Provincial government makes commitment to marine technology sector

Innovation, Trade and Rural Development Minister Kathy Dunderdale said today that the provincial government will invest a total of $1.5 million over five years to help implement an aggressive marine technology development strategy for the province.

"One of our natural strengths is our affinity with the ocean and our marine sector. Through our rich maritime history we have amassed a tremendous amount of knowledge and expertise in this field," said Minister Dunderdale. "Newfoundlanders and Labradorians have applied that knowledge to the field of marine technology and our expertise is being recognized internationally. We have to build on that momentum and, through cooperation with our partners, position the province as a worldwide leader in this field."

The main elements of the strategy are:

• enhancing market intelligence and marketing capabilities;
• enhancing commercialization capabilities;
• strengthening business skills;
• creating new companies;
• attracting or growing large anchor companies;
• facilitating access to financing and capital;
• filling critical skills gaps;
• building strategic partnerships;
• stimulating business growth; and
• providing strong provincial leadership to seize opportunities in this sector.

"Industry is eager for the provincial government to assume the leadership role in establishing Newfoundland and Labrador as the Canadian centre of excellence in marine and ocean technology, and building upon the province�s considerable infrastructure and world-renowned capabilities," said Minister Dunderdale. "As a government, we are excited about being a champion of this sector and making the financial commitment to its further growth. We look forward to working with our federal government partners, such as ACOA, Industry Canada and the National Research Council, as well as the City of St. John�s, post-secondary institutions and other groups to bring this strategy to fruition."

The federal government and several provinces have identified marine technology as a significant growth sector. Globally, the marine and ocean sector is valued at $1,100 billion and has been growing at an overall rate of three per cent. The Canadian marine sector accounts for approximately $20 billion. Given, Newfoundland and Labrador�s world-class infrastructure and our proven capabilities, there is a window of opportunity for the province to establish itself as not only the Canadian centre of excellence in marine and ocean technology, but as an international leader in this rapidly expanding sector.

Media contact: Lynn Evans, Communications, (709) 729-4570 or (709) 690-6290

• The marine technology sector refers to the industry and supporting infrastructure that facilitates the utilization of ocean and coastal resources by developing, producing or adding value to products and /or services based primarily on technological and business innovation.
  
  
• The marine economy is valued at $1,100 billion and has been growing at an annual rate of 4.3 per cent. The Canadian marine economy is worth about $20 billion and is averaging a 4.8 per cent growth rate. The study found that marine-related activity within Newfoundland and Labrador is valued at $1.2 billion or 12 per cent of the provincial economy and may be as much as 25 per cent of Gross Domestic Product (GDP), or $2.4 billion if indirect and associated activity such as supply, distribution, manufacture and professional services is included. Marine-related activity is extremely important to the province.
  
  
• While Canada's marine sector has been growing at an average of 4.8 per cent each year, the marine technology component of the sector has been growing at about 1.5 times this rate, at 7.2 per cent. The sector has become increasingly important due to increasing global trade opportunities, the support of government to diversify and build the sector and leadership from a generation of highly-educated and motivated entrepreneurs.
  
  
• The marine technology sector consists of companies and organizations involved in a range of technologies and applications, including communication, navigation, fish harvesting and processing, remotely-operated vehicles and biotechnology. In total there are 500 firms employing about 70,000 people in all sectors of the economy, including oil and gas, marine transportation, fisheries, defense, marine recreation and environmental services.
  
  
• The Newfoundland and Labrador marine technology sector consists of 33 active companies, two thirds of which generate more than 90 per cent of their revenue from marine activities. Most of the companies have been in business for 6 - 15 years and have developed a wide range of technological competencies. Several are innovative leaders in their fields:
  • cold ocean engineering, research and development;
  • hydrodynamic testing;
  • integrated navigation and control systems;
  • acoustical, optical, electromagnetic sensors, transducers and related instrumentation;
  • specialized radars and other remote sensing systems; and
  • robotics and intelligent systems.
    
    
• Virtually all companies focus on niche markets. All are export-oriented; only 20 per cent rely on domestic markets. Total annual sales for these companies are approximately $117 million ($3.8 million per company), with sales growth of around 16 per cent annually in the last three years. Employment is equally impressive, with annual growth rates of 17 per cent each year: today the marine technology sector employs approximately 880 people.
  
  
• The marine technology sector is achieving results due to a number of Newfoundland and Labrador strengths. The province is home to a large array of specialized world-class infrastructure and leading-edge institutions, such as:
  • Ocean Sciences Centre
  • Ocean Engineering Research Centre
  • Marine Institute:
    • Offshore Safety and Survival Centre
    • Centre for Sustainable and Aquatic Resources
    • Centre for Aquaculture and Seafood Development
    • Centre for Marine Simulation
  • C-CORE
  • Canadian Centre for Fisheries Innovation
  • National Research Council's Institute of Ocean Technology
  • Northwest Atlantic Fisheries Centre
    
    
• This infrastructure is backed by world-class business support agents, such as:
  • Canadian Centre for Marine Communications - support for entrepreneurs
  • Genesis Centre - an incubator of new innovative businesses
  • BRIDGES - a technology alliance building and marketing initiative
  • Oceans Advance - an NRC supported clustering initiative
  • Industry associations:
    • Newfoundland Alliance of Technology Industries (NATI)
    • Newfoundland Ocean Industries Association (NOIA)
    • Newfoundland Environmental Industries Association (NEIA)
      
      
• Tied into this network are companies that have developed established products and export experience. There is an openness to develop intra-provincial and inter-provincial collaborative relationships to expand the marketplace and win international contracts.
  
  
• A comparison of countries with large primary wealth-generating marine sectors reveals that they have built strong marine technology capacity to meet domestic market requirements and then used this base to compete and grow export markets. Historically, countries like Germany, Norway, Iceland, Japan and the United States have built large diversified companies. Emerging countries like Australia, New Zealand and Ireland are aware of the economic potential and technological advances in the marine environment, giving rise to new marine economies. The development of the marine sector has been frequently influenced by governments, not only because of the sector�s direct economic contribution but also because it serves as a catalyst and anchor for the development of innovation clustering.
  
  
• INTRD is putting forward a strategy to continue to grow the marine technology sector. An essential part of the strategy is to focus on small business and the commercialization of new products and services, because the province benefits much more when companies achieve commercial success and grow their markets. The government of Newfoundland and Labrador wants to improve the rate of new company formation and survival, promote the growth of the marine economy and capture a much greater share of emerging domestic and global opportunities.
  
  
• The elements of the strategy are:

1. strengthening business skills - training and mentoring
2. seeding new companies - communications and seed funding
3. developing anchor companies - mergers, acquisitions and investment attraction
4. facilitating access to financing and capital - benchmarking and promotion;
5. enhancing market intelligence and marketing capabilities - trade shows/ missions and the creation of a market information clearing house;
6. enhancing commercialization capability - establish or support a Commercialization facility
7. filling critical skills gaps - focus attention on the problem at the national level; advocate for cooperation between provinces to identify gaps/ shortages early, boost enrolment, identify emerging new requirements and establish new programs; monitor skills requirements in the Newfoundland and Labrador marine technology community and report to government
8. building strategic partnerships - funding assistance to facilitate partnership-building and utilization of MOUs (e.g. Ireland, South Coast of England, Quebec, British Columbia)
9. enhancing growth-transitioning skills - access to resources needed to facilitate growth transition by attracting new investment and building strategic partnerships; provide transition skills as part of the mentoring program
10. building synergies and collaborative relationships - recognize and support industry advocacy groups (e.g. Oceans Advance)
11. promoting awareness and recognition - highly-focused promotions and branding program
12. providing leadership - champion the province's capabilities and work with the federal government

2004 11 02                        11:40 p.m.