The Road to Job Creation is Paved with Green Small-Cap Stocks

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On Thursday I stated that job creation will be one catalyst that will bring renewable energy infrastructure back into the spotlight in 2010.  This job creation is going to come from innovative, small-companies just like it has in the past – and that means small-cap stocks like Chinese wind turbine manufacturer A-Power Energy Generation Systems (Nasdaq: APWR).  I featured this company in yesterday's article.

Don't be fooled by this company's name, renewable energy is a global industry and even small foreign companies like A-Power are creating jobs for Americans.  A-Power's new plant in the U.S will employ over 1,000 workers, not to mention those who will be hired to engineer and build the factory, and those who will eventually install and service turbines on U.S. soil.

With the official rate of unemployment at 10.2% and the broader U-6 rate at 17.5%, President Obama is focused on real job creation going into 2010.  But the old rules from the last three decades of a consumer driven economy don't apply now – we are in an economy of slow growth that will only recover when value is actually created, not just consumed.

And several industries that have been reliable job creators – the auto, financial, and residential construction industries to name just a few – are unlikely to grow at a rate that will absorb the hundreds of thousands of unemployed.

Renewable energy and energy infrastructure fits the bill for a somewhat bleak economy.  It is an exciting, innovative industry that will create a diversity of jobs - or more accurately, careers – for decades to come.  It will spur growth in many sectors of our economy, ranging from engineering to construction, technology development to manufacturing, and venture capital to financing.

The renewable energy boom will be led by big ideas and innovation that will come out of small companies, just like it has in previous periods in America's past.  And that means small cap stocks will be a leader in the segment – many companies that go public with an initial public offering (IPO) begin as small-caps.

Some small-cap energy stocks have already seen their stocks skyrocket and now have market-caps over $10 billion.  Solar energy company First Solar (Nasdaq: FSLR) debuted via an IPO in November of 2006 at $24.50 a share – now investors can sell the stock for $121, a 394% increase.

Here in SmallCapInvestor Daily, I am constantly on the lookout for entrepreneurial companies that have the potential to grow into the next First Solar, or even Hewlett-Packard (NYSE: HPQ) or Apple (Nasdaq: AAPL) – two companies that reshaped the technology and computer industries in the early stages of development. 

My goal is to find these emerging gems, and bring them to your attention before they become the darlings of Wall Street.  The companies with the greatest potential I include in the SmallCapInvestor PRO portfolio which is available to subscribers.  You can check out my SmallCapInvestor PRO service without risk or obligation by following the link at the bottom of this article.

Hewlett-Packard and Apple have something else in common besides being great examples of amazing small-cap success – they were both innovative companies that were launched right after bad economic times.  Sound familiar?

Hewlett-Packard was started in 1939, right after the Great Depression, in a garage in Northern California.  And Apple sprouted roots following the mid-1970 recession – receiving venture capital funding that would help to create jobs and lay the foundation for the company's growth in the 1980's.  In fact, the growth in Silicon Valley occurred during the same period.

The same momentum is building right now for renewable energy technology.  Innovation, job creation, and massive growth potential for small-caps have historically come soon after recessions like the one we've just had.  This is when the going gets tough, but the tough get going – and they build the companies that go on and achieve greatness.

Many of these companies are not yet public.  A recent article in BusinessWeek featured 25 private companies that the publication finds to be the most intriguing new business – 7 of those companies, a full 28%, are engaged in emerging renewable energy or clean technologies.

However, there are a number of high potential renewable energy companies that are public, but that don't get a lot of press coverage.  In fact, I recently put together a special report on three small-cap companies that are growing rapidly and providing jobs in the alternative energy industry, including wind, solar, and landfill methane.

These companies have the potential to grow into large-caps in the next 5-years as the renewable energy sector grows.  They are featured in my Special Report: Alternative Energy Investing: 3 Top Stocks Set for Profits.  You can receive your complimentary copy of this report by signing up for a no risk trial to SmallCapInvestor PRO.