Category: Opinion articles

“The Discoveries didn’t get it right,” said Emeritus Pedro Nunes sometime in the 16th century. We are not afraid to err – but we must always be aware of not forgetting to learn from error. So in our action, Portugal will be an unstoppable wave of innovation in the new blue economy!

By Ruben Eiras – Secretary General of the Ocean Forum

The blue economy has a very remarkable growth potential, due to the multitude of sectors that make up it: fisheries, aquaculture, fish processing, ports, maritime transport, tourism, ocean renewable energies, blue biotechnology, finally. Thus, it seems that, at first glance, it is a sector prone to attracting investment and generating new business.

But that’s not quite the case. Despite regular annual growth in Portugal (up to 1% annually since 2012), according to the Sea Economy satellite account published by the Directorate-General for Maritime Policy (DGPM) and the National Institute of Statistics, and also the same trend within the European Union, the fact is that investing in the blue economy remains a high risk.

And why? First, because of the natural environment where the investment is implemented. The sea is the most hostile environment to human activity after outer space. The marine liquid environment is unstable, the salinity corrodes the materials, the pressure ruthlessly crushes while the depth increases, the communication is made primarily by acoustic signals and image visualization in physical situation of high limitation.

Second, due to the information asymmetry that exists not only in the marine ecosystem (there are still many data “gaps” about the sea), but also in the various sectors that make up the sea economy. That is, as an investor, if I want to focus my capital on ocean renewables and shipping, I will have much better information about the last sector, due to its greater maturity. But even in “Shipping”, this information is narrow, because it is an industry still very grounded in the paradigm “the secret is the soul of the business”.

To mitigate information asymmetry in the blue economy market, and facilitate an environment of trust that leads to a better connection between investors and innovators, the Fórum Oceano launched the Hub Azul Dealroom on May 22, the first digital platform for blue economy businesses in the world, in the context of its mission as responsible for the coordination and design of the business model of the Hub Azul Portugal Network, in conjunction with the Presidency of the Strategic Council of the same, chaired by the DGPM.

With almost 1100 startups listed in 10 sectors of the blue economy and with more than 1200 registered investment funds, the Hub Azul Dealroom platform works based on an advanced artificial intelligence engine that not only automatically updates the database, as well as providing a powerful “matchmaking” tool for investors with startups.

But the features do not stop there. You can have your custom company monitoring lists, investment funds and accelerators, as well as market values and investment rounds by blue economy sector, according to the categorization used by Blue Invest of the European Commission. And startups can also include a “pitch deck” in their profile to increase the attractiveness of investors, and it is also possible to identify those whose business model meets the “Sustainable Development Goal 14 – Life underwater”.

Access to the Hub Azul Dealroom is free and is a first concrete result of the PRR funding being implemented by the Ocean Forum, in the mission assigned to it as the managing entity of the Portuguese Sea Cluster and which will greatly increase the value of our services to our associates, increasingly positioning us as a business association providing value-added innovation services for the sustainable blue economy.

Proof of the trust in this navigation route is the association of Caixa Geral de Depósitos, Euronext Lisbon, Startup Portugal, Katapult Ocean, the Port of Lisbon and Blue Invest of the European Commission as “co-igniters” of Hub Azul Dealroom.

But we cannot flag in arch and forget the humility that so strategic is to build a truistic project.

“The Discoveries didn’t get it right,” said Emeritus Pedro Nunes sometime in the 16th century. We are not afraid to err – but we must always be aware of not forgetting to learn from error.

So in our action, Portugal will be an unstoppable wave of innovation in the new blue economy!

Article published in Jornal de Negócios: https://www.jornaldenegocios.pt/opiniao/colunistas/detalhe/a-imparavel-onda-de-inovaca-na-nova-economia-azul

It is the pragmatism of the entrepreneur and the investor that embodies the scientist’s passion, and makes the sustainable blue economy a reality that generates jobs and inclusive wealth.

By Ruben Eiras – Secretary General of the Ocean Forum

Blue biotechnology is propagated as a promising area for sustainable development and innovative growth of the Portuguese sea economy. Indeed, the potential of its applications is immense: food, cosmetic, pharmaceutical and even industrial. In addition, it has the special particularity that many of these applications can be performed in a controlled environment, with laboratory replication and with a minimum extraction of biomass from the ecosystem. And it is also an area in which Portugal is strong scientifically.

However, despite all these advantages, the fact is that the blue biotechnology sector is slow to deliver commercial value in relation to the expectations created. Let’s look at investment numbers and trends. According to the latest data on the Azul Dealroom Hub, the digital ecosystem platform that connects investors with entrepreneurs managed by Fórum Oceano under the PRR Hub Azul project, the business market value of the blue biotechnology sector does not go beyond 838 million euros – in contrast, compared to another emerging sector, the blue renewable energy, this is already at a market valuation level of 6.9 billion euros. In addition, in the Blue Invest Report 2022, published by the European Commission and conducted by the PWC Portugal team, the blue biotechnology sector is one in which investors expect to reduce their exposure over the next three years.

How then to explain this apparent disconnect between the high public perception about the viability of blue biotechnology and the trend of retraction in the investor community? First, it is necessary to take into account that there is usually a temporal “decalogue” of delay between the moment of investors’ decisions and the public perception of a row. That is, usually investors, being much closer to the dynamics of reality on the ground, anticipate the installation of the dominant trend. And what we’re seeing in the blue biotechnology row is exactly this behavior.

The high risk of blue biotechnology
Second, what are the causes of this downturn? The blue biotechnology sector is not immune to the dynamics of events in other areas of biotechnology. That is, the conviction of the entrepreneur Elizabeth Holmes regarding the business model of her startup Theranos printed in the market a “hyper-elevated” risk profile to investments in biotechnology. This means that the investor will play a highly prudent and conservative role in analyzing biotechnological business models.

Moreover, in the particular case of Portugal, the current business ecosystem for blue biotechnology is narrow and low-scale. With the exception of food, our country does not have large companies with high-scale investment capacity and long-term “marathon” in the cosmetic and pharmaceutical sectors, for example.

B2B: the strategic market to explore
So it means we should just put blue biotechnology aside and focus on other sectors of the blue economy? Nothing like that. The reality indicates that it is crucial to identify in which areas of the value chain of the blue biotechnology sector Portugal should position itself strategically.

Data from the Hub Azul Dealroom platform will help us identify possible routes. When analyzing the information in the list of companies by biotechnological sector focus, it appears that most of them and with higher appreciation is located in the food sub-sector, especially in the manufacture of new food products, for the B2b market.

Therefore, one of the strategic “insights” possible from this information is that Portuguese startups should focus their efforts on blue biotechnology on innovation for the creation of “food components” for use in the manufacture of final food products. For example, creating an algae meal for application in energy bars, breakfast cereals or pet food.

At first glance, this reading can be interpreted as unambitious, simplistic and low sophistication. But at the end of the day it is the business model that is working and monetizing science that founds entrepreneurial initiative – it is the pragmatism of the entrepreneur and the investor that embodies the scientist’s passion, and makes reality the sustainable blue economy that generates jobs and inclusive wealth.

Article published in Jornal de Negócios: https://www.jornaldenegocios.pt/opiniao/colunistas/ruben-eiras/detalhe/mercado-b2b-alimentar-e-a-chave-da-biotecnologia-azul

We have a business model that monetizes the health of the ocean: decarbonize energy and restore the health of the sea, with an exporting industry of ESG technology generating profit, employment and taxes for the financing of the democratic social state.

By Ruben Eiras – Secretary General of the Ocean Forum

It is a scientifically proven fact and not just “wishful thinking”: floating offshore wind are real accelerators of new marine natural capital, in addition to the production of electricity and (potentially) renewable hydrogen. This is the conclusion that the group of researchers at the University of Minho withdrew from the research: about 50 new species use mooring and floating infrastructures to shelter and multiply.

This finding is very important, not only because it proves the positive ESG impact of the emerging ocean renewable energy industry, but also because it opens up new prospects for sustainable industrialization of the Portuguese sea and its “project Finance” strategy sustainable: that is, combining floating offshore wind with the emerging sector of artificial reefs will increase the ESG impact of infrastructure, through the simultaneous effect of energy substitution (decarbonized cash-flow), of the growth of marine biodiversity (ESG impact generates the growth of fishing stocks) and the increase of the ocean capacity of carbon sequestration (if the reef bio-design allows the emergence of macroalgae forests, more attractive will be the investment for trading in the CO2 credit market).

In other words, with this integrated approach to ocean renewables and artificial reefs, the application of the “Theory of Change” in use by the European Investment Fund is maximized with regard to the quantification of the link between profit performance related to ESG performance: The more energy produced with floating offshore wind (sales) will not only decrease the consumption of fossil sources (substitution effect with ESG impact), but also increase marine biodiversity and the ability to capture blue carbon (second and third cumulative ESG impacts).

The opportunities for Portuguese companies
And now to numbers. According to data from the Blue Hub Dealroom platform managed by Fórum Oceano, we are dealing with two sectors that represent a giant opportunity for Portugal, of two natures: the business market value of the ocean renewable energy sector is already 6,9 billion euros, and is in a pre-commercial phase; the emerging sub-sector and “Early Stage” of artificial reefs and foundations for offshore wind, in the category of Environmental Restoration, with only 3 startups identified, already have the friendly business market value of 185 million euros.

In addition, according to the European Commission’s Blue Invest Report 2023, the trend is to increase the exposure of investors in these two sectors over the next 3 years, with the oceanic renewable energy being the second, in a total of 10 rows, which will attract more capital.

But what industrial value chain should Portugal bet on? In the artificial reefs sector, with the country having strong companies in civil construction and maritime-port engineering, it will still be in time to position itself for an integral domain of the value chain.

In the field of ocean renewable energies, the positioning opportunities are more diverse, but also with much greater complexity in the choice. Analyzing data from the Azul Dealroom Hub platform, in addition to the obvious production of offshore wind components and platforms, there are three other niches still with apparent space: digital services (artificial intelligence and big data) and robotics for the operational management of floating wind farms; technological optimization of maintenance operations vessels for offshore wind; foundations for offshore wind that regenerate the marine ecosystem.

With the auction of floating offshore wind on the horizon, the transformative impact of this opportunity is clear to Portugal – we have a business model that monetizes the health of the ocean: decarbonising energy and restoring the health of the sea, with an industry exporting ESG technology generating profit, employment and taxes for the financing of the democratic social state.

Article published in Jornal de Negócios: https://www.jornaldenegocios.pt/opiniao/colunistas/ruben-eiras/detalhe/monetizar-a-saude-do-oceano-com-as-eolicas-offshore