Author: Ben Debski

Why wearable tech is not the next big thing

Posted on by Ben Debski

Much excitement is gathering around a wave of products set to launch soon that will bring technology to people’s bodies. Many expect these wearable devices to revolutionise the tech industry, as well as being of serious benefit to other industries not traditionally associated with consumer electronics.

Imagine being able to track your heart rate as you go about your day, check your emails without looking at a computer screen, or see a live stream from the perspective of a friend halfway round the world. All these things are being actively developed by a number of companies are betting on the next generation of must-have electronic gadgets.

While some rumoured products offer a tantalising insight into the future of consumer electronics, the idea that in the not too distant future people will be walking around more or less head to toe in gadgets is somewhat fanciful.

“People are not accustomed to glass you roll up. The ability of people to take it and use it to make a product is limited.”

Designers have been trying to develop technological products that sit as comfortably as an item of clothing for decades, while science fiction writers have been imagining increasingly outlandish gadgets that have whetted the appetites of geeks around the world. From Dick Tracy’s wristwatch radio, to the digital glasses found in Star Trek, people’s imaginations have been captured by technologies that would attach themselves to users’ bodies.

One of the latest products expected to transform this market is Google’s Glass project, announced to the world last year, and entering an “explorer” beta program in the coming months. While the demonstrations Google have showed off of their smart glasses are remarkable, it seems unlikely that people will want the distraction of emails and other information popping up in front of their eyes every few seconds. Add to this the fact that many people don’t require glasses and would be reluctant to wear something so overtly techie, and it doesn’t seem realistic that the project will take off.

iWatch
Smart watches, however, offer a more realistic technological development. Relatively discreet, they wouldn’t give the impression of someone desperate to show off their latest gadgets, as smart glasses certainly would. Apple reportedly has over one hundred employees developing an iWatch concept that would have a curved glass interface and offer the same functionality as one of their smaller iPod players. On top of that, the ability to interact with an iPhone or computer, alerting the user to emails, phone calls and appointments.

They have already been beaten to market by a start-up called Pebble, which offers some of these capabilities. Sony also released their SmartWatch last year to much derision, with tech site Gizmodo somewhat cruelly describing it as “the worst thing Sony has ever made.”

You can certainly see why Sony were keen to get an early entrance into the smart watch market, and perhaps a lot of their work, and failings, will be built upon by other companies like Apple. The possibilities that could come from an iWatch are considerable, from health information being tracked through the user’s pulse to acting as a easy to use remote for other devices.

This may all sound very exciting, and another example of Apple developing a revolutionary product. However, there are problems that need to be overcome. First of all, the much discussed curved-glass that Apple is expected to use in their watches is not expected to be ready for the consumer market for at least another three years, according to Corning, the company designing it.

Corning already make the glass used in Apple’s iPhone, and are developing their Willow glass product, but the company’s president, James Clappin, recently told Bloomberg that it wasn’t yet ready for market. He said: “People are not accustomed to glass you roll up. The ability of people to take it and use it to make a product is limited.”

Apple also needs to persuade consumers that they need another gadget, despite already having an iPhone and computer. Although they’ve done well to convince people to keep buying new products until now, a watch with similar functionality to their phones may be a bridge too far.

Wearable technology is clearly something that the big electronics companies are expecting to be a massive new market, but along the way there will be some costly mistakes.

Whoever designs a product that fits seamlessly, and discreetly, into people’s digital lives will likely come out on top, and as ever it looks like Apple are one step ahead.

 

For more on mobile technology see Mobile Technology Report.

Japan hoping to see long term private equity boost

Posted on by Ben Debski

The private equity market in Japan is set to see a significant upturn in activity in the coming year as a consequence of the relaxed regulatory policies being implemented by new Prime Minister Shinzo Abe.

The Prime Minister was sworn in to office at the end of last year after promising to improve competition in Japan’s economy, as well as planning a considerable stimulus package. As a consequence of some of these policies, many in the private equity industry believe that there will be plenty of opportunities to put together deals that will help medium sized companies expand overseas.

Bain Capital recently took a 50 percent stake worth $1.3bn in Sumitimo’s television shopping network Jupiter Shop Channel, according to Mergermarket, while Japanese firm Unison is rumoured to be looking at partnerships with other groups to acquire foreign businesses.

According to Carylyle Group’s managing director Tamotsu Adachi, there will also be a number of larger Japanese corporations looking to spin-off parts of their business. The firm expects to launch a third fund in the country this year, and co-chief executive Bill Conway told investors recently that the strong yen and struggling public companies presented private equity firms with plenty of opportunities: “Maybe they shouldn’t have been public in the first place, or they are underappreciated. The yen has risen 20 percent [against the US dollar] in the past three months.”

He added that his groups’ presence in Japan, dating back to 2006, has given it an advantage over other firms looking to crack the tough private equity market there. He added: “We’ve been there a long time and half of the money was from Japan, that made us more Japanese in some way and has given us a bit of a head start there.”

Cisco looks to splash the cash in territorial expansion

Posted on by Ben Debski

Since an earnings call in November revealed that Cisco Systems was sitting on a cash pile of $46.4bn, many in the industry have speculated over what the company might be looking to invest in as it attempts to expand its already considerable operations.

The company’s chief executive, John Chambers, has announced that he is eager to look at opportunities in Europe and Canada, particularly in light of his failed attempt to persuade US tax authorities to change their stance on foreign cash holdings.

Many US firms in the technology sector have large amounts of cash stashed overseas, with Chambers estimating that the industry could have as much as half a trillion in cash reserves. They have been trying to avoid having a situation where they would be paying tax twice on the cash by bringing it back domestically, but have so far failed to change the stance of the authorities.

Chambers told the FT: “Over the last four to five years we wanted the US government to have a chance to provide a policy where we and others could make decisions on where we’re going to invest and where our headcount growth is going to be. It’s now at the point where we are going to go ahead and move. You’re going to see us put the cash to use.”

This could mean a considerable boost for technology sectors in Europe and Canada, with Cisco particularly looking at start-ups. Chambers is most enthusiastic about Canada, which he describes as “the easiest place in the world to do business”. He also singled out Scandinavia and Germany, while describing himself as “an optimist” with regards to the UK, which has been keen to attract overseas tech giants to invest in its burgeoning start-up sector.

In their latest earnings call in mid-February, Cisco reported that net revenue had grown five percent year-on-year to $12.1bn. Earnings-per-share reached a record level of 51 cents, more than the predicted 48 cents by analysts.

Saudi Arabia plans massive renewable push

Posted on by Ben Debski

For a country so rich in fossil fuels, Saudi Arabia has accumulated a vast wealth from the world’s insatiable appetite for oil. But one day these natural resources will run out, and the Saudi administration have sought to diversify the country’s energy provision by heavily investing in more sustainable forms of production.

The country has just launched a scheme that would see capacity of 54GW operational by 2032, making Saudi Arabia one of the world’s largest green energy producers.

By 2020, Saudi Arabia will have installed 23.9GW

Saudi Arabia currently produces around 12.5m barrels of oil each day, but is also seeing increased demand from domestic users, meaning energy exports may have to be cut.

The department in charge of the scheme, the King Abdullah City for Atomic and Renewable Energy (KACARE), said it wanted to award contracts for the projects by the end of the year. The first three contracts are estimated to be worth around $10bn and will generate 7GW. By 2020, the country will have installed 23.9GW, with a strong focus on solar power, as well as nuclear, wind, geothermal and bio fuels.

While the new infrastructure will help support the country’s energy exports, there will also be a minimum requirement for local provision, as well as contributions toward research and development for the renewable industry, said KACARE.

The new frontier

Posted on by Ben Debski

A productivity slump has been gradually building up steam in developed nations around the world, with the output generated by workers falling in relation to the hours they supposedly put in. This may reflect a trend where workers are set in their ways in what have, until recently, been successfully run industries. But, as I look at in the forthcoming issue of World Finance, this trend is not just confined to developed nations, but emerging economies too, albeit at a slower rate.

Global productivity over the last decade is estimated to have declined by 1.8 percent, according to research institute The Conference Board, reflecting a worrying trend that shows countries may not be fulfilling their economic potential, even if they are comparatively prosperous.

This was shown recently in Canada, where a report showed that despite the country being in the top five nations for prosperity, its workers produced less per hour worked compared to a number of other developed nations. Even more surprising is the fact that Canada is often held up as an example of an efficiently run economy, whereas countries like France and Italy, both more productive than Canada according to the report, are criticised for the way they have run themselves in recent years.

Experts suggest that the best way out of this productivity slump is through innovation.  The Jenkins report on Canadian innovation from 2010 showed that the country needed to do more to stimulate their workers to work smarter. It said: “Studies have repeatedly documented that business innovation in Canada lags behind other highly developed countries. This gap is of vital concern because innovation is the ultimate source of the long-term competitiveness of business and the quality of life of Canadians.

A more recent study by the country’s Institute for Competitiveness and Prosperity revealed similar concerns: “For each hour we work in Canada, we generate less value from our efforts than our counterparts in the United States. This prosperity gap is a productivity gap, and the productivity gap is an innovation gap. We are laggards in creating economic value per hour worked.”

Canadian businesses have reportedly been slowing down on their R&D spending, and so the country is heavily reliant on innovation being developed by its universities. In 2009 the country’s R&D was valued at around $30bn, with almost half of that coming from the public sector.

Other developed nations are also suffering from this slump, with the UK in particular facing a situation where employment is rising but the economy is contracting. Since 2008, productivity in the UK has remained relatively stable, but output has plummeted.

What is evidently needed from these countries is increased investment in innovative new industries that can drive growth, as well as a new approach to how people work and what they do with their working days.

A different approach to work was outlined by a UK Department for Work and Pensions study from 2009 that showed that small and medium-sized companies saw an increase of 58 percent productivity from implementing flexible working hour schemes. Moving much of a company’s back-end towards a remotely accessible cloud, freeing workers from their desks could therefore be argued to improve that businesses output.

As well as the freedom that flexible working allows, it would not be surprising to find an added consequence was that employees developed better and more creative ideas for their businesses. Ultimately, this again comes down to regulations and investment in a digital infrastructure that would allow this flexibility to flourish. If governments are serious about getting more out of their citizens, then creating an environment and infrastructure that encourages more creativity is surely the place to start.

China leads way in manufacturing, but lags in innovation

Posted on by Ben Debski

While China powers ahead of other countries in their manufacturing output, they, and other emerging economies, are failing to keep up with the investment in talent and innovation that will ultimately provide a more stable manufacturing economy.

According to research by Deloitte, maintaining a skilled, talented workforce is the key driver in sustaining a country’s manufacturing competitiveness, but emerging economies are investing more in scale of output than the sorts of drivers that more developed nations rely upon.

In Deloitte’s 2013 Global Manufacturing Competitiveness Index, they found that China ranked number one, yet again, and that over the next five years other emerging markets, including India and Brazil, will overtake Germany and the US as the leading countries in the hugely competitive manufacturing industry. However, Germany and the US lead China in their investment in innovation and helping talent succeed.

The report says: “At the country level, executives participating in the 2013 GMCI survey see developed nations, such as Germany and the US, as the most competitive nations with respect to their ability to promote talent and innovation.

“This is especially interesting when looking at specific talent and innovation metrics, which might signify that although Germany and the US have strong Innovation Index scores, countries — such as South Korea and Singapore — are very competitive on multiple measures like researchers per million population and basic math and science test scores.”

Deloitte say that economies like South Korea and Singapore will likely surge ahead of more developed nations, because of their focus on training their workforce and investing in science education. This is reflected in recently released FDI figures, which show that 2012 saw a decline of total inflow drop by 3.7 percent to £111.72bn, the first decline since 2009.

Manufacturing was particularly hit, with a drop of 6.2 percent, with much of this FDI being directed at other emerging economies like South Korea, Singapore and Taiwan.

While the index shows how important China’s manufacturing industry has been to sustaining remarkable economic growth, it also shows that the country has a lot of work to do in promoting innovation. There are signs, however, that it is beginning to do just that.

The report adds: “In China, policies either encouraging or directly funding investments in science and technology, employee education, infrastructure development along with safety and health regulations and sustainability polices are helping to provide a competitive advantage, according to Chinese executives surveyed.”

However, there is concern that China’s somewhat lax policy towards intellectual property, not to mention its strict control over what types of research is carried out, is believed to be stifling the sort of serious innovation that has allowed Germany, the US and Japan to succeed.

While more open economies like the US and South Korea have allowed businesses to heavily research all manners of innovative manufacturing ideas, it is difficult to see such companies emerging from a China that greatly restricts what can or cannot be researched.
Executives say that tight regulations, as well as antitrust laws, means that they are struggling to compete with the innovations of more open economies, although they benefit from the sheer scale of the Chinese market.

What the country needs to do is allow its workers the freedom to innovate, so that they help to manufacture the leading technologies of tomorrow, rather than the cheaper versions of well-known international products.

Dogged cleantech investors could be rewarded

Posted on by Ben Debski

As the cleantech industry bears the brunt of the risk averse investment strategies taken by investors in light of the ongoing global financial crisis, many analysts have been quick to call time on a sector that has never quite managed to breakthrough into the mainstream.

According to a report by tech website Gigaom.com, last year saw venture capital firms invest in a third less clean technology start-ups than in 2011. On average, each start-up raised $10.9m in 2012, lower than 2011’s average of $14.4m.

However, while many investors’ appetite for cleantech investments has waned, some feel that the lack of competition for start-ups means that those willing to take the risk could get both substantial stakes and undervalued stocks.

Peter Herbert, partner at Lux Capital, a special venture capital investor in the industry, told Gigaom that the firm had recently closed its third fund worth $245m, and that that they would be seeking opportunities in clean energy. He said that while there had been “negative sentiment towards cleantech in the market,” those that chose to remain were the committed to the industry.

He added: “People in it today are there for the right reasons: passionate, want to build real companies, not just flippers, hucksters and passers-by.”

The website also spoke to another cleantech focused fund, Khosla Ventures, which believed that the industry was going through a lull but would emerge stronger. “Venture is highly cyclical business, and we expect sustainability investments to experience a renaissance as today’s breakthrough companies successfully commercialise and have massive impact on society’s infrastructure.”

The industry has suffered particularly from governments cutting back on the subsidies which had been hoped would kick-start some of the new technologies. In his State of the Union address, US President Barack Obama said that he wanted to implement policies that would help private enterprises drive clean technologies into the mainstream, with a particular focus on clean energy.

India to try to redefine infrastructure

Posted on by Ben Debski

The never-ending quest for a coherent and meaningful investment in India’s infrastructure has led to the government seeking to widen the definition of the term to encourage a boost in industrial activity, after a disappointing year for the country’s manufacturing sector.

South Asia’s economic powerhouse has for years been planning to overhaul its inadequate infrastructure sector, which has traditionally meant spending focused on building new roads, railways, airports and power plants. Huge sums of money have been set aside for grand projects, such as the $90bn Delhi to Mumbai Industrial Corridor, as part of a series of five-year plans.

The current plan, the twelfth, is said to require as much as $1trn to modernise the country, but there have been calls from the private sector to widen the definition of infrastructure to include the telecoms, housing, education and shipping sectors.

India’s Finance Minister, P Chidambaram, is set to unveil the budget for the next year at the end of the month, and is expected to include new sectors within the infrastructure umbrella, so that they can benefit from preferential tax rates with easier access to both domestic and international funding.

The country saw just 0.7 percent growth in manufacturing between April and December last year, representing a significant decline on the previous year’s figure of four percent.

Encouraging foreign investment in infrastructure has often proved problematic for India, with investors wary of the somewhat chaotic planning laws and bureaucratic maze that needs to be navigated. While many of these large projects have been built, others have remained on the drawing board for years.

On Sunday, Anand Sharma, India’s Commerce and Industry Minister, travelled to the UAE to persuade the Abu Dhabi sovereign wealth fund to help pay for new infrastructure projects and boost trade ties between the two regions.

He told reporters: “India is committed to strengthening and expanding cooperation with UAE in other sectors such as construction, downstream products in the petroleum and natural gas sector, agriculture and food processing, science and technology, renewable energy, IT, education, training, health and financial services.”

Trade between the two regions was $145bn last, a significant rise on the $67bn five years ago. Sharma added that he felt improved links should see that figure rise again this year: “I expect that with the kind of dynamism which has been shown in our trade established with [the] UAE, this year we will cross $175bn.”

Obama to push through market-based climate reforms

Posted on by Ben Debski

Addressing the US Congress in his first State of the Union speech since being re-elected in November, President Obama said his second term will see him push through serious reforms to the energy markets, and that he wants market-based§ solutions to the problem of climate change.

The speech saw Obama tell politicians in both houses that he is willing to force through serious reforms as part of a busy second term agenda that he hopes will reshape the US economy. Congress has been slow to act on climate change in recent years, and Obama said if they “won’t act soon to protect future generations, I will.”

“I know people said there’s a significant scientific consensus on that issue, but I’ve actually seen reasonable debate on the principle.”

Obama also spoke of addressing other issues relating to the energy sector, with an emphasis on making it easier for businesses to operate in the market and improving efficiency. He said: “My administration will keep cutting red tape and speeding up new oil and gas permits. But I also want to work with this Congress to encourage the research and technology that helps natural gas burn even cleaner and protects our air and water.”

He added that he wanted to set up an Energy Security Trust that will “drive new research and technology to shift our cars and trucks off oil for good,” as well as encouraging states to focus on more efficient energy use in buildings. He said: “The states with the best ideas to create jobs and lower energy bills by constructing more efficient buildings will receive federal support to help make it happen.”

Presidents entering their second terms are often keen to pursue grand schemes that will be seen as their legacy once they step down, and many are able to achieve bigger changes due to the lack of a need to pander to important lobbying groups in the hope of getting re-elected again.

However, there is still considerable opposition to climate change reform, notably from Republicans, who lead the House of Representatives. Rising star Senator Marco Rubio called for more money to be directed at oil and gas exploration, with less “wasted” on uncompetitive renewable energy technologies.

In what has become a worrying trend for Republican leaders, Senator Rubio said he wasn’t convinced of the overwhelming consensus on climate change: “I know people said there’s a significant scientific consensus on that issue, but I’ve actually seen reasonable debate on the principle.”

Innovation and manufacturing should go hand in hand

Posted on by Ben Debski

The once dominant manufacturing sector is what powered the US economy towards economic domination, but in light of increased competition from emerging markets, industrial jobs have taken a severe dip over the last two decades. According to some figures, the country has lost as many as six million jobs over the last decade alone to other countries.

Reviving them is promoted by many as the best way of getting the US economy back on track, as well as providing jobs for the growing number of unemployed, but undoubtedly the industry needs to modernise if it’s to return to its glorious past.

How to do that is disputed. On the one hand, some believe that a standard investment in factories and infrastructure, creating those much-needed jobs, is obviously a place to start.

But many economists believe that boosting investment in R&D, and keeping the brightest brains close to the manufacturing sector, is the best way of fueling innovation and long-term economic growth.

At a recent Brookings Institution conference, panellists discussed how the US manufacturing sector could get back on track, and why it had faltered in recent years. Bruce Katz, the Brookings Institution’s vice president, said: “We still think about manufacturing in the US as yesterday’s economy as opposed to the vanguard of innovation in our economy.”

He added that the country had lost jobs, while still investing in innovation, something which needed to change. Manufacturing accounted for “nine percent of jobs, eleven percent of GDP, 35 percent of engineers, 68 percent of private R&D, and 90 percent of our patents,” adding that the US “may be the only economy to decouple production and innovation.”

There are signs that this may be changing, however. A recent piece in the New York Times highlighted a General Electric battery plant in New York, close to GE’s research facility, allows for a more efficient development of products. GE’s Michael Idelchik told the paper: “We believe that rather than a sequential process, where you look at product design and then how to manufacture it, there is a simultaneous process.”

Other countries have been eager to create whole innovation hubs close to their manufacturing sectors. In the forthcoming issue of The New Economy, I spoke to Frans Schmetz, managing director of the Netherland’s High Tech Campus in Eindhoven, who told me that the collaborative nature of having so many companies conducting research – they have 115 – allows for greater innovation, which can then be easily used by the manufacturing sectors throughout Holland, as well as neighbouring Germany.

Similar research hubs have sprouted up elsewhere, with Cambridge providing considerable innovation to industries just to the south in London, and the Kista region of Stockholm providing the latest research for Sweden’s industrial output. China and Taiwan have also poured money into their own research centres.

Evidently the US needs to play catch-up with these other regions, in order to improve manufacturing. Stephen Hoover, CEO of PARC, a research subsidiary of Xerox, thinks it is already underway, telling the New York Times: “The manufacturing process itself is going through an innovation revolution.” If he’s right, then it can only be good news for the country’s once great economic engine.

Microsoft helps founder recapture Dell

Posted on by Ben Debski

Once one of the leading PC manufacturers, Dell has struggled in the face of heavy competition from rivals like Lenovo and Hewlett Packard over the last decade. Now, the man who launched the company 29 years ago is seizing control once again with the help of another computing giant that’s been suffering in recent years.

Microsoft, which has seen equally fierce competition from Apple and Google since dominating the PC software market for so long, is lending Michael Dell $2bn as part of a $24.4bn that will see Dell taken private. The deal is also being part-funded by technology investor Silver Lake.

One of the leading lights of the PC-era, Michael Dell has accumulated a net worth of $14.6bn over his career, leading him to be hailed as one of the US’s most successful entrepreneurs. The company’s founder, who is also the company’s chief executive and chairman, already owns 14 percent of the firm and will retain his stake. However, by making the company private he will wield far greater control over the firm he built up as a leading provider of customisable; low to medium cost personal computers.

He is expected to scale back the consumer PC division, in favour of positioning the company as a leading enterprise technology company. There will also likely be a focus on big data and cloud technologies, as well as boosting its ARM-based server ecosystem.

Where Microsoft fits into the equation is unclear. It has been increasingly looking at provider hardware to compete with Apple and Samsung, and its likely seat on the Dell board could see it push for a stronger ties between the two firms.

The fight back from one of technologies most successful businessmen, who is undoubtedly staking his reputation on the deal, is likely to be interesting.

A green man

Posted on by Ben Debski

There were substantial changes in the discourse between President Obama’s first and second presidential campaigns, particularly regarding energy. If, four years ago, he seemed glib about the oil and gas sector and more than enthusiastic about the Climate Change Bill, the tables were turned on the road to his second term.

The US economy was a frequent topic of heated debate during the presidential campaign, as Obama and Mitt Romney pitted their recovery plans against each other in the hope of convincing the nation. And as expected, much was said about the energy sector. Both candidates were careful to emphasise the differences between their policies during the second debate of the campaign at the Massachusetts Institute of Technology.

Obama was keen to embrace his ‘all-of-the-above’ energy strategy, which – at least on paper – includes developing more oil and gas drilling as well as funding research in energy innovation. Though the President has been clear in his enthusiasm for renewable energy in the past, in his second presidential campaign he was keen to show his support for fossil fuels.

President and CEO of the American Petroleum Institute Jacques Gerrard said: “If you listen to what the President said during the election, he is actually a big proponent of oil and natural gas. He has indicated in his all-of-the-above strategy that oil and natural gas should play an important role.

“But if the President is serious about what he promised the American people and what he was elected on, then oil and natural gas will have to be a big part of that energy plan. We are in sync together on the role of oil and natural gas. The question before us is: will the President live up to his commitment?”

Obama has been clear on his aim to continue to develop domestic oil and gas, though the policies announced during his most recent campaign were a drastic change from the policies he pursued during his first campaign four years ago. Gerrard said: “The President has really moved 180 degrees on the issue of oil and natural gas in the past year, or year and a half.

“Two years ago, in his State of the Union address he called us [the oil and gas industry] yesterday’s energy, assuming we had no role. But we provide over 62 percent of the energy consumed in the United States and his own economists will tell you that we will continue to provide over 50 percent of the energy 50 years from now.”

A shift to shale
One of the major factors behind this change of heart has been the remarkable shale oil and gas boom America has been experiencing over the past few years. Vast reserves of both oil and natural gas have been surprising geologists, hidden under sheets of shale rock. New developments in technology are finally allowing the safe and efficient extraction of these recently discovered resources.

According to the IEA, the US’s formidable shale discoveries will help the country overtake Saudi Arabia as the world’s largest producer of oil by 2020. According to the agency, the global energy map “is being redrawn by the resurgence in oil and gas production in the United States”. Experts have suggested that President Obama’s recent U-turn on oil and gas strategy might have something to do with the abundant new discoveries.

The President has vowed to cut oil imports in half by 2020, which inevitably means developing more offshore and possibly more federal lands for oil and gas exploration. For Rob Barnett, senior utilities analyst for Bloomberg Industries, this is still a contentious issue.

Barnett said: “There is a constant debate between those that want additional energy exploration on federal lands and groups that want to see that type of land be preserved.

“The amount of land that is available for prospecting is actually a little lower under President Obama but production is actually up. So production does not equal necessarily the amount of land: it is up predominantly because of technology, not because of increased leasing and things like that. I don’t expect too much of a change on that front under a second Obama administration.”

Fracking success
As much of the newly discovered reserves are buried under shale rock, the US looks set to continue investing in fracking: the controversial technique of using chemical-infused water to drill through the shale and reach the oil and gas underneath. In the last two years, the technique has become widespread, but is still scarcely regulated. Obama’s second term is likely to bring further regulation, particularly pertaining to the use of water in the fracking process.

Barnett said: “There are potential regulations for water that we could expect at some point, most of that is handled at State level right now. The Environmental Protection Agency is looking into whether there are issues with water, but we don’t expect a report on that until 2014 and then regulation would come from that. We are years away from water issues, which are the most pertinent to fracking.”

Though the President expressed newfound support for the oil and gas industry during the campaign, he has also suggested he might be looking to eliminate some of the subsidies currently designated to the fossil fuel companies. As it stands, the federal government grants around $46bn annually in subsidies to the oil and gas industry.

Virginia Lazenby, President of the Independent Petroleum Association of America (IPAA), said the industry was vigorously opposed to the President’s plans to collect more tax from the industry. She said: “IPAA hopes President Obama will stop his call to eliminate the crucial tax provision of intangible drilling costs and percentage depletion, which are not subsidies at all, but allow independent producers to reinvest 150 percent of their cash flow into new energy products.”

First term promises, first term failures
During his first term in office, the President pushed for stricter regulation pertaining to the emission of greenhouse gases and sought to invest billions of federal dollars in green energy companies. Neither policy was particularly successful: the greenhouse gas emissions bill was killed by the Senate and the President was criticised after Solyndra, a solar panel manufacturer that had received federal investment, went bankrupt.

While the President has insisted investments in research and green energy will continue, it is unlikely any more climate change legislation will make it through the Republican-controlled Senate. Nevertheless, he is unlikely to back down on his renewable energy pledges. Barnett said: “On the other hand, energy policy is also driven by questions about the environment so right now we are looking at four years of a very active Environmental Protection Agency putting forward new regulations and things like that.”

There are currently some tax breaks and other incentives in place to help stimulate the renewable energy sector, and the President has promised even more assistance for solar and wind technology. However, Congress is under Republican control and is likely to kill further environmental protection bills. Obama will need some form of congressional support to extend tax breaks for the renewable energy sector.

One of the President’s main challenges may come sooner rather than later as the current tax credits for wind energy production expired at the end of 2012. An extension will have to go through Congress. According to one of the President’s aides, clean energy programmes and efficiency initiatives will remain a major goal during the second term.

Obama’s deputy energy and climate change adviser Heather Zichal said: “If you take a step back and look at what this administration’s done to invest in clean energy and double down on energy efficiency initiatives, we’ve made it clear that we are going to look strategically at how we use our existing authorities. We will continue to focus on that in the next administration, and obviously the big issue will remain engagement with Congress.”

Taking responsibility
Though Obama has been adamant in reiterating his commitment to fighting climate change and curbing natural gas emissions, he has not yet been specific in outlining any policy. He said: “I am a firm believer that climate change is real, that it is impacted by human behaviour and carbon emissions. And as a consequence, I think we’ve got an obligation to future generations to do something about it.”

Since Obama took office in 2008, the US has doubled its renewable energy output and it is likely the President will continue to push for these sources to play an increasingly large role in the US’s future energy independence plan.

Executive Director of the SUN DAY Campaign Kenneth Bossong says Obama’s first term policies are directly responsible for the dramatic growth in energy generation from renewable sources. He said: “non-hydro renewable sources provided 5.76 percent of net electrical generation for the first half of 2012. This represents an increase of 10.97 percent compared to the same period in 2011.”

During the second presidential debate, Obama said: “We’ve got to control our own energy, you know – not only oil and natural gas, which we’ve been investing in – but also, we’ve got to make sure we’re building the energy sources of the future. Not just thinking about next year, but 10 years from now, 20 years from now. That’s why we’ve invested in solar and wind and biofuels, energy-efficient cars.”

But what about coal?
The clear absentee from President Obama’s all-of-the-above energy strategy so far is coal. At the beginning of his administration, the President promised to invest in research into developing a clean coal technology. Nothing has materialised and miners have accused Obama of turning his back on the industry.

The US has one of the world’s largest coal reserves and proponents say the country should work with what it has. However, up to 33 giga-watts of coal-fired power generation is in line for retirement. This is due in part to the emergence of natural gas, which is not only cheaper but burns cleaner than coal.

Bill Bisset, President of the Kentucky Coal Association, has said the industry is in decline “not simply because of the low natural gases but also the impact of a federal government that has increased costs of mining at every turn”. But he added: “We are hopeful that the President’s pro-coal comments from the campaign reflect a new direction in his administration.”

Building the infrastructure
President Obama’s second term in office is also likely to hail greater investment in the energy infrastructure sector. Since he has been in office, the Department of Energy has developed the Smart Grid Investment Grant programme. It has invested $3.4bn in grid-enhancing projects and initiatives, which optimise energy consumption and help make households and industries more energy efficient.

While high-tech cities have benefited most from this technology, an additional $36.25m is being invested exclusively in bringing smart grid projects to rural areas. This can help make agriculture distribution more efficient.

Another significant investment comes in the shape of the Keystone Pipeline. The President has put the project on hold for the time being, but industry analysts expect to see it granted approval. The pipeline will allow a greater flow of crude oil from Canada to refineries in Texas and could significantly reduce the US’s reliance on oil from the Gulf region. Obama was initially reluctant to concede on the build, but seems once more to have shifted gear during the campaign.

Gerrard said: “The Keystone Pipeline will be the first real test. Even with changes in the election, there is still a majority of support both in the Senate and the House for the Keystone Excel Pipeline. The President implicitly indicated that he would approve that second leg from Canada down after the election. We are waiting to see if he follows through: that will be the first test of if his words really meant something during the election.”