General Electric and the Carbon Trust have announced a new pan-European partnership to help accelerate clean tech growth in Europe, after evidence emerged that it is struggling to keep up with other parts of the globe.

The Carbon Trust will work with GE to identify and evaluate early stage European clean-tech companies, then incubate and invest in those with the most potential. The partnership will be able to access a £3.1 million incubation fund during the initial 18 month phase.

This incubation fund forms part of the £125 million GE ecomagination Challenge, a global innovation initiative that launched in 2010 to find and fund the best ideas around clean tech technology. To date, GE and partners have committed £85 million for investment and commercial partnerships with start-up companies globally.

A recent GE Innovation Barometer, which polled 2,800 businesses across 22 markets globally, revealed that the majority of UK companies saw innovation as fundamental to the future economic and social health of the UK but sufficient triggers are not in place to encourage it. Almost nine out of ten UK businesses also claim that SMEs and individual entrepreneurs can be as innovative as bigger companies, reinforcing the need for seed funding and support for local innovations and ideas.

Carbon Trust Chief Executive Tom Delay said: “Cleantech has the capacity to be a strong growth driver for Europe given its strong research capability and track record in this area. However, there is increasing evidence that other parts of the world are catching up and overtaking the region. This exciting initiative will accelerate the commercialisation of Europe’s more promising cleantech businesses.”

Over the past five years Europe has seen other parts of the world overtake its global clean energy. According to a recent Bloomberg New Energy Finance report, in 2007 42 percent of the world’s clean energy investment took place in Europe compared to just 25 percent today. During the same period Asia Oceania has almost doubled its share of overall investment.

GE UK Chief Executive, Mark Elborne, commented: “We are increasingly focused on identifying new businesses, technologies and human talent in this area. GE sees the business benefit but also the potential these new technologies offer in delivering overall economic growth and improved resource efficiency.”

Delay concluded: “During a downturn, supporting these businesses becomes doubly important: research studies show that such high growth businesses account for a disproportionate amount of job growth. At the same time, they have a greater need for capital than lower growth businesses and this can be an issue if banks are restrained on lending. Incubation funds such as this one can help.”