB) report called it, to halve carbon emissions by 2050.

New Frontier for Manufacturers

Both presidential candidates have proposed caps on carbon emissions. Barack Obama has called for $150 billion investment in clean energy technology over the next decade; John McCain has pledged $2 billion annually toward advancing clean coal, among other initiatives. Policymakers also hold out clean energy as a panacea for America's troubled manufacturing sector, which have shed 3.7 million jobs in the past decade, or more than 20% of its workforce, according to the Bureau of Labor Statistics.

A September report by the Center for American Progress, a progressive think tank, calls for an economic stimulus plan that would create 2 million green-collar jobs through $100 billion in tax credits and direct investment. Van Jones, a senior fellow at the center and author of The Green Collar Economy, says small businesses that offer ways to use less energy and produce it more cleanly could grow fast. For example, construction firms can focus on retrofitting buildings to be more efficient, and manufacturers can supply components for renewable power sources. "Wind in particular has some features that make building stuff here smart, because [facilities are] heavy," Jones says. "The towers are 20 tons of steel. The turbines are made of 8,000 parts."

One entrepreneur ready to create such green-collar jobs is Richard Wheat, president of Eagle Hoist in Louisville, Ky. The company makes heavy-duty lifts to move people and materials at high-rise construction and industrial sites. A wind farm developer asked him eight months ago to design a hoist that could fit inside wind turbine towers, so technicians don't have to climb 20 stories—with their tools—to get to the top.

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