The Iceland Ocean Cluster’s mission is to create value and discover new opportunities by connecting entrepreneurs, businesses and knowledge in the marine industries.

Building Bridges with Ocean Clusters

On 28. July an article by Thor Sigfusson Founder and Chairman of The Iceland Ocean Cluster, about building bridges with ocean clusters was published on World Ocean Forum.

In this article he is challenging the startup community and the media to get excited about new ocean industry companies, new partnerships, and the benefits of weak ties.

The full article can be accessed here

Can we create more value with the Alaskan pollock?

The Alaska pollock landings are the largest of any single fish species in the U.S.   According to Undercurrent News, the price of pollock is going from bad to worse. Might the price shock of pollock filet blocks lead to something good?

In the early 1980‘s Icelanders experienced a different type of shock for the cod fishing industry as the allowable catch fell drastically. As a result, a new system of individual transferable quota system was introduced in 1990 and the industry started collaborating more with tech companies and R&D where the mission was to increase quality and use more of the fish. Do more with less! In thirty years, the dollar value of each cod has tripled in Iceland.

If we look back to the 80’s in Iceland, the liver was the only part of the rest of the by-products that had some “value.”  The rest of the fish was mostly treated as waste with no value. Since then, new markets and companies capable of handling by-products have been developed. This is still the case among global fisheries in the year 2017.

In Iceland, most development has been in the liver and omega sectors where companies in Iceland have become key players in the field; omega oil, canned products, children’s medicine. The success of the liver business does not necessarily indicate that liver is in the long run the most valuable part of the rest of the fish; liver was just in my opinion the first in line of a great many opportunities and has already been developed over a longer time than other by-products. Next in line are enzymes, collagen, proteins and calcium, to name a few. Various smaller plants in Iceland treating cod by-products are a strong indication of this coming trend: a fish leather plant, an enzyme plant, a protein plant, and an upcoming fish collagen plant.  In drying, a good example of a company is Haustak in Iceland, a leading fish drying plant that uses geothermal heat.

In collaboration with the Iceland Ocean Cluster, two large fisheries recently established Codland, a company which is creating oil and fish meal from cod’s offal and bones.  Codland’s mission is to use the entire cod – to utilize 100% of every cod.  Another example of such collaboration among fisheries and the cluster is Collagen Ltd. which aims to use fish skin for collagen protein production.

Can the Alaskan pollock take a similar route as the Icelandic Cod? There is no reason why that should not be the case in terms of the by-products of the pollock. The large seafood companies in the Northwest US are already putting significant effort into developing of products from the by-products of the pollock.  But clusters can help here.

I strongly believe that the formation of the Alaska Ocean Cluster and the Seattle Ocean Cluster will become reality in the winter of 2017-2018. These clusters could build the bridge between different parts of the value chain in the fisheries; between Universities, startups, marketing companies, designers and fisheries.  

We can see the pollock skin become collagen or leather, we could see the pollocks bones as pure calcium, the filet as pure protein for the nutraceutical market etc.  The pollock is not only 2-3 million metric tons of frozen filets and landfill; in essence it is 3 million metric tons of pure and natural protein – which by the way, is scarce in the world! Iceland has already made the change and the Alaska can as well.

Dr. Thor Sigfusson

Founder of the Iceland Ocean Cluster

 

 

Can Clusters elminate blind spots?

As a founder of the Iceland Ocean Cluster, I have had the luxury of meeting with seafood people in over twenty coastal communities in the US and Europe over the past few years. The dialogues have been extremely enjoyable and beneficial to me and have added more “hands on” experience to the issues I focused on in my PhD; how tech entrepreneurs in the seafood industry build and nurture their networks.

In my studies, I had found the seafood industry entrepreneurs to be less connected and utilised less their relationship network within the industry than did the other entrepreneurs in different sectors. The seafood entrepreneurs had also smaller network outside their home region.

To make a long story short, the visits to these coastal towns indicated a significant isolation of the seafood industry in these areas from many important parts of the seafood value chain. As an example, I visited a large university just 30 miles from a seafood town, I was stunned to see that the academics, many with great research in our field, and even business ideas, had no connection with the seafood industry next door. Seafood entrepreneurs were in very little contact with other entrepreneurs, R&D efforts, etc. Many firms are family-owned, and there is a lack of trust when the network extends beyond family and close friends.

Industries based on natural resources have acted very rationally regarding networks. As the resources are limited, comapnies tend to keep competitors away and keep their networks small. As a result, the networks in the industry are closed. In the supporting services, such as processing equipment, the access of entry was easy; a clever technician could duplicate easily the simple technology used. Where access to the fisheries was open, the same was true for the catch. As the processing technology has developed further with more IT and seafood resources are viewed more and more as high end protein for food, nutraceutical markets etc., there is shift in the industry. The shift is from natural resource-based to a knowledge-based industry. With knowledge-based industries, the more people interact, the faster the knowledge grows!

The lack of cooperation among the seafood entrepreneurs in coastal areas means there are “blind spots” in businesses – not the least of which has been the number of opportunities for future generations of well-educated people. I believe the cluster concept has a vital role to play in the trust-building of the seafood value chain in coastal communities. Both our experience in Iceland and now in the US with the New England Ocean Cluster shows a potential for relationship building in the seafood industry which can lead to more value creation. 

The existing formula for success in seafood has not included a harmonisation or strong cooperation among firms, startups, R&D and Universities. There may be an opportunity here; harmonisation can strengthen the competitiveness of the “protein industry” in coastal communities.

Our philosophy is to build a network of clusters. A crucial element there is to lean local first and then look for synergies. We know ocean clusters are not homogeneous; that is what makes them so exciting. Some may focus on seafood, others on various marine technology, aquaculture, ocean tourism and so on. It is crucial for the clusters to find their niche. However, I have emphasized that this niche is not decided at a brainstorming session at the start – it evolves as the cluster initiates different relationships and sharing of ideas – then the trends and future focus emerge.

We didnt see the green technology becoming so crucial in the early days of the Iceland ocean cluster. But as relationships developed and trust was built among tech companies more and more emphasized their strength in that field and willingness to collaborate more on environmentally friendly solutions. The same is with the focus on full utilization of seafood; it emerged through conversation among entrepreneurs.

After the initial mapping of local ocean industries and building of the local network, the global network is the natural next step. Remember we are in an industry with lots of potentials but somewhat left behind in the startup world. By creating this movement or a network suddenly interesting startups will emerge, not only as isolated islands but a part of a larger network or a movement in the ocean industry.

Thor Sigfusson

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