Lack of access to funding is preventing blue economy startups to grow, and hindering the development of ground-breaking technologies which are crucial for preserving marine biodiversity, and for mitigating the effects of climate change
Thousands of small and medium sized enterprises (SMEs) and startups across the blue economy are struggling to get the investment they need to scale their businesses. This is according to EU-funded international business network Funding Atlantic Network for Blue Economy Technology Transfer (FANBEST).
The role of the blue economy is viewed as critical in mitigating the effects of climate change and preserving marine biodiversity. FANBEST estimates that Europe’s blue economy employs some 5.4 million people, generating a gross added value of almost €500 billion a year, rising to €24.5 trillion globally, and offering huge potential for further job creation and economic growth.
The European Commission and the European Investment Fund have taken steps to promote investment in the blue economy through their BlueInvest initiative, which includes the BlueInvest Fund, launched two years ago.
But according to David Rodeiro Pazos, coordinator of FANBEST and member of the Research Group of Applied Financing Assessment at the University of Santiago de Compostela, Spain, growth opportunities for SMEs in the sector are not being maximised, due to a lack of knowledge of available funding opportunities, limited access to research and technology, as well as unawareness among investors about the needs of these businesses and the technology transfer potential.
He says: “Blue businesses, which include those that provide marine renewable energy, aquaculture, mariculture, coastal tourism and marine biotechnology, are vital to the long-term success of the blue economy, but many businesses in this sector are facing barriers to growth.
“We must nurture the potential of blue economy businesses and coordinate transnational efforts to enable them to make the adjustments necessary to accelerate their development.”
FANBEST was established in 2019 with funding from the European Development Fund and the network’s member partners with the objective to help grow the sustainable maritime economy.
The project, which is supporting 13 businesses, is running until July 2023 but Rodeiro Pazos says its member partners, which include academic institutions, chambers of commerce and private companies, were discussing ideas for how to continue this work with the European Union.
“The EU is calling for a transformation of the economy and the European Green Deal, in particular, has been a big driver for initiatives such as these,” he explains. “We work with these businesses to help them get the funding and training they need to get off the ground and, although economic indicators are imperative, we also look at other metrics such a sustainability, pollution and how they contribute to the circular marine economy.”
Blue economy businesses that have benefited from FANBEST’s support include UK-based tidal technology company HydroWing, as well as Spanish Bioprana, a sustainable biotechnology company and SEAentia, a Portuguese sustainable aquaculture firm.
Early seed funding
The lack of investment in sustainable blue economy startups and SMEs has been echoed across the industry. In a recent interview with Impact Investor, Romain Charraudeau, director of partnership and transfer for innovation at IFREMER, the French ocean science research institute, said that there were thousands of innovative blue economy businesses in desperate need of funding, particularly those in the early stages of development.
He said: “Although we have helped to finance some startups, as a scientific research institute, our core mission is to help entrepreneurs and businesses with the science that will allow them to develop technologies that will sustain and regenerate our oceans in response to overfishing, pollution and climate change.
“There are so many great technological innovations out there, but they need finance to bring them to the market, especially early seed finance,” he added.
- To raise awareness of the growth potential of blue economy businesses, the Greater Manchester Chamber of Commerce, one of the FANBEST partners, is hosting a virtual seminar on 25 March.
- Next week, on 28 March, BlueInvest is hosting an event in Brussels and online, bringing together participants in the blue economy, including innovators, entrepreneurs and enablers.