The blue economy is the use of marine resources for sustainable economic development while improving livelihoods, creating jobs, and protecting and supporting marine ecosystems (Bennett et al., 2019; Smith-Godfrey, 2016; World Bank, 2017).
At its core, the blue economy is where ocean sustainability and business meet: where healthy oceans support businesses and livelihoods, and sustainable business practices promote healthy oceans and the preservation of their natural capital.
Interest and investment in the blue economy is growing, and you can seize this opportunity by developing MPA-related enterprises. In this piece we delve further into what the blue economy means, examine where MPA management fits, and discuss tools that can help you develop business ideas to generate funding from blue growth.
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What is the blue economy?
The concept of a blue economy focused on marine ecosystems has recently been recognized by governments, businesses, NGOs and others, and has become a central theme in global ocean policy debates (Bennett et al., 2019; Bethel, Buravleva, & Tang, 2021; Ehlers, 2016; Visbeck et al., 2014; Wenhai et al., 2019).
Some of the first advocates were coastal and island nations that perceived growth in coastal and maritime sectors as opportunities for sustainable development (Bennett et al., 2019). The term has now come to include international interest in the growth of ocean-based economic development (Garland et al., 2019).
In simple terms, the blue economy can be thought of as the intersection of ocean sustainability and business, although this can mean different things to different people. Some sectors see the blue economy as meaning oceans as good business, oceans as a source of livelihoods or economic activity in the maritime sector. Some focus on the oceans as natural capital, while others see oceans as a source of new wealth and a driver of innovation (Silver et al., 2015; Smith-Godfrey, 2016; Voyer et al., 2018). These understandings are by no means mutually exclusive and recent international policy initiatives have attempted to incorporate several or all of them (Voyer et al., 2018).
Although understandings of the blue economy may differ, they all place value on the social and economic benefits that are derived from healthy ocean ecosystems (Voyer et al., 2018). Equally, they all acknowledge that economies and human well-being are undermined by unsustainable practices (Phelan, Ruhanen, & Mair, 2020).
A fundamental element of the blue economy is that it recognizes the designation and delimitation of spatial boundaries in the ocean, as originally addressed in the UN Convention on the Law of the Sea (UNCLOS, adopted in 1982). The blue economy gives due recognition to exclusive economic zones, MPAs and the concept of spatial planning.
While generating wealth from ocean-related activities is a part of the blue economy, the concept involves more than just wealth generation. Empowering communities in marine and coastal management, improving social equity, and respecting stewardship of natural resources are essential components.
Where do MPAs fit in the blue economy?
Although the blue economy has been largely associated with high-level policymaking and investment (Barbesgaard, 2018; Garland et al., 2019; Mazor et al., 2014), more attention is now being given to practical applications that can lead to strong conservation outcomes.
MPAs are pillars of the blue economy. With legally mandated spatial boundaries, MPAs are tools for fisheries, marine and coastal zone management that underpin sustainable and socially equitable economic development of the oceans. By increasing the long-term benefits of the sustainable use of marine resources, MPAs are also nature-based solutions to societal challenges.
Investment into the blue economy can help finance effective MPA management and infrastructure. At the same time, MPAs can drive new opportunities for investment in blue enterprise development, such as sustainable marine ecotourism, seaweed farming, retail/merchandising and renewable energy generation. These types of businesses are low impact and high value.
The blue economy includes innovation from the ground up by communities associated with MPAs who seek to extract greater value from their marine resources. Sustainable, adaptively managed MPAs support healthy ecosystems, which in turn provide ecosystem goods and services that can contribute to value creation (whether through locally led innovation, ecosystem-based businesses or nature-based solutions).
What should MPA managers know about the blue economy and sustainable financing?
Marine natural resource managers have an important role to play in ensuring that blue economic growth is truly good for the oceans and doesn’t come at the expense of sustainability.
Being comfortable with terminology related to economics, investment and financing will equip you to participate in conversations with the private sector, politicians and development agencies about planning for the blue economy and its relationship with your MPA. Given the potentially significant amount of funding at stake in the blue economy, you’ll benefit from having a solid understanding of the principles underpinning the concept.
MPA financing mechanisms associated with the blue economy may include for-profit options such as:
Green bonds
Project-specific investments
Impact investment
Biodiversity offsets
Nature-based for-profit businesses (Spergel & Moye, 2004).
Pursuing these financing mechanisms, as appropriate to your MPA’s unique context, can help to diversify funding away from reliance on government subventions and grants. Being familiar with key financial concepts and terminology will put you in a better position to negotiate confidently.
Financial capacity building for MPA managers deserves attention, especially how to develop a viable start-up MPA-related business as part of your financing strategy. Many enterprise development efforts in the conservation world reflect a fair amount of wishful thinking, and don’t give enough attention to developing and testing sound business plans and business models.
A business plan is typically a written document describing a company's core business activities, objectives and how it plans to achieve its goals.
A business model is the rationale of how an organization creates, delivers and captures value (how it plans to make money).
Developing a business model helps you to structure a for-profit MPA-related enterprise by identifying sources of revenue, the target customer base, products and value proposition, and details of financing.
The Business Model Canvas, the Value Proposition Canvas and the Sustainable Business Model Canvas are tools that can help MPA managers develop sustainable business models and value propositions for business opportunities.
The Business Model Canvas
Having come up with an idea for an MPA-related business enterprise, there’s an excellent, single-page tool that you can use to help develop, design, discuss and test the idea – it’s called the Business Model Canvas (BMC) (Osterwalder, Pigneur, & Tucci, 2005). The BMC helps structure how value will be created and lays the foundation for a business plan. The right side of the BMC focuses on the customer, while the left side focuses on the business (see Figure 1). Both sides meet around the value proposition, which is the exchange of value between the for-profit conservation business and the customers’ needs.
The BMC provides a pre-structured canvas for the nine building blocks, as shown in the diagram. While you might intuitively start at the top left-hand corner of the canvas, the recommended order is instead to start with the customer segments and then work through the blocks in the order listed in the diagram.
Figure 2 provides an illustrated example of a BMC that aided in the development of an MPA-related business. This MPA’s laboratory sells water testing services to local hotels, resorts, restaurants and other businesses that are required by law to comply with national wastewater quality standards, and that otherwise would use private laboratories on the mainland.
Figure 2. Business Model Canvas – an illustrated example for an MPA laboratory that provides water testing services. Source: Strategyzer.com (n.d.). CC BY-SA 4.0. Adapted with permission. Example text added.
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The Value Proposition Canvas
In order to develop an effective for-profit business plan, you need to first understand your value proposition. This describes the benefits customers can expect from a business’s products and services in a way that offers superior value compared to the competition. The value proposition is central to a successful business plan. A powerful value proposition helps customers truly understand the value being created by your products and services.
The Value Proposition Canvas is a tool that helps ensure that a product or service is positioned around what the customer values and needs. It’s a key component of designing an effective business model. The Value Proposition Canvas is composed of two parts: the customer profile and the value map (Figure 3). The customer profile focuses on three key elements that should be considered when designing a business model:
Gains - understand the expected benefits the customers are seeking.
Customer jobs - understand what customers are trying to get done in their work or in their lives. This may include tasks to perform, problems to solve, experiences to have, or needs to satisfy.
Pains - understand the bad outcomes, risks and obstacles related to the customer jobs.
The value map lists your products and services, outlines how your products and services lead to customer gains, and describes how your products and services alleviate customer pains. The value proposition ensures that there is a direct connection between the customer profile and the value your business is aiming to create.
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Figure 3. Value Proposition Canvas. Source: Strategyzer.com Copyright by Strategyzer AG. Reproduced with permission.
The Sustainable Business Model Canvas
When developing a sustainable ecosystem-based business, it’s also useful to consider the Sustainable Business Model Canvas. The Sustainable Business Model Canvas helps you develop an idea for a viable business model that is also environmentally sustainable and socially equitable. It ensures that the value proposition provides measurable ecological and social value together with economic value (Bocken, Schuit, & Kraaijenhagen, 2018).
The Sustainable Business Model Canvas builds on the same nine building blocks of the Business Model Canvas. It highlights systems thinking and sustainability principles by unpacking the value proposition into people, profit and planet. The Sustainable Business Model Canvas takes a holistic approach to the relationships within and outside the business. Besides economic criteria, it focuses on ecological and social consequences, aligning with MPA management objectives.
Bringing your MPA enterprise and sustainable financing mechanism to life
Once you’ve worked through the tools to help develop your business model, there are several important next steps to take it forward, especially if you’re seeking impact investment to support the MPA enterprise.
At various stages and depending on your governance type, you will need to consult with legal advisors and the MPA board about the business model and present the findings to an investment committee. This will require clear presentations about the business plan with supporting numbers and in appropriate business language (see Module 3 Communicating sustainable financing Q&A).
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