Norway is perfectly positioned to take lead positions in emerging ocean industries. This is a great area where technology and business meets.
The Norwegian economy is currently undergoing large transitions. The decisive factor was lower oil prices, but underlying that is the high cost level and falling productivity, as pointed out by the Norwegian Productivity Commission (2016).
Most severely hit is the Norwegian offshore oil and gas industry, due to project cancellations and falling investment levels. The result is rising unemployment, but also systematic efforts to reduce costs at all levels in the oil and gas industry.
Looking for opportunities
When activity level falls in our most important industry, we need to look for new strategic opportunities in related industries.
Most notably, we need to adapt and apply the strong technological knowledge base form the offshore oil and gas industry in other ocean industries.
What we see now is a reconceptualization of the Norwegian industrial space from traditional maritime and offshore oil and gas industries to the much broader Ocean Industry concept.
OECD is presenting a new report on the Future of the Ocean Economy in Korea at the end of April 2016, pointing to new strategic opportunities in ten emerging ocean industries. The Norwegian contribution has been an OECD discussion paper on ocean aquaculture (Fredheim & Reve 2016).
Strong competitive position
Norway has a strong competitive position in three ocean industries:
- Offshore oil and gas industry
- Maritime industry and
- Seafood industries.
In the large Knowledge-based Norway project, we referred to these three industries as the Norwegian Global knowledge hubs (Reve & Sasson 2012).
From a strategic portfolio point of view, the offshore oil and gas industry and the maritime industry are strongly related, both technologically and marketwise, while the seafood industry moves in a different cycle, experiencing record high world prices and benefiting from weak Norwegian kroner.
What we see now is an exciting new development in Ocean aquaculture where coastal salmon farming is moved into the open ocean, and simple fish cages are replaced by large ocean aquaculture production facilitate that are 20 times larger than coastal aquaculture farms.
Transformation of technology
There is a direct transformation from the offshore oil and gas industry. The same is taking place in ocean renewable energy, most notably in ocean wind farms. Such wind farms, e.g., on the UK sector of the North Sea, use base structures that come from offshore oil platforms, relying on both Norwegian offshore technology and energy investors.
Prototypes of ocean tidewater power plants are now being tested, relying on subsea technology form the offshore oil and gas industry.
Norwegian maritime industry already has a strong position in environmental surveillance and ocean resource regulations, and similarly Norwegian maritime and offshore industry are leaders in subsea technology that can be used in ocean exploration and seabed mining. The first diamond-mining vessel has already been delivered from the Kleven yard.
The Ocean economy
At NTNU in Trondheim, they are building a large Ocean Space Centre to develop ocean technology for multiple ocean industries, and Ocean technology is also the topic for their most successful Centre for Advanced Research AMOS (Centre for autonomous marine operations and systems).
The Ocean economy or Ocean space represents resource opportunities that largely outperforms Orbit space.
Norway is perfectly positioned to take lead positions in many or most of the emerging ocean industries.
Wave of innovation
What is needed is a wave of innovation developing new technology for related and new ocean industries. At the same time, we need efficient business models that are able to turn technology into profits.
Innovation takes place when ocean industries overlap, as we have seen between maritime and offshore oil and gas, and between offshore oil and gas and ocean aquaculture.
The ocean resources (cold and clean water) are only the starting point. It takes competence and technology to develop new business, and it takes services, finance and investments to fund and scale the new businesses.
Thus, the ocean industry field is also a great area where technology and business meets.
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This article is first published in BI Strategy Magazine 2016:
BI Strategy Magazine is a Science Communication Magazine published by the Department of Strategy at BI Norwegian Business School.