Canada’s Ocean Su­per­clus­ter: Build­ing the Ocean Econ­omy

Policy - - In This Issue - Matt Hebb

Among the five win­ners of the Trudeau govern­ment’s su­per­clus­ter com­pe­ti­tion an­nounced in Fe­bru­ary was an Oceans Su­per­clus­ter. The At­lantic Canada-based con­sor­tium will use in­no­va­tion to im­prove com­pet­i­tive­ness in Canada’s ocean-based in­dus­tries, in­clud­ing fish­eries, oil and gas, and clean en­ergy.

Canada has more ocean re­sources than most coun­tries. We have the long­est coast­line, the fourth largest ocean ter­ri­tory—in­clud­ing some of the world’s most pro­duc­tive waters—and the largest Arc­tic Ocean ter­ri­tory in the world. There are “built” ad­van­tages, too: global cor­po­ra­tions op­er­at­ing in all ma­jor sec­tors of the ocean econ­omy, ocean tech com­pa­nies who are sell­ing to the world, some of the world’s best ocean re­search uni­ver­si­ties, a mod­ern navy, and sub­stan­tial ca­pa­bil­i­ties in fed­eral de­part­ments and agen­cies.

The ocean econ­omy com­prises the com­bined ac­tiv­i­ties in tra­di­tional sec­tors in­clud­ing con­ven­tional off­shore oil and gas, ship­ping and port ac­tiv­i­ties, cap­ture fish­eries and fish pro­cess­ing, in­shore aqua­cul­ture, de­fense, ship­build­ing and ma­rine equip­ment, and ma­rine tourism. It also in­cludes ac­tiv­ity in ocean sci­ence and tech­nol­ogy, as well as emerg­ing sec­tors like ma­rine re­new­able en­ergy, ma­rine bio-prod­ucts, off­shore aqua­cul­ture, deep sea oil and gas, and ocean seafloor min­er­als.

De­mand for ocean re­sources and ocean know-how is grow­ing all around the world. The Or­gan­i­sa­tion for Eco­nomic Co-Op­er­a­tion and De­vel­op­ment (OECD) projects that the world’s ocean econ­omy will more than dou­ble in size by 2030 as a re­sult of mega-trends like pop­u­la­tion growth, in­creased life ex­pectancy, ris­ing in­comes and an in­crease in global trade. The im­pact of this growth on ocean value chains will be pro­found. Ma­rine re­new­able en­ergy is pro­lif­er­at­ing; deep and ul­tra-deep wa­ter oil and gas will grow from 3 per cent to 12 per cent of the global sup­ply of crude within 20 years; al­ready more than 90 per cent of all goods travel by wa­ter; and aqua­cul­ture—the fastest grow­ing an­i­mal food-pro­duc­ing sec­tor in the world—will sur­pass the global value of wild fish­eries within five years.

One might rea­son­ably as­sume, given all of this, that Canada en­joys great ben­e­fit from its ocean as­sets. But the truth is, we de­rive less value from the ocean than other na­tions. We’re not liv­ing up to our ocean-econ­omy po­ten­tial.

Nor­way has an econ­omy that is about five times smaller than Canada’s, but its ocean econ­omy is nearly seven times more valu­able. Nor­way’s cur­rent na­tional strat­egy sug­gests that some 25 per cent of its econ­omy is con­nected to ocean ac­tiv­ity. With per-capita GDP more than 50 per cent higher than Canada’s, it makes clear the ocean is ca­pa­ble of sup­port­ing high-value jobs and stan­dards of liv­ing. Only about 1 per cent of Canada’s econ­omy is linked to ocean ac­tiv­ity. True, Canada’s econ­omy is more di­ver­si­fied than Nor­way’s, and also true that Nor­way has amassed the world’s largest sov­er­eign wealth fund from its oil and gas re­sources. None­the­less, it is ev­i­dent that our ocean ca­pac­ity is sig­nif­i­cantly un­der-val­ued. This presents an im­por­tant op­por­tu­nity that Canada can re­spond to through in­no­va­tion, en­trepreneur­ship, and col­lab­o­ra­tion.

Canada’s Ocean Su­per­clus­ter (OSC) ad­dresses this op­por­tu­nity by do­ing two im­por­tant

The Or­gan­i­sa­tion for Eco­nomic Co-Op­er­a­tion and De­vel­op­ment (OECD) projects that the world’s ocean econ­omy will more than dou­ble in size by 2030 as a re­sult of mega-trends like pop­u­la­tion growth, in­creased life ex­pectancy, ris­ing in­comes and an in­crease in global trade.

things. First, it cre­ates a plat­form for col­lab­o­ra­tive R&D based on shared in­dus­try chal­lenges, which will re­sult in the com­mer­cial­iza­tion of in­no­va­tive ca­pa­bil­i­ties across dif­fer­ent sec­tors of the ocean econ­omy. This es­tab­lishes mar­ket “pull” for ocean in­no­va­tion. Sec­ond, it sets col­lab­o­ra­tions up for greater suc­cess by ex­pand­ing the con­nec­tions be­tween ocean com­pa­nies and the providers of in­no­va­tive so­lu­tions. The aim is to foster in­no­va­tion that re­sponds to mar­ket de­mands but also pushes the lim­its of what is pos­si­ble, or even imag­in­able.

There are at least two rea­sons why a clus­ter-based ap­proach is par­tic­u­larly promis­ing for Canada’s ocean in­dus­tries. The first is that it is costly and com­plex to do any­thing in the ocean. Sec­ond, there is sig­nif­i­cantly less pub­lic in­vest­ment in ocean in­fra­struc­ture than there is in in­dus­tries on land (e.g. roads, power grids, pipe­lines, fi­bre op­tic cable net­works, cell tow­ers, rail lines, etc.). The shar­ing of cost, ex­pe­ri­ence and ex­per­tise, as well as the distri­bu­tion of risk that comes from clus­ter-based part­ner­ships, can sig­nif­i­cantly re­duce bar­ri­ers to in­no­va­tion in ocean set­tings.

To give an ex­am­ple, all sec­tors in the ocean are united by the need for ac­cu­rate, timely ocean ecosys­tem data. Ma­rine weather, waves, cur­rent, tem­per­a­ture, the pres­ence of an­i­mal life, and other key pa­ram­e­ters are needed to pre­dict work­ing con­di­tions, plan ma­rine op­er­a­tions, and main­tain the safety of per­son­nel. Con­versely, uncer­tainty about the ocean’s phys­i­cal, chem­i­cal and bi­o­log­i­cal pa­ram­e­ters trans­lates into in­creased op­er­a­tional costs and risks for ocean in­dus­tries.

Im­prov­ing the abil­ity to char­ac­ter­ize and mon­i­tor the en­vi­ron­ment in a cost-ef­fec­tive, real-time man­ner will en­able ocean in­dus­tries to op­er­ate more pro­duc­tively and to bet­ter pro­tect and sus­tain ocean re­sources. An ob­jec­tive of the Ocean Su­per­clus­ter tech­nol­ogy strat­egy will be to lower the cost of data ac­qui­si­tion while im­prov­ing data ac­cess, time­li­ness, and qual­ity. Re­li­able, cost-ef­fec­tive and scal­able tech­nolo­gies for short- and long-range ocean mon­i­tor­ing, con­nected to real-time data in­te­gra­tion and anal­y­sis, will pro­vide a base of sup­port for greater pro­duc­tiv­ity and in­no­va­tion across mul­ti­ple sec­tors.

Com­mer­cial­iza­tion of th­ese ca­pa­bil­i­ties is ex­pected to re­flect the unique op­er­at­ing con­di­tions of dif­fer­ent sec­tors. The tidal en­ergy sec­tor, for ex­am­ple, must gather en­vi­ron­ment data through novel meth­ods that ac­count for unique site char­ac­ter­is­tics, such as poor vis­i­bil­ity, very high cur­rents, and en­vi­ron­men­tal noise. For in­dus­tries un­der­tak­ing bio­prospect­ing and sam­pling ac­tiv­ity, chal­leng­ing un­der­sea ter­rain and dif­fi­cult en­vi­ron­men­tal con­di­tions can af­fect ac­cess, sam­ple and data qual­ity, and con­fi­dence in re­sults.

Tech­nol­ogy is nec­es­sary to de­velop mod­ern, for­ward-think­ing ocean pol­icy and reg­u­la­tory frame­works. The OSC will con­trib­ute to in­no­va­tion on this front, for ex­am­ple, by ad­vanc­ing the ocean mon­i­tor­ing ca­pa­bil­ity needed to en­able ecosys­tem-based man­age­ment ap­proaches char­ac­ter­ized by su­pe­rior ev­i­dence-based de­ci­sion mak­ing. Ocean in­dus­try chal­lenges will be tack­led by in­no­va­tion providers in ar­eas in­clud­ing: en­vi­ron­men­tal ge­nomics, sen­sors, un­der­wa­ter com­mu­ni­ca­tions, robotics and un­teth­ered mar­itime ve­hi­cles (UMVs), ar­ti­fi­cial in­tel­li­gence, and data an­a­lyt­ics. This will lever­age the cut­ting-edge ca­pa­bil­i­ties of Canada’s ex­ist­ing ocean tech SMEs, and also present op­por­tu­ni­ties for high-im­pact col­lab­o­ra­tions with other su­per­clus­ters across the coun­try.

In ad­di­tion to a tech­nol­ogy strat­egy, OSC also has a strat­egy to build the strength of the clus­ter it­self—mea­sured, broadly speak­ing, in terms of its ca­pac­ity for in­no­va­tion and for en­trepreneur­ship. Per­haps noth­ing is more crit­i­cal to that ca­pac­ity than the abil­ity of the OSC to de­velop and at­tract the world-lead­ing tal­ent needed to es­tab­lish Canada’s smart ocean ad­van­tage.

Clus­ter-build­ing strat­egy will fo­cus on the re­quire­ments of a mod­ern, highly-skilled ocean work­force that is di­verse and in­clu­sive. For ex­am­ple, a global tal­ent fund will sup­port the col­lab­o­ra­tive ef­forts of in­dus­try mem­bers to at­tract the world’s best en­gi­neers, sci­en­tists, and ocean ex­ec­u­tives, while a pro­gram to ex­tend

work-in­te­grated learn­ing op­por­tu­ni­ties will con­nect ocean in­dus­tries with stu­dents study­ing in Cana­dian uni­ver­si­ties and col­leges.

Akey OSC ob­jec­tive is to cre­ate the con­di­tions for more start-ups and scale-ups in the ocean econ­omy. The OSC will work with part­ners, in­clud­ing in­cu­ba­tors, ac­cel­er­a­tors, and ven­ture cap­i­tal­ists, to sup­port growth op­por­tu­ni­ties emerg­ing from the tech­nol­ogy pro­gram. In ad­di­tion, an open-call pro­gram will pro­vide seed fund­ing for early stage de­vel­op­ment of po­ten­tially dis­rup­tive in­no­va­tions that might not oth­er­wise emerge within ex­ist­ing in­dus­tries.

The Ocean Su­per­clus­ter will en­able Canada to make bet­ter use of its con­sid­er­able and cur­rently un­der-val­ued, ocean as­sets. It po­si­tions our coun­try to join the ranks of global lead­er­ship in ocean in­no­va­tion and sus­tain­able ocean in­dus­try.

Ac­cess to spe­cial­ized de­sign and fab­ri­ca­tion equip­ment is a con­straint fac­ing smaller com­pa­nies in­no­vat­ing in any sec­tor. Ocean in­no­va­tors of all sizes face in­creased cost and com­plex­ity try­ing to ac­cess ships, UMVs, ma­rine heavy-lift equip­ment, com­puter lab in­fra­struc­ture/com­put­ing re­sources, and wa­ter­front fa­cil­i­ties as they un­der­take tech­nol­ogy demon­stra­tion and com­mer­cial­iza­tion ac­tiv­ity. The Ocean Su­per­clus­ter will es­tab­lish pro­grams to sup­port the costs of com­mer­cial­iza­tion and tech­nol­ogy trans­fer be­tween sec­tors. It will also lever­age sig­nif­i­cant as­sets like the Cen­tre for Ocean Ven­ture and En­trepreneur­ship (COVE) in Hal­i­fax, the Ma­rine In­sti­tute in St. John’s, and Na­tional Re­search Coun­cil (NRC) fa­cil­i­ties across At­lantic Canada, to pro­vide wa­ter­front ac­cess, spe­cial­ized equip­ment, and the ecosys­tem ben­e­fits of co-lo­cat­ing with a crit­i­cal mass of ocean in­no­va­tors.

The Ocean Su­per­clus­ter will en­able Canada to make bet­ter use of its con­sid­er­able and cur­rently un­der-val­ued, ocean as­sets. It po­si­tions our coun­try to join the ranks of global lead­er­ship in ocean in­no­va­tion and sus­tain­able ocean in­dus­try. We think of this as a strat­egy to move our­selves to a tech­nol­ogy-en­abled, knowl­edge-based ocean econ­omy, with the ad­van­tages and ben­e­fits as­so­ci­ated with that—greater pro­duc­tiv­ity and sus­tain­able prof­itabil­ity, higher value em­ploy­ment, ex­panded global mar­kets for both val­ued re­sources and IP-based prod­ucts and ser­vices, and higher over­all eco­nomic out­put, sup­port­ing higher stan­dards of liv­ing.

Adobe­stock photo

Canada’s Oceans Su­per­clus­ter will deal with both tra­di­tional sec­tors and emerg­ing fields such as marine re­new­able en­ergy, marine bio-prod­ucts, off­shore aqua­cul­ture, deep sea oil and gas, and ocean seafloor min­er­als.

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