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SB 182 Will Help Move California’s Economy Into The 21st Century

By Kish Rajan

If you live in any big city in California, chances are you’ve used a rideshare service to go to or from the airport. It’s become such an easy option that most of us take it for granted.

But a lot of effort goes into making that ride so easy for you. And much of that effort comes from the drivers — independent entrepreneurs who have turned their cars in to rolling small businesses.   These small business owners enjoy the freedom, flexibility and rewards of being their own bosses — even if just for a few hours per week.

And while they are experts in navigating the streets of their communities where they drive, they can often be challenged by all the government regulations they have to navigate. Los Angeles County, for example, is made up of 88 different municipalities and each of those municipalities has its own business license standards for drivers. As they drive through different towns, drivers are subject to different licenses, fees and requirements.

Driving from San Jose to Oakland a driver goes through 5 different cities. All over the state, drivers are moving through different cities every day — and running the risk of getting fined for not having the right business license.

But to expect drivers to obtain licenses from every municipality they might go through is unreasonable. Most licenses cost around $100 each and those fees start to add up creating a serious barrier to entry for new drivers who are really entrepreneurs (87% of Uber drivers, for example, say they drive because they want to be their own boss). As a state, we want to do everything we can to encourage entrepreneurship and to help give people the freedom to change jobs and build new businesses. We don’t want to burden people with unnecessary regulations.

This is as perfect example of a modern industry operating under outdated regulations. Of course it’s important that people feel like they are in the hands of licensed professional whether they’re getting a massage, hiring a plumber or getting a ride. But forcing those businesspeople to get often redundant business licenses just because they cross a municipal line is old-fashioned thinking. In today’s economy, people need to be able to go where their customers are and that’s not always in the same town.

That’s why we support SB 182. The bill would allow drivers to obtain one business license that could be used across municipal lines. Drivers would be able to move freely around the state knowing they are licensed to operate everywhere; and passengers would get the assurance that they are in a car with a driver who has a business license in addition to the stamp of approval from the rideshare company.

The bill also stands to benefit the many different municipalities of California. Instead of having the state issue the business license, it could be issued by the driver’s home town. That way, if a driver is based in Livermore but mostly picks up riders in San Francisco, Livermore would get the benefit of the licensing revenue.

SB 182 also helps protect drivers’ privacy. Some jurisdictions publicly post addresses of people who apply for business licenses. Because drivers essentially work out of their cars, their home addresses have been made public. SB 182 would ensure that when drivers apply for licenses, their addresses remain private.

This bill should be seen as a model for legislation going forward. The sharing economy (or as I prefer to call it, the personal enterprise economy) is going to continue to be an important part of our economic mix. We need to make sure our laws and regulations are updated to protect workers as well as customers. SB 182 acknowledges that the world is changing and creates smart regulations that make sense in today’s world.

Kish Rajan is chief evangelist at CALinnovates and former director of Gov. Jerry Brown’s GOBiz initiative. He can be contacted at

The Future Of Work Depends On Answering Important Questions Today

By Kish Rajan

Today, many of us are trying to sort through a contradiction in how we understand our economy. Fewer people are unemployed than at any time in the past decade. But as a country, we don’t feel like we’re as prosperous as we’ve been in the past. Many people would like to blame technology for this phenomenon, pointing to chips and data as the great job killers. But as with many things in life — the truth is more complicated.

Take productivity for example. This is an important measure because increased productivity helps boost the annual GDP, and can lead to higher wages and better standards of living. Technology has been a giant boon for manufacturing productivity, which has nearly doubled in the past 20 years, with half that gain coming in the tech sector, according to a new study by the Progressive Policy Institute. Since 2007, when the current tech boom started, employment in computer and mathematical occupations — including good-paying jobs for software developers and network administrators — has grown by more than 900,000 jobs. One study found that robots added nearly a half percent to annual GDP growth between 1993 and 2007.

But then there’s the flip side. Well over half of us are in jobs that could be at least 30% automated right now, according to research by McKinsey & Company.

In the United States, middle-income households, the young and those with less education have already been hit hardest by automation. One study by Boston University found that robotics reduce the employment-to-population ratio and wages in those sectors where automation is added. According to this study, workers with only a high school degree saw their wages fall from 80% of their college-educated peers to less than 60% between 1975 to 2014.

Unsurprisingly, these low-skilled, less-educated workers are employed in occupations at the greatest risk of further automation. In fact, experts predict the number of robots performing jobs in the U.S. will quadruple by 2025, which could eliminate as many as 3.4 million jobs.

These conflicting numbers paint a picture of a world where more high-paying jobs are being created while low-paying jobs are being replaced by robots. It’s no wonder that so many people are so concerned about the future of work.

So what can we do?

Believe it or not, we have a lot of power to shape how this all plays out. The future of work is going to depend a lot on the decisions businesses and government make today. And in order for those with power to make the right decisions, we all have to be asking the right questions.

Is technology causing net job growth or net job loss? It can be difficult to tell. Different reports tell different stories. Some job categories are growing and some are shrinking, so what’s the overall effect?

And if high-paying tech-heavy jobs are growing faster than low-wage service jobs are disappearing, how do we as a nation of workers adjust? We’ve seen that government-sponsored training to move displaced workers into new tech jobs isn’t always successful. Is there a better way? And who bears the responsibility of retraining workers, businesses or the government?

How do we balance encouraging tech companies to grow while ensuring that people have good jobs? It’s important that innovators and entrepreneurs be encouraged to build the Googles and Facebooks of tomorrow, but what do we do when those new companies displace workers in other industries? And how do we make sure that those tech jobs are popping up in Peoria and not just in Silicon Valley?

These questions should be high-priority for government at every level, from city hall to the White House.

Technology has always been a convenient boogie man for politicians looking to place blame for a changing job environment. The automobile put carriage drivers out of work. TV eventually killed radio storytelling (though thanks to podcasts it’s making a comeback) and online travel companies kicked most travel agents to the curb.

But each of these innovations also advanced our society in important ways and created new jobs. There’s no reason to think the current tech revolution will be any different and when you look at the productivity numbers from the recent Progressive Policy Institute report, there’s reason for hope.

But we’d be foolish to hide our heads in the sand and deny that the landscape is changing in a way that is hurting some Americans. Finding the right balance here will be key to building an America that will prosper and offer new opportunities to all citizens.

Kish Rajan is chief evangelist at CALinnovates and former director of Gov. Jerry Brown’s GOBiz initiative. He can be contacted at

Congress Should Write Net Neutrality Into Law

By Mike Montgomery

Net neutrality is a foundational principle in the digital age. But for too long its future has been uncertain due to changes in leadership and politics. That is why it’s important for Congress to do what only it can do through a bipartisan process: enshrine the principals of net neutrality into law.

Wednesday’s announcement by Chairman Ajit Pai that the FCC will open rulemaking proceedings to reverse the Title II regulations put in place by the last administration does not change the need for a law. In fact, it shows what a political football net neutrality has become.

While politicians seem disinclined to agree on anything these days, there are good reasons why they should work together on this. While net neutrality proponents were pushing for the Federal Communications Commission to regulate the internet under Title II of the Communications Act of 1934, many of them instantly suffered from buyer’s remorse when the FCC did just that in 2015.They realized that subjecting the internet to utility-like regulations may not be the best way to encourage innovation around privacy, security and new features that could not only make our lives more efficient but delight us. Companies like Netflix backtracked on their support for Title II.

The problem with Title II is that although it does, in theory, ensure that all data is treated equally and that companies can’t carve out fast lanes, it also opens the door to the internet being frozen into a time capsule that discourages network modernization, the next wave of innovation and competition among providers. The digital world moves at the speed of light. To slow that growth to the speed of bureaucracy would have serious negative effects on the burgeoning tech industry which is creating jobs faster than almost any other industry out there.

Another problem is that while the previous administration was happy to enforce net neutrality through Title II, it’s now clear that the current administration would like to keep the tenets of net neutrality in place, but toss Title II into the regulatory dustbin. Chairman Pai has shown that he’s an advocate for the principals of net neutrality — he just doesn’t agree that the internet should be regulated like a utility.

So here we go again. Proponents of each side of the argument are gearing up for another bite of the regulatory apple as the FCC reopens the debate around net neutrality. Public interest groups are preparing to raise millions by shouting fire in a crowded theater and striking fear into the hearts of consumers. Their counterparts on the right are firing up their many D.C.-based lobbyists to argue for total deregulation.

I used to refer to net neutrality as a food fight. I was wrong. It’s a holy war dressed up as the plot to Groundhog Day. As everyone ramps up the rhetoric, perhaps it’s finally time to stop doing the same thing over and over and consider another path.

If net neutrality is as important as we all think it is, then perhaps we should do more to ensure its survival. We can’t do that by watching the pendulum swing back and forth between Title II and deregulation. We can’t do it through regulations that can be eviscerated every 4 to 8 years (or whenever there’s a regime change in Washington).

We need a law.

Once again, CALinnovates calls upon Congress to take the hint and get to work.  By making net neutrality the law of the land, a political hot potato gets replaced by clarity and certainty, not just for a presidential term or two, but well into the future. And the new law must guarantee key protections for consumers and innovators that are at least as strong as those provided in the Open Internet Order.

By turning net neutrality principals into law, Congress can deliver on behalf of the American people and put this never-ending tragicomedy to rest once and for all.

Mike Montgomery is the executive director of CALinnovates, a coalition of tech companies based in California.

This piece was originally published in The Hill.

CALinnovates Calls On Congress To Enshrine Net Neutrality Into Law

“Net Neutrality is a foundational principle in the digital age. But for too long its future has been uncertain due to changes in leadership and politics. That is why it’s important for Congress to do what only it can do through a bipartisan process: write into law the principles of Net Neutrality. Congressional action will provide innovators with a level playing field and industry with the certainty to make technology and investment decisions to continually upgrade our networks. If Net Neutrality is as important as we all say it is, it should be the law of the land, not a political hot potato resting on the third rail of American tech policy for another decade.” – Mike Montgomery, Executive Director

Big Music Blames Streaming For Its ‘Woes’ But Industry Is Doing Just Fine

By Mike Montgomery

The annual Grammys award show is full of glamour and fantastic entertainment featuring incredibly talented artists and musicians. Grammys On The Hill, on the other hand, is the event’s corporate, big music, obnoxious cousin. Every year at this time, big music executives and a pocketful of artists descend upon Washington not to delight and amaze, but to cry poverty in the hopes of changing the laws around music licensing.

Today, the big multinational and multibillion dollar music labels will share their sob stories with members of Congress. They’ll attempt to convince policymakers that a lack of royalties for radio play hurts musicians, that songwriters deserve to make more and that streaming is harmful to music’s health.

Over the last decade, how we listen to music has transformed, giving consumers the power to choose what, when and how we listen to music — whether it’s on the radio, satellite or via streaming platforms. Innovation has changed the game. As I’ve said so often before that I’m now becoming a broken record, there’s no putting the technology genie back in the bottle.

But for the labels to be lamenting to Congress about their faded fortunes in this environment is a pretty ridiculous line of argument. Three music labels, Universal (owned by Vivendi), Sony, and Warner Music, account for 70 percent of all music revenues — meaning they still hold the purse strings.

And despite what they say, there’s more money going into that purse than at any time in recent history. The music industry reported last week that it had its best year in two decades. According to the Record Industry Association of America (RIAA), total U.S. retail sales from recorded music rose 11.4 percent last year, to $7.7 billion.

That’s great news that the labels should be celebrating. But that’s not the way the Big Three operate. They smell blood in the water and, like a pack of hungry sharks, they’re attempting to squeeze the rest of the industry in order to grab more for themselves.

They tell artists that the streaming platforms and the radio stations are to blame. They put up a united front before Congress, saying that we’re all in this together and that together we can fix the music industry.

Sadly, artists won’t realize the full benefit of growing record revenues because the music labels have done everything possible to preserve their pro-label, anti-innovation business models instead of embracing new technologies and the operational, market and marketing efficiencies they offer.

Like taxis fighting the consumer-friendly advent of companies like Uber and Lyft, record labels refuse to change. They still work “breakage” feesinto their artist deals, which was money that was originally meant to cover the cost of records or discs broken in transport. In the streaming world, that’s no longer an issue and it is but one tangible example of money that’s being funneled away from artists not by the streaming companies, but by the labels.

To find the voice of reason on all of this Grammys On The Hill have only to look to this year’s honoree: country music star Keith Urban. The Australian-born singer is one of the biggest acts in America and he’s beloved by music fans of all ages so it’s no surprise that big music would want him,not the corporate titans behind the curtain, as the face of their lobbying rodeo.

But he recently commented to Politico that he doesn’t share the same distaste for streaming platforms as his label overlords, stating that, “Owning music feels like a very foreign concept to me. Buying someone’s album feels odd to me. … But streaming to me seems to be a very obvious, fluid, quick, logical way for music to be heard in this day and age.”

And when asked about one of the main complaints of the Grammys On The Hill crowd, that they should be getting paid for radio spins, Urban very candidly said he still finds AM/FM radio to be a useful promotional tool that helps him reach fans. “A huge amount of my audience still listens to radio,” he told Politico. That’s where they get a lot of my music.”

For years, the labels have been clamoring for royalties for radio play. They claim it’s unfair that radio stations can spin hit songs and pay songwriters but not artists for the right. But if traditional radio play is so important to a huge star like Urban, the only reason the labels are seeking to alter the landscape is to further enrich themselves. This isn’t a rising tide argument. This is a testament to the self-aggrandizing nature of the record labels and their unending quest for greed.

We need to take a new look at how the big music is organized, subsidized and supported by Washington. And that should start with one simple word: transparency. Congress should ask the labels to detail how much of the $7.7 billion in revenues it took in last year went to  the artists they purport to represent. Get granular. Details are our friends.

Despite the whining from big music, what the RIAA revealed last week is that business is booming — for them. It’s time to stop catering to the record labels and create a system that is fair to everyone, rather than allowing the labels to continue telling their dirty little lies about the nature of music licensing laws.

This piece was originally published in The Hill.

Innovators Need Closure On The Apple v. Samsung Case

By Tim Sparapani

The dispute between Samsung and Apple over allegations that Samsung stole Apple’s mobile phone design is like a piece of gum that you’ve been chewing for way too long. It’s time to spit it out.

There’s an enormous amount at stake for innovators in this fight over mobile phone sales, and as I’ve written many times before, this case truly matters. How, or if, damages are ever calculated for Samsung’s infringement of Apple’s rounded-corner phone design will set precedent that will influence Silicon Valley for years to come.

There’s also a real risk that if the outcome establishes the wrong formulation for calculating patent design damages, it will create a new type of design patent troll —essentially law firms that will sue companies to attempt to extort settlements from them based on allegations that they have infringing product designs.

As a reminder, here’s how we got to the point where a federal court has been told to determine anew potential damages for alleged design patent infringement. Last year, the U.S. Supreme Court decisively reset the rules of design patent cases to prevent them from spinning out of control. The court rejected Apple’s position that it was entitled to the full cost of each iPhone that wasn’t purchased because a consumer had instead opted for the infringing Samsung phone.

If the court had ruled in favor of Apple’s position, Samsung would potentially have been on the hook for an estimated $1 billion. But the court decided (to Silicon Valley’s delight) that this “total profits” damages theory was erroneous because software-powered hardware is routinely filled with hundreds if not thousands of other patented inventions that give those products their value.

While the Supreme Court wisely struck down this total profits standard, it left the job half done by tossing the case back to a lower federal court to determine the appropriate damages. That’s why the upcoming decision from the Federal District Court for the Northern District of California will establish precedent around what portion of a product is attributable to its design as opposed to its functionality.

Drawing that line is easy with something like a shovel, which is a relatively simple tool. It’s much harder to do with a complicated piece of technology like a drone, an autonomous vehicle or a smartphone. The court will need to craft a smart rule that divvies up the pie so future judges and juries can determine damages when these cases invariably come up again.

Full disclosure here: As I’ve written before, I’m an unequivocal Apple fan boy. Since the U.S. Supreme Court’s ruling, my family has bought two more iPhones, and I’m writing this piece on my new Mac. I love the design, durability and functionality of Apple’s products. Simply put, though, the risk to innovators is too high if Apple is allowed to recoup the lion’s share of its alleged losses because a lower court elevates the concept of design over product functionality.

The court’s determination will go beyond the question of how much Samsung has to pay Apple. It will lay the groundwork for rules about how we properly compensate the designers who produce iconic, paradigm-shifting product designs, particularly when those designs are only a portion of the usefulness of the product they are part of. The decision will tell us a lot about where the value lies in any new piece of technology. That’s going to be an important factor in ensuring all innovators in Silicon Valley, including coders and designers, prosper.

The longer this case drags on, the more these questions go unanswered and the more difficult it is for people who might be working on ground-breaking products to move forward.

This piece was originally published in Forbes.

How Augusta, Georgia, Is Becoming A Model For Tech Innovation In Small Cities

By Mike Montgomery

Graphic designer and illustrator Jason Craig lives in Augusta, Georgia, but he travels a lot to nearby cities like Atlanta and Columbia, South Carolina, for creative contract work and entrepreneurial camaraderie. “I wish I didn’t always have to leave to do cool work,” Craig says. “I’m always going to other towns and giving them my best — I want to do that in my hometown.”

Craig might soon get his wish. By the end of this year, Augusta could be known for a lot more than just its famous golf tournament. Starting in the fall, Augusta residents will have access to something called the Augusta Innovation Zone. A team of six action leaders is renovating a full downtown city block, including two historic buildings, and turning it into an incubator and hub for innovation, arts, entertainment and restaurants. Members of all industries and career paths will be able to rent desks, or even a full offices, there; they’ll share a receptionist and common office supplies; and they’ll attend seminars and workshops. Eager budding entrepreneurs might even want to rent one of the iZone’s apartments. Interactions might lead to mentor situations or future partnerships. “It will give most cities a run for their money in live-work-play spaces,” says Tommy Wafford, one of the iZone action leaders.

Wafford says he and his friends came up with the idea over drinks one night as they sought support on their own projects. “We said that something’s got to be done with startup innovative culture in our city,” says Wafford, CEO of MealViewer. “I’m on my third startup with my business partner. Every one [of these startups] has been a challenge — we’ve had to bootstrap every single one because there’s been no culture here.”

The iZone team wanted to create a physical space where people could come together to brainstorm ideas, find mentors and bounce entrepreneurial projects off venture capitalists. They wanted a place where people could inspire one another to bring their visions to fruition. And they wanted local businesses to turn to a creative space for recruiting events. Augusta, which has a population of just under 200,000, tends to draw millennials for a new cyber facility and a university hospital, but then they leave for larger cities. “There’s nowhere in our downtown for young people to go unless they want to drink,” says John Cates, an attorney and one of the founders. He and Wafford say they looked at existing hubs like the Atlanta Tech Village for motivation. “We needed to create an environment where the best and brightest can stick around.”

Wafford, Cates and the rest of their team — all of whom are working on this pro bono — worked closely with the city of Augusta to find an open space downtown that could launch this renaissance. One of the buildings they chose is an old Woolworth department store. People can join as members and check out co-working spaces. There will be offices for rent, conference rooms, restaurants and storefronts.

Over 200 people are on the waitlist for memberships, and 40% of the office space on the second floor has been reserved. Not all of those interested are locals. Wafford says he and his team are traveling all over, including to Silicon Valley, to meet with startups. They’ve also been encouraging venture capitalists to keep tabs on their progress. The huge difference in cost in living and rental space just might persuade a few entrepreneurs to move. “The wifi is just as good here as it is in Silicon Valley,” Wafford says. “We can extend your runway by 24 months [if you move your startup] to Augusta.”

The short-term goal is to get the Augusta Innovation Zone up and running by the end of 2017. The long-term goal is to use this iZone as a model for similar spaces around the country. “I definitely think there is an opportunity to help other post-industrialized cities thrive again economically,” Wafford says. “Obviously, being able to offer startup companies an ecosystem that has access to talent and funding is a key component to their success and longevity.”

Like Augusta, these small cities now have access to world-class internet, low cost of living and plenty of empty warehouse space. Wafford hopes to demonstrate that it’s possible to thrive outside of a major metropolitan area as a savvy tech startup.

“We hope by documenting the process here in Augusta we can share our findings with other nonprofits around the nation to help build a real model for success,” Wafford says. “Long term, we hope to be in the business of nation-building from the grassroots level. I foresee a day when we have five to 10 cities a year launching the same kind of space out of old factories and gas stations and closed malls.”

This piece was originally published in Forbes. 

Denying California rail money damages more than state, it hurts the nation

By Kish Rajan

President Donald Trump has a fantastic opportunity in California. It’s a project that will create immediate jobs in construction, engineering and manufacturing, and also open the door to more high-paying tech jobs. This project offers all the things Trump promised during his campaign.

But instead of embracing the opportunity, the Trump administration is doing everything it can to stop the upgrade and expansion of the Caltrain rail service in Northern California. Last month the administration decided to withhold a $647 million federal grant that was meant to help pay for the upgrades.

Trump wasn’t alone. The entire California Republican delegation in the House opposed the federal grant as well. Rep. Devin Nunes (R-Tulare) told Politico the federal government shouldn’t be paying for a train project in “one of the richest places on the planet.”

This is a prime example of politics trumping (pardon the pun) common sense. For the moment, let’s take environmental concerns off the table – even though an electrified train system would reduce pollution and an improved rail line would get more people out of their cars and into public transportation.

From a purely economic-growth point of view, the decision to withhold this money is misguided. The median price for a home in Palo Alto (the heart of Silicon Valley) is almost $2.5 million. That puts Palo Alto, and the rest of Silicon Valley, out of reach for most people. But the tech industry is still experiencing job growth – 3.5 percent in 2016, a slower rate than in previous years but still outpacing total Bay Area job growth.

Many people are dealing with this reality by enduring “megacommutes” of more than 90 minutes each way – often from the Northern San Joaquin Valley. According to a recent study, 5.3 percent of solo drivers in the Bay Area now spend three hours or more per day commuting, compared to 4.6 percent of Los Angeles commuters.

Without upgrading and expanding the rail line, that traffic is going to get much worse. That will put tech-industry jobs completely out of reach for people living in areas like Merced, Modesto and Fresno, and take more time out of the days of hardworking people living closer to the Bay Area.

How is this a good thing?

Tech-industry jobs are among the highest paying in America. If we can move more workers, more efficiently, into Silicon Valley, these companies can grow more quickly, hire more people at good wages and expand the economy.

We want to expand access to tech jobs, not limit it. Good tech jobs can’t only be available to those who can afford to live in Silicon Valley. They should be accessible to people beyond the Bay Area bubble without commuters having to sit in their cars for several hours a day to balance work and home.

Not only will the rail line make tech-industry jobs more accessible, it will create good jobs in the short run as workers build and upgrade rail lines and cars. According to Dan Richard of the High-Speed Rail Authority, all of the steel and all of the concrete for the project is being sourced domestically. Translation: more American jobs.

When it comes to economic growth and job creation, politics needs to take a back seat. Expanding the rail lines in Northern California will help grow the tech industry, which will help the American economy.

As tech companies grow, they create jobs for people across the state and country. The sharing economy, which now provides additional income to 7 percent of the population, got its start in Silicon Valley. With more people gaining entrance to what the area has to offer, there’s no limit to the kind of job-creating companies they’ll be able to come up with.

It’s hard to start a new tech company from Modesto or Merced, but it can be easier if you have access to the money and people now populating Silicon Valley.

The tech industry is a major engine of growth for our country. It employs 6.7 million people and accounts for 11.6 percent of private-sector payrolls, according to the Computing Technology Industry Association. Let’s keep that good thing growing. To leave the work unfinished would be a blight on the whole country.

This piece was originally published in the Merced Sun-Star.

Our Plastics Glut Is An Environmental Nightmare — And An $80 Billion Opportunity

By Mike Montgomery

It’s no secret that plastic waste poses a huge threat to our environment, from overflowing landfills to the ever-growing ocean gyres. Designed to last, plastic can take thousands of years to break down. In the meantime, it’s damaging fragile ecosystems and affecting the food chain from the ocean floor right onto the dinner table.

Timothy Hoellein, a biologist at Loyola University Chicago, tracks plastic waste in the Great Lakes and its tributaries. He’s found plastic in the water, sediment and wildlife in and around the lakes. One of his more disturbing recent discoveries: Lethal human gut bacteria is somehow surviving the wastewater treatment process and reemerging in freshwater by attaching itself to plastic waste. “It should be (killed) in the treatment process,” Hoellein said. “But something about the plastic allows it to survive. We don’t know why that is. It’s worrying.”

Problems around plastic are getting worse because we have an innovation gap between the amount of plastic we use and an economical way to dispose of it. The Ellen MacArthur Foundation’s “The New Plastics Economy” report estimates the innovation gap translates to an untapped $80 billion to $120 billion annual market where entrepreneurs are needed to come up with new ways to design, dispose of and recycle plastic. As our use of plastics expands exponentially, this market is only going to get bigger.

Geoffrey Coates from Cornell University and his team of scientists are innovating in this sector. Along with a group from the University of Minnesota, the team has developed a plastic additive that will make recycling plastic easier and cheaper, and may even help create a plastic “alloy” that is lighter and stronger than its components.

Coates comes to the project with one success already under his belt. Ford Motor Co. announced last year that by 2021 it would make most of its car seats using a carbon dioxide-based plastic produced by Coates’ startup, Novomer. The easily recycled polymer is created by capturing and converting factory emissions. But, even if every car seat worldwide were made with the CO2 polymer, that would account for only a small fraction of the plastic used every year. So Coates went back to the drawing board to develop something that would make recycling all the other plastic easier.

“Basically, we’re taking what could be gasoline, making a plastic instead, and then you’re actually paying to get rid of it,” says Coates. “If you’re going to make sustainability work, it has to be economically viable.”

The main problem is that during recycling, the polymers used to make different kinds of plastic must be melted separately. A gallon milk jug created using a mixture of melted plastics — say, grocery bags (polyethylene) and take-out containers (polypropylene) — will be extremely brittle. “Pick it up and the handle is going to fall off,” says Coates.

So plastics have to be sorted by machine and by hand at the nation’s 500 or so recycling centers. But, sorting plastic waste streams isn’t easy or profitable. The result: Only a tiny fraction of recycled plastic polymers is remade into a product that has a similar value to that of the original.

Coates and his entire team looked at the problem and saw an opportunity. Using a grant from the National Science Foundation, they developed a “special sauce” that can be added to melted plastic blends. The additive, in small amounts, forces the different polymers to hang onto each other, creating an end product with good mechanical properties.

Another group building a new business in this space is BioCellection in California. Co-founders Miranda Wang and Jeanny Yao are working to change mixed and unrecyclable plastic polymers into useful — and pricey — biological products, using specially cultured bacteria.

Wang and her partner want to make used plastic too costly to throw away. “Plastics are made from fossil fuels,” Wang said. “We change the chemistry and turn it into useful things. We don’t recycle, we upcycle.” She estimates the proprietary process used by BioCellection generates 104 times more value than recycling.

The first step is using a novel chemical process, which the team is developing in partnership with Arizona State University, to turn mixed plastic waste into organic salts. Then, engineered BioCellection bacteria go to work, consuming the carbon from the salts and producing valuable lipids.

The lipids produced by the bacteria can be used in a multitude of ways, including replacing harmful chemicals now used to make textiles. That makes the end product more valuable than the original plastic polymer. Mixed or contaminated plastics aren’t a problem for the BioCellection bacteria either.

One of the best things about BioCellection is how fast it works — 12 times faster than food turns into compost. It’s also relatively cheap. Wang estimates it will cost less than half what recycling centers spend sending unrecyclable plastic to the landfill each year.

Next year, Wang’s team plans to build a desktop version of a machine that eventually will be the size of your average bedroom. The machines will be placed at recycling centers or anywhere there’s a large accumulation of plastic trash. They hope to have a pilot project running by 2019, with a full launch in 2020.

“Today, recycling centers are producing up to 200 tons of material a day that isn’t recoverable — and that’s just stuff that goes into the ‘recycle’ bin,” says Wang. “We’re reinventing that material so plastic pollution turns into valuable raw materials.”

This piece was originally published on Forbes.

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