Europe, and especially Germany, is being seen by venture capitalists as a strong second to the US as a desirable place to invest in clean tech companies, according a new survey.

The 2008 Global Venture Capital Survey, published jointly by Deloitte LLP and the National Venture Capital Association (NVCA), measured the opinions of nearly 400 venture capitalists worldwide and found that while the US continues to dominate the cleantech space other investment hubs are fast emerging.

Germany was recognised by 43 per cent of respondents as having the best expertise in clean technology, just behind the US. Other countries to receive favourable attention from investors included Japan and Brazil.

"Germany is the beneficiary of a well conceived, stable public policy that has ensured attractive markets for alternative energy technologies," said David Prend, partner of Rockport Capital. "This combined with a strong general technology base, has fostered substantial innovation in the space."

He added that this progress was particularly evident in Germany's dominant position in the solar photovoltaic market, built in large part on the back of its generous feed in tariff subsidies for householders and businesses installing micro generation technologies. "Germany, a country with marginal sun, is a leader in solar photovoltaic technology that they export to the rest of the world," he observed. "Venture capital follows quality technology and innovation. "

The UK was mentioned in the report, but as the region for biopharmaceuticals expertise another rapidly growing investment sector alongside cleantech.

"While technology innovation and entrepreneurship have largely been a US phenomenon, other countries are quietly excelling in areas that are critical to the future of venture capital investment," said Mark Heesen, president of the NVCA. "We are operating in a global economy and venture capitalists will follow the best technologies. Those countries that can marry the innovation and entrepreneurial work ethic … will become formidable economic competitors in the 21st century."