6 Priorities and action areas
6.1 The preceding chapters have set out an overview of the marine economy, presenting the main structural and transitory challenges and constraints identified in the research, and summarising the main technical and financial support mechanisms that currently exist. This final chapter identifies the priority themes and areas arising from the more structural challenges that government agencies, departments, devolved administrations and other strategic public sector partners should consider to address market failures and constraints to sustainable development of the UK’s Marine sectors.
6.2 The purpose of the discussion in this chapter is to highlight where support can be focused to target genuine market failures, blockages and constraints where public sector intervention is justified, and issues cannot be overcome by business alone. It will enable the UK Government and devolved administrations to work towards realising objectives, priorities and policies (adopted and proposed) set out in a range of strategies and plans, including:
- UK Government (2018) A Green Future: Our 25 Year Plan to Improve the Environment;
- UK Government (2018) Sustainable Fisheries for Future Generations;
- Scottish Government (2019) Future of Fisheries Management in Scotland;
- Welsh Government (2019) Brexit and Our Seas; and
- Marine Plans for England, Scotland, Wales and Northern Ireland.
6.3 It is not within the scope of the work to make recommendations on potential interventions or the shape of future support mechanisms. This is a task for Steering Group members flowing from this report, and aligned work being undertaken in parallel with this research.
Summary: the marine economy in the UK
6.4 Marine sectors in the UK are an important component of the economy, helping to drive economic growth in coastal areas and through the supply chain, across the UK overall. The marine economy has great potential for future development. A number of marine sectors have demonstrated strong growth, and this can be continued with the correct support.
6.5 There are significant and emerging global drivers of growth in the marine economy and so opportunities for the UK. The key ones are increasing global demand for protein, especially fish, a demand for more plant-based food products, pharmaceuticals and cosmetics, non-plastic packaging, clean renewable energy, and increased and changing tourism, including marine based tourism. These may transform the way we look at the marine sectors, even in the near term.
6.6 However, there are undoubtedly constraints and challenges to growth and safeguarding of natural resources that must be addressed in order to realise the potential impacts and benefits from the sustainable development of the marine economy and the UK’s marine assets and capabilities. Some of these are transitory, and many are related to the continuing uncertainty and anticipated impacts of Brexit. However, many are more structural, and can be categorised across a number of capital themes:
- Access to human resources and the necessary skills and expertise to work in and develop marine sectors, in the places where it is needed – often, but not always, away from major population centres;
- Sustainable use and conservation of physical and natural resources, to underpin not only economic activity, but the social and environmental well-being of coastal areas and communities;
- Production of and access to more robust and accurate data about the natural environment and resources that the marine economy relies on, as well as data about the impact that each of the marine sectors has on the natural environment;
- The necessary infrastructure to underpin economic activity in each of the marine sectors, some of which require co-ordination across marine sub-sectors;
- Technological development and adoption to drive more efficient operations and so enhance productivity and use of resources, and conserve the marine environment wherever possible. This is critical to ensure sustained international competitiveness;
- Access to finance to fund investment to maximise opportunity and increase productivity and efficiency, to enable product or device development to demonstrate market readiness and commercial viability, and to enable scale-up of operations, especially in emerging value chains;
- The right political support and productive co-ordination and relationships between interest groups, sectors and government, often including active rather than passive market structures, to better enable sustainable development, based on robust evidence of what sustainable development actually looks like in the marine and coastal environments; and
- Addressing threats to social licence and the links between the marine sectors and communities and society in general, arising from partial knowledge and understanding of the activities undertaken by businesses, where collaborative working between industry, the public sector and communities (a triple helix approach) needs strengthening.
6.7 The following section explores areas where government intervention can address structural market failures and constraints where business action alone is insufficient to overcome challenges.
Priority themes and action areas
Recognising the interdependencies in the marine economy
6.8 Marine sectors are inextricably linked by overlapping spatial requirements, yet are not always tightly integrated and usually are subject to very different regulatory systems. There is scope for more cross-sector engagement and collaboration which would help plan and balance the different uses and users, and ensure the sustainability of the sector overall, managing environmental impacts. This will help to improve communication across industry stakeholders and strategic/public sector partners, therefore enhancing cross-sector understanding, and improving trust between sectors and industry actors. It is possible that emerging national marine plans will go some way to achieving this.
6.9 There is increasing vertical integration in commercial capture fishing, aquaculture and seafood processing value chains, particularly in England and Scotland where larger companies exist. There is a high dependency of one stage on another. Fishing is likely to be increasingly integrated with seafood processing, as traceability and control over supply become prominent. Access to ownership and financing will influence outcomes in this process, and this is a key consideration for governments and public sector bodies in terms of concentration of impacts, sustainable development and the pattern of inclusive growth.
6.10 From a public investment and intervention perspective, there are gaps in knowledge and co-ordination where the public bodies managing the shared marine resources can play a role in providing clarity. The marine space as a market place requires co-ordination, so investment in associations, regulatory bodies, monitoring and proactive spatial management would help to address this constraint to sustainable growth.
6.11 Additionally, governments and public agencies should give greater consideration to the potential for co-location and clustering of different marine uses and cross-sectoral benefits. There is an opportunity to benefit from overlapping spatial requirements, and optimise the interdependencies of different sectors, and the benefit that can be gained, e.g. marine energy and aquaculture, or using offshore wind farms to regenerate fisheries. There is also scope to consider how marine tourism can work with other sectors, for example tourism built appropriately around and integrated with fishing ports and harbours.
Recognising differences in the marine economy
6.12 Despite the interdependencies and the common challenges faced across the marine economy, there are geographical and sectoral differences that need to be recognised by any future support mechanisms and interventions. For commercial capture fishing, there are clear differences between UK countries in terms of catch, fleet size and age, and also workforce characteristics. Aquaculture is split in two ways: between the scale and maturity of the sector in Scotland versus elsewhere in the UK, and also between finfish and shellfish (this is particularly the case for Scotland, which makes up a much larger proportion of aquaculture). In processing, large companies based in England and Scotland have different needs than small and mid-sized ones found elsewhere in the UK. Similarly, for marine renewable energy there are very different support requirements for the emerging wave and tidal energy generation sub-sector than for offshore wind, which is more established.
6.13 It is critical to recognise these differences to design and deliver the right combination of support to ensure sustainable development at a regional and country level, as well as for the UK as a whole. Support should be responsive to the different needs within the marine economy and the industries and actors that it comprises. Governments and agencies should therefore give cognisance to the specific geographical and sectoral needs across the UK’s marine economy.
Co-management of resources
6.14 Taking an approach that recognises both the interdependencies and differences of marine sectors will require a strong partnership approach across the public sector, industry and research organisations, including academia. Co-managing marine resources should be a joint responsibility for all those involved. Increasing the level of industry responsibility is perceived to encourage better and more pro-active compliance and so there are likely to be benefits if public bodies encourage and enable businesses and industry representative organisations to assume more ownership and accountability for resource stewardship and management. The development of bottom-up codes of practice could be one means of achieving this.
6.15 This should extend to the development and application of circular economy principles, to reduce the incidence of marine litter, and identify uses for by-product from aquaculture and seafood processing for example. Circular economy principles are likely to be central to marine sectors but they require co-management and have potentially complex regulatory and operational implications between sectors.
6.16 Marine economy industries are developing fast, but the lack of adequate infrastructure is a constraint to growth that could see the UK lose international competitiveness. Regenerating and modernising ports is a critical area where public sector support is necessary. Some steps have been taken, e.g. through growth deals, to undertake improvements to smaller ports and there are plans for more investment and development. However, a more proactive and co-ordinated approach should be considered to overcome what is a significant constraint to commercial capture fishing and other marine sectors and uses such as cruise and other marine tourism, renewable energy and Oil &Gas decommissioning in terms of facilities that are often necessary to realise opportunities and operate efficiently and safely. Taking a strategic approach to bringing port and harbour infrastructure up to date will also address health and safety concerns, and enable a greater degree of diverse users and uses.
6.17 More broadly, governments and public sector bodies should give consideration to the wider infrastructure needs that underpin marine sectors. Whilst ports are the focus, supporting infrastructure such as transport and digital connectivity are also critical for productivity, efficiency and access to markets.
Application of technology, data collection and evidence
Enabling new technologies
6.18 Relying on out-of-date and inefficient equipment is a constraint to growth, especially for seafood production, harvest and processing. Trialling new devices and gear is a key area where government assistance is required, not just for investment but for regulatory and governance reasons. This is important if the UK is to compete in the global market place and not lag behind countries where there is support to test and deploy innovations in gear, devices and processes. This includes where there is a lack of clarity on whether testing may contravene legislation and regulation, and where it does, what mechanisms can be put in place to allow for ‘testing in the field’.
6.19 Public bodies should therefore explore ways in which there can be a strategic approach to provide the necessary frameworks, permissions and incentives for industry to trial new equipment. An example is in commercial capture fishing, where there is a reported reluctance on the part of skippers to test out new gear in ‘live’ conditions in case they contravene regulations and run the risk of sanctions.
6.20 The UK has a strength in marine economy science and research but it is not always well aligned to industry need and so does not support sustainable growth of the sector as well as it could. The public sector has a role in ensuring greater support for industry-focused and applied R&D. By ensuring that more research is planned and undertaken in partnership with industry, and focuses on identified sector-specific and cross-sector challenges, technological, environmental and marine biological constraints will be more effectively addressed which will benefit the development of the marine economy. Government and public sector agencies also have a role in supporting proactive and positive academia-industry relationships, and encouraging co-opetition between businesses to benefit whole-sector development. This may also serve to accelerate the trickle-down of technology advancements to smaller companies who may not have the resources to be actively engaged in R&D and innovation.
Data, monitoring and evidence-based decision making
6.21 There is a strong sense that whilst considerable data is collected, for example monitoring catch and fish/shellfish stock, tracking cruise ship visits and marine environment quality, there is a lack of comprehensive and robust assessment of the individual and combined impacts of marine uses and activities that can inform policy and decision-making. Currently, management is largely based on the precautionary-principle, which of course has its place. However, without a very robust and credible evidence-base, it is likely that the UK is not maximising the opportunities, and there is scope to better capitalise on our marine assets whilst still ensuring environmental sustainability and protection. More, and better, monitoring and data collection across all marine sectors will improve understanding of economic performance and environmental quality. This has been a focus of past and current interventions and support mechanisms, but it has not been undertaken within an integrated, whole-seas framework which may mean we are missing opportunities.
6.22 Greater use and availability of open data is one approach to achieving this. Similarly, greater data sharing can enable more effective planning and efficiency gains, as is the case between fishing and processing. Here, openness and sharing of data can improve the integrity of products: employing a ‘blockchain from boat to plate’ can meet the increasing consumer demand for traceability.
6.23 With specific reference to marine tourism, greater levels of research and monitoring is required to understand the impact on coastal locations. This will help to better manage the volume of visitors to these areas. Also, changing attitudes to air travel as a contributor to climate change could mean more tourism in coastal communities across the UK as tourism shifts towards UK-based and local travel. Conversely, it could also mean that fewer tourists visit the UK although there is currently no evidence of this. Improved monitoring can help destinations plan and respond to changes in visitor demands on marine and land-side areas. Government’s role here would be to ensure that research is not undertaken in piecemeal fashion, but in a co-ordinated way and to a sufficient level of robustness. This will cover planning what data is needed and at what level, and how it will be collected, analysed, used and disseminated.
Addressing the workforce and skills supply challenge
6.24 An inadequate supply of skills is a critical market failure across the marine economy. There are two key issues here: the perception of the sectors and the career opportunities available, and ensuring the skills supply through education and training provision that meets industry requirements.
6.25 Marine sectors are not often seen as positive career destinations by potential recruits and the people who influence their career choice. This is often due to out-dated misconceptions about the roles and types of tasks, the working conditions, and lack of clear career progression. In reality, there are a wide variety of roles across the marine economy and the supply chains that support each sector, as well as progression opportunities in terms of skills role development and career advancement. New technology, for example automation and digital technology, means that many of the processes and therefore tasks have changed considerably and are arguable more attractive. To attract people and to foster visibility of career opportunities and pathways, marine sectors as career destinations must be clearly communicated and reinforced amongst potential recruits, people and organisations that influence career decisions. In the case of aquaculture and seafood processing in particular, they should be promoted as increasingly technology-driven and less reliant on manual labour. This may also open up the opportunities to a more diverse workforce, for example encourage more women to work in what has traditionally been male dominated environments, and vice versa.
6.26 Allied to this, there is a priority for governments and public sector agencies to ensure that education and training provision can respond proactively and flexibly to sector needs. As there is increasing dependence on digital technology and higher-level skills, providers must position themselves to meet this need. Public bodies are ideally placed to encourage and facilitate this. Whilst the focus of this work has been on immediate issues for the marine economy, more broadly there is a need for governments and public agencies to ensure that the necessary infrastructure is in place to help attract and retain a skilled workforce in coastal areas, e.g. affordable housing, services, digital connectivity, etc.
Stimulating marine sector investment
6.27 A lack of investment and access to finance is a persistent constraint for many marine sectors. Governments and agencies should explore ways of enabling and encouraging commercial lenders to enter the market more readily. One way of achieving this is to provide investment incentives for businesses to make investment more affordable. Another strand is for the public sector to provide access to gap funding, or act as a junior lender in loan funding arrangements between businesses and commercial lenders to share the risk and so increase confidence to invest, particularly where markets are not yet commercially viable, e.g. wave and tidal energy, seaweed cultivation and harvesting. A successful example is the Renewable Energy Investment Fund (REIF) in Scotland, now superseded by the Energy Investment Fund (EIF). This type of approach may require the public sector to consider its attitude to risk differently in order to attract investors. Any risk can be offset by potential returns in turnover, employment and GVA gains.
6.28 Public sector bodies could also draw on best practice examples to actively develop financing models to engage in specific sectoral needs. This could include financing of boat purchases in the inshore fishing sector, modernisation of equipment and adoption of technology in seafood processing, or to finance growth of UK-based firms in the aquaculture supply chain. This may also extend to mechanisms such as shared ownership models for equipment, akin to the machine rings that exist in agriculture. This can help to overcome financial barriers for new entrants, or where businesses are looking to expand. Such measures will help to drive efficiency and productivity, and raise operational standards.
6.29 There is also a clear need for public agencies to work with banks and other commercial lenders to increase understanding and awareness of investment requirements across different marine sectors. At the very least, this can affect UK competitiveness against international competition where internal or externally funded players can gain advantage and crowd out UK-based businesses. Few lenders demonstrate an awareness of sector-specific investment requirements, and therefore a willingness to engage with these markets. By entering into a programme of dialogue, governments and agencies can help to overcome this information failure.
6.30 Where a critical mass and scale of development projects is a barrier to investment, public bodies can help to make investment more attractive by working with industry on the pooling of projects, for example in aquaculture, especially in England. The extent to which this requires large-scale intervention is unclear, however, and there may simply be a need for facilitation to enable project partnerships to develop across businesses – and potentially sectors as well.
Responding to and changing consumer preference
6.31 Bringing about change in consumer eating habits could expand and open new domestic markets for commercial capture fishing, aquaculture and seafood processing. Whilst industry can undertake advertising and educational engagement programmes, the degree of behaviour change required is too large-scale and long-term for industry to sustain by itself. Governments and public agencies could therefore give consideration to the ways in which it can support and encourage consumer behaviour change to drive growth opportunities for the seafood marine sectors. This also contributes to the public health and healthy eating agenda.
Change to approach of support and intervention
6.32 A key message arising from the research was that a change in the way existing financial support mechanisms operated was desired by industry. Governments and managing authorities for financial support mechanisms should therefore give consideration to the following:
- Greater access to support for start-ups and new market entrants, to foster entrepreneurship and overcome challenges associated with necessary financial outlay for entry to sectors such as commercial capture fishing or aquaculture;
- A sliding scale of intervention by business size or project contribution, to allow participation by larger businesses, where this can positively affect benefits realised through the project, and the subsequent distribution of impacts. This requires an understanding of where there are weaker points in each sector, even where there are stronger parts of the sectoral value chain; and
- Ring-fencing of support for specific sectors, so that there isn’t undue advantage for one sector or technology over another.
6.33 As demonstrated, the marine economy has great potential. There is currently a period of uncertainty, but underlying that, there are a number of structural issues that need to be addressed in order to maximise its potential. These are being taken very seriously by the UK Government and the devolved administrations. The findings of this report help to demonstrate where future action can be taken to support the economic, social and environmental sustainability of the marine economy.