When thinking about some of the buzzing cleantech clusters around the world, the Basque Country doesn’t often come to mind. However, since visiting the region for Cleantech Group’s bi-annual European Advisory Board Meeting, which this time was hosted in partnership with Innobasque, I have had a rapid about-face, and so should you all.

As I crossed over one of the entrance bridges to Bilbao, the main Basque municipality, one couldn’t help but notice the gigantic curved titanium exterior of the Guggenheim Museum pitted against the new high-rise Iberdrola Towers. Both act as iconic symbols of the region’s transformation from an Industrial town to an innovation hub over the past two decades.

Some of the statistics are astonishing. According to the OECD Review of Regional Innovation in the Basque Country, over 70% of the regions R&D is conducted by SMEs (firms under 250 employees), compared to under 20% for the UK. Further, the number of firms initiating R&D activities increased from 110 in 1998 to 343 in 2007. The region is also home to two Technology Corporations, Tecnalia and IK4 Research Alliance, which have over 3,000 employees with 750 cleantech dedicated researchers

The cities regeneration has also created much opportunity for cleantech as a new economic sector. Many of the large corporates have taken much interest in the development of “smart urban” environments which touches so many areas of cleantech such as mobility, energy, buildings, and waste management. Spain’s largest and most prestigious traditionally energy-focused corporates such as Iberdrola, Repsol, Gamesa, and Mondragon are reaching out of their core competencies to invest in these solutions. For example, a few months ago Spanish wind turbine corporate Gamesa launched a venture capital fund with a budget of EUR 50 million to invest in six new sectors globally: tidal power, energy storage, next generation PV, off-grid power system, e-mobilty, and energy efficiency. Iberdrola and Repsol also both have similar recent venture capital initiatives.

Many of the other elements of an innovation culture are also falling into place: a supportive government, high-class academia, and a bubbling start-up community. As part of our visit, we heard presentations from six such promising companies from a diverse group of sectors: EcoMotion, Hub Ingeinnova, HBiO, Efficient Home Energy, ABG Biotech, and Alpetek. Further, we heard presentations from the six cleantech finalists from the Cleantech Open event in Bilbao, the winner of which, PowerTrack, will soon present at the global final in San Francisco in November.

It was clear to me that the entrepreneurial spirit was very much alive and the entire region has a strong desire be recognized globally for its innovation ecosystem, particularly in cleantech. If the rapidity and quality of its industrial transformation over the past 20 years is anything to go by, then we should see many more Basque cleantech start-ups hitting the international circuit pretty soon.