Scottish Ocean Cluster charts a course for turning blue economy innovation into scalable businesses

Scottish Ocean Cluster charts a course for turning blue economy innovation into scalable businesses

Scotland has the marine resources, scientific expertise, and growing investment ecosystem to build new businesses around seafood byproducts and other blue economy opportunities; however, a panel at the Scottish Ocean Cluster’s inaugural summit warned that turning such promising ideas into commercially viable, scalable businesses remains a much harder challenge.

The problem isn’t necessarily a shortage of innovation, according to the panelists. Instead, it’s what happens after the prototype enters the “valley of death” for startups, when a technology needs customers, infrastructure, finance, and a route to scale.

Tidal Vision Vice President Harry Wick told the conference that a key lesson learned from the U.S.-based company’s development is that innovation alone is not enough.

Tidal Vision began with an idea around converting shellfish waste into useful products, initially expecting the market to embrace the innovation. It quickly discovered that customers were reluctant to move away from established products and suppliers. That market inertia meant the company had to become more focused on specific applications and, crucially, on developing the market for its outputs.

“Innovation is a journey,” Wick said. “It's not just one idea at the beginning. You have to keep moving.”

The company is now pursuing further opportunities, including extracting protein from wastewater generated by protein processors – turning material that was previously discharged into a potential source of market value. Wick said Tidal Vision is hoping to reach USD 300 million (EUR 260 million) in revenue this year.

Hatch Blue Co-Founder and Partner Wayne Murphy said “investability” depends on three fundamentals: a technically and commercially capable team, the ability to scale production at a viable cost, and a clear understanding of the market and customers willing to pay.

Hatch Blue receives large numbers of investment pitches, he said, but many remain a long way from being investment-ready.

“There are a lot of great ideas out there, but actually getting people wanting to give you money for what you're producing, that's when you become a business, and we don't see enough of that,” Murphy said.

The panel acknowledged Scotland has substantial natural marine resources and a growing community of investors interested in sustainable seafood and related technologies. But, connecting entrepreneurs, researchers, and capital is a challenge, one that the Scottish Ocean Cluster could help overcome through connecting different parts of the industry and wider economy, the panel said.

Paul Cantwell, Zero Waste Scotland’s lead on material value chains and byproduct valorization, said commercial viability may come from collaboration between several organizations rather than a single company.

That could be particularly important for seafood, where the fragmented nature of production can make individual side streams difficult to commercialize, he said.

“There's a real opportunity here under the Scottish Ocean Cluster to drive that ‘community of practice’ – to create camaraderie in terms of volumes of byproducts, rather than call them waste streams, and identify and prioritize where those opportunities ... exist to allow us to accelerate the adaptation and the adoption of these byproducts as feedstocks into other industries,” Cantwell said.

Murphy said the cluster can help bridge the gap between idea and viable business by helping establish shared infrastructure that is capable of processing byproducts for multiple ventures.

“It's going to be all about supporting the innovators, making it as easy as possible for them to get to creating commercial opportunity. I think that investment in that infrastructure – be it by government or be it by ecosystem developers – is going to be a critical part of driving success and utilizing again all the amazing marine resources that Scotland has,” he said.

Robert Gordon University Senior Business Development Manager Fiona Campbell said universities can help fill a business’s expertise gaps and investigate markets, address risks, and provide evidence that can give investors greater confidence.

“We have business schools, we've got the scientists, we've got the technology guys. So, whatever it is that you're missing, there's going to be somebody in the university that's going to be able to partner with you to work with that,” Campbell said. “There's money out there, but until you've got that idea and you know what the gaps are and what you need to work on, it's very difficult to go and approach people.”

Campbell cautioned that for researchers to get involved, the innovation must be different and new.

“What we're looking for is that next generation: what's not been done already,” she said. “That's where we can then help you by de-risking going for something that nobody's done yet and making sure that if you're going to put some money toward it, you're going to get some return on that investment.”

Outside the cluster, Scotland may need to challenge the secretive culture in which companies instinctively build their own facilities, Scottish Ocean Cluster Chair Victor West said.

“We may have to break some eggs as we [make] this cake,” he said. “We may have to get people to say, 'We've got a company here that's got a fantastic idea and a fantastic technology, and you've got space in your factory. Let's not build a factory for that. Why don’t we work together and actually build something together?”

The alternative, West said, is the sector ends up with a lot of infrastructure cost and with nothing fully utilized or scaled.

“That’s a challenge for us all: We need to change the culture of how we do things in Scotland,” West said. “I think that could be one of the real success points for the cluster.”

London-based seafood writer and communications consultant Jason Holland has been a contributing editor to SeafoodSource.com since January 2010. Jason has more than 25 years of experience as a B2B journalist and editor – a career that has taken him all over the world. He believes he found his true professional calling in 2004 when he started documenting the many facets of the international seafood industry and he’s particularly proud of the strong, collaborative relationships he has formed at all stages of the supply chain.