Fog obscured the harbour view on Wednesday as nearly 400 people from business, government, and academia clustered inside Pier 21 for a free update on the “Oceans Supercluster.”
In what Shakespeare buffs call “the pathetic fallacy,” the day’s grey weather paralleled the verbal haze that’s blanketed the entity endorsed by Ottawa and some leading Atlantic businesses last February. Attendees have been wondering when the veil would be lifted on how to apply for hundreds of millions of dollars of private and public money pooled to develop ocean-related technologies.
The collaboration between the feds and coastal companies in the shipping, fishing, defence, and energy businesses has been hyped as having the potential to transform Atlantic Canada’s economy the way the computer chip did California’s Silicon Valley.
The federal Department of Science and Economic Development expects the Supercluster to create 3,000 jobs and create $14 billion in GDP over 10 years. In a future which a skeptical, megaproject-weary Atlantic Canadian might find hard to fathom, the OECD forecasts that the world’s ocean economy will more than double by 2030 because of trends like global population growth, rising incomes, and increased global trade.
Meanwhile, CEO Matt Hebb, who is vice president of Government Relations at Dalhousie University and who served as principal secretary to former Premier Darrell Dexter, has described the Project as a “work-in-progress” ever since Ottawa included it as one of five innovation hubs to receive a total of $950-million over the next five years. Hebb likened the Supercluster launch to “a home renovation which is a bit of a mess for a while but will eventually turn out to be beautiful.”
None of the Superclusters has finalized an agreement on how much they will receive from the federal treasury — those numbers are expected to emerge from the mists this fall. Hebb acknowledged that most of Year One of the Oceans Supercluster will be consumed by governance related to the signing of agreements with Ottawa and the five corporate players who’ve pledged to invest more than $75 million in projects chosen by them and other smaller participants in the Supercluster.
The best estimate of how much will be in the kitty when those agreements are finalized is $300-$360 million, according to Jeff White, the Supercluster’s interim Chief Financial Officer borrowed from New Brunswick’s East Valley Ventures, a successful venture capital firm. The amount is a moving target, because it depends on how many Atlantic companies sign up to become investors; the minimum amount is $250,000. That will buy a participating company a say in which research and development projects get selected. Each project must develop a brand new technology and attract a minimum of two private sector partners who will manage the project.
The top tier of companies who have invested $15 million or more in the Supercluster have the most clout in deciding which projects get funded. They include some of the usual suspects: Emera (with interests in tidal power and offshore wind), Petroleum Resources Newfoundland (a consortium of companies exploring for oil and natural gas), John Risley’s CFFI Ventures (Clearwater), and Cuna del Mar, a global fish-farming enterprise helmed by Robert Orr, a past president of Ocean Nutrition. Cooke Aquaculture and JD Irving are also large investors.
“These companies are willing to invest their money in starting more companies which will meet their customers’ needs or solve common problems,” explained Jeff White. Think of our oceans as “an under-utilized asset,” suggested Hebb to an attentive audience, compared to the “sustainable benefits” Norway has achieved through a model where industry leads a collaboration with government and academic partners. That’s the approach the Oceans Supercluster is importing to Atlantic Canada.
Hebb was asked if companies that can’t afford or don’t wish to invest money in the Supercluster can still participate. “Yes,” he answered, “there’s no requirement for companies who want to be suppliers to research projects to be members of the Supercluster.” He went a step further, suggesting that in Norway, companies who don’t invest cash can still become members by volunteering large amounts of time. Chief Technology Officer Susan Hunt committed to an “open call” for pitches of all kinds once the agency is established.
That said, the five largest private sector investors have already identified a few areas of common interest that Hunt described as “hot spots” or potential ventures worth tens of millions of dollars. She said, “the goal is to obtain faster, cheaper, better data that will result in outcomes such as improved environmental stewardship or remote-controlled operations.” She emphasized that these are early days, and all types of projects — including those involving seaweed and underwater simulations — are welcome.
In response to another question from the audience in the Kenneth C. Rowe Hall, Hebb said the goal of the Supercluster “is not to create another bureaucracy, but a lean management team,” as opposed to a cluster-suck (my term). Up to 85 per cent of the government funding is earmarked for technology development projects; the remaining 15 per cent is designated for administering and operating Supercluster programs. Nearly 100 per cent of the private sector funding will be spent on R&D. The four-person interim management team is also working on bylaws so the organization has oversight and can measure progress toward achieving its goals (something dear to the aforementioned Ken Rowe’s heart, who recently took the Dalhousie School of Business to task for failing to meet the objectives of his $15 million gift).
Hebb acknowledged that the criteria for how to measure economic impact have not yet been formulated. There’s still plenty of work and, well, plenty of fog. The immediate challenge, he says, will be for ocean companies of all sizes to start meeting and talking to one another to identify what type of research could solve common problems so that proposals can be ready to go once Supercluster agreements are actually firmed up. It will probably be early next year before the first projects get the green light.
Hebb said organizations such as the Bedford Institute of Oceanography and National Research Council (which have not been involved so far) do have “a key part to play” in providing the talent and science to make the industry-led Supercluster work. Next steps include appointing a permanent management team (Hebb isn’t sure he will apply) and a Board of Directors. The fourth and final update in this series takes place in St. John’s, Newfoundland tomorrow.