For many years, Blue ocean companies like Statoil, Atlantis, Siemens and Wavestar have explored the treasures of the Blue Ocean to generate new sustainable business models.
In fact they are start-ups searching for a sustainable model. How do they truly add value? What do we learn from those companies? Will they disrupt the status quo? You can get a good understanding by using the business model canvas as a tool for understanding and map out an eco-system like the Blue Ocean. A tool like the business model canvas can help you to not understand a single company but a whole ecosystem like the Blue Economy.
The Blue Ocean as an economic force
This century the ocean is becoming an economic force. The drivers are many and varied, but have their origins in our growing familiarity with the ocean environment; new technologies that make it feasible and economically viable to tap ocean resources; the search for food security and for alternative sources of minerals and energy, among others. We clearly see a trend of expansion and acceleration of human activity in and around the ocean.
Alongside established ocean industries, emerging and new activities—offshore renewable energy, aquaculture, deep seabed mining and marine biotechnology are often cited—will bring new opportunities, growth and greater diversity to the ocean economy. Governments are playing a key role in driving growth. Through new national ocean development plans, countries are turning to the ocean as a “new” source of jobs, innovation and competitive advantage
What is the Blue Economy?
There is another, very important dimension to future growth in the ocean, and that is the so-called “blue economy” (or “blue growth”). The concept has its origins in the broader green movement and in a growing awareness of the heavy damage wrought on ocean ecosystems by human activity such as overfishing, habitat destruction, pollution and the impact of climate change.
A tinge of “blue” can be found in most new national ocean strategies and policies, in some more explicitly than in others, as governments signal an intention to promote a more sustainable balance between economic growth and ocean health. Much of the wider ocean discourse has also gone “blue”—even if there are plenty of different views of the concept and there is no widely agreed or consistent definition.
How companies add value in the Blue Economy?
The Blue Economy represents a gross added value of almost €500 billion per year in Europe. The Blue Economy has the potential to create smart, sustainable and inclusive growth that is compatible with environmental objectives and the ecosystem approach. To unlock this Blue Growth potential it is crucial to understand how value is created, delivered, and captured today, and what the growth potential is.
Within the MARIBE Economy project, 30 companies and their business models were mapped and assessed in order to create this understanding. 22 companies were Blue Growth companies, in the Blue Growth sectors Renewable Energy, Aquaculture, Marine Biotechnology, and Offshore Mining. The companies we researched are
Ocean Renewable Energy: Scotrenewables Tidal Resources Ltd. (tidal energy), Atlantis Resources Ltd. (tidal energy), Wavestar Energy (wave energy), Carnegie Wave (wave energy), Siemens Wind Power (wind energy, fixed), Dong Wind Power (wind energy, fixed), Statoil Hywind (wind energy, floating), Principle Power (wind energy, floating);
The MARIBE Economy Sea Chart shown here illustrating how value is created from a business model perspective. This Sea Chart shows each of the sectors and the individual companies that were studied.
Four things we learn from 30 Blue Ocean start-ups
Through analysis of the business model canvas we identified so called elements or characteristics in the business models. In other words, starting up a venture in this eco-system requires the following:
1. Partnerships are a must have: The start-up companies need support in the eco-system through strategic suppliers, access to markets, funding, knowledge, co-development and sharing resources;
2. Ambitions need to be long term: Exploring a new business model in the Ocean, one needs a long term vision. It will take research, development and time to develop the technology and the new eco-system to operate in. These companies all have winning ambitions to disrupt the status quo;
3. Prototyping is a core capability. Part of the business model is the technology that is required to e.g. create tidal energy or off shore wind energy. Companies have different technology but they all have prototyping skills;
4. Subsidy as a starting revenue model. To explore a new industry like the Ocean requires time before a sustainable business is found. As a start it requires Governments who believe in exploring new areas even before businesses or investors step in.
How to understand 30 Business Models in the Blue Economy?
A selection of companies to study was made by our team of experts. For each company we filled out the business model canvas of their current business. We studied their website, their online presence in journals and magazines and drafted the first version. We validated the business model with the team of external experts first and then with the CEO or representative of the company.
We have learned that the level of information you can obtain through different resources is enormous. The business models presented to the CEO’s and representatives of companies were in depth and they were surprised to see the structured and detailed approach. However, the true value comes through a strategic conversation with the company.
In my next blogpost I will dive deeper into the Ocean. I will show you how you can rank the level of Growth of these so called start-ups by applying the Investment Readiness Level designed by Steve Blank.