The Only Path to New Wealth Creation in the Future

“Ahead of the Street” Column, by Mitchell Clark, B. Comm.

A while back, I was musing in this column about the kind of long-term economic recovery we need that would foster new innovation and new wealth creation. Back in September I wrote, “…the only way we can outperform (in the global economic landscape) is if we turn the table around and manufacture goods at home that we can sell to China. The industry that stands out where we can lead is alternative energy. Innovation in alternative energy and the green economy is the only way we can achieve substantial new wealth creation over the coming decades. It’s likely the price of a barrel of oil won’t let us consider any other option.”

One of the most interesting small-cap companies out there is a firm called A-Power Energy Generation Systems Ltd. (NASDAQ/APWR). I’ve written about this company a number of times in this column and this U.S.-listed Chinese stock operates a number of energy-generation-related businesses.

Recently, this company announced that it would be one of the lead suppliers of wind turbines to a new wind power project in Texas that is expected to be one of the biggest alternative energy developments in the country.

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According to A-Power, the 36,000-acre wind farm will be able to light up 180,000 homes and the total investment will be some $1.5 billion. A lot of the financing is to be provided by Chinese banks.

So, in the global world of business, U.S./Chinese partnerships on big alternative energy projects have real potential to catch a new wave of innovation and spending in the so-called green economy. In this case, U.S. engineering meets Chinese financing. It’s a great idea and we’re likely to see many more of these kinds of projects spring up in “high wind” areas throughout the country.

What we are not able to do is manufacture components as cheaply as they can in China. What we are able to do, however, is manufacture and sell the technical and execution expertise to make projects like this work.

It’s an exciting time if you’re in the large-scale wind power business. Perhaps this is why the one professional trade that’s in highest demand is that of a windmill repairman. The shift towards what many call the “new” economy is the only path to new wealth creation in the future.