Building Competitive Green Industries

Appendix A.Market Sizing MethodologyThe market sizing methodology has five main steps (further detail available upon request):1. Regional clusters were defined based on a variety of indicators that allowed for modeling of regionalopportunities amongst similar countries. This allowed country-level data gaps to be filled byextrapolation. The clusters group similar countries within regions, with India and China treated as standalone,both because of their relative uniqueness, size, and better data availability.2. A short list of clean technology sectors was created and the overall market value for each sector for eachregion was estimated using a variety of data sources, including: investment projections, installed capacityprojections, and national plans. Country data gaps within regions were filled by extrapolation using GDPas the main scaling factor.3. The value chains for each sector were mapped and the proportion of value in each segment estimated(for instance, 40 percent of the value is in major equipment; 10 percent in engineering, procurementand construction; and 50 percent in operations and maintenance). This was combined with the regionalestimates of sector market value to estimate the addressable market in each segment.4. The share of each value chain segment that could be captured by local SMEs was estimated. A ratingof Low, Small, Medium, or High was assigned to each value chain segment for each sector with acorresponding fixed percentage for each rating in order to estimate the value that could be captured bylocal SMEs. The ratings were based on the technical complexity and market structure of the segment andexperience in the United Kingdom of working with SMEs in clean technology across the value chain.5. All of the estimates were sense checked against existing global estimates and the findings from the casestudies. In the analysis of opportunities the subregions were reaggregated to more conventional regionsfor the purposes of presenting the findings.84 Building Competitive Green Industries: The Climate and Clean Technology Opportunity for Developing Countries