Marine Institute & PWC Survey on Marine Sector
Overwhelming confidence in Ireland's marine sector; Brexit a challenge; offshore wind and ocean energy a key opportunity; more investment needed. These were some of the key findings from a joint survey carried out by PwC and the Irish Marine Institute ahead of Our Ocean Wealth Summit which took place on 28 and 29 June 2018 in Galway.
An overwhelming majority (88%) of respondents representing leading voices in Ireland's marine industry are confident about the growth potential of Ireland's marine economy with one in two being very confident. Four out of five (80%) are of the view that the economic contribution of Ireland's marine industry will exceed €4 billion over the next ten years; a quarter said this contribution will significantly exceed €4 billion. The vast majority (82%) believe that employment levels in the industry will grow by at least 20% by 2030.
Declan McDonald, Partner, PwC, said: "The survey highlights the growth opportunities for Ireland's marine industry. It shows that while there are challenges, if the right investments are made including in technologies and skills, the sector can return high dividends to our national economy".
Critical factors for maintaining or increasing Ireland's attractiveness as a centre of excellence for the blue economy are our unique opportunity to develop new technology in the offshore, tidal and wind sectors (65%); Ireland's favourable and competitive corporate tax and 'tonnage' tax regimes (51%); our highly educated and young workforce (47%) and Ireland as a potential location for global shipping and maritime commerce (41%).
Dr Peter Heffernan, CEO, Marine Institute, concluded: "Our Ocean Wealth Summit highlighted the opportunities for Ireland's economy presented by our oceans and marine sector. The survey highlights these opportunities and growth potential, while also highlighting areas requiring attention, such as greater investment in port facilities, marine tourism and leisure, technologies and skills. As a sector, working together continuing to promote this important industry, I believe the Irish marine industry has a great opportunity to achieve the growth ambitions highlighted in the survey."
In a broader context, Dr Heffernan emphasised "the crucial issues of oceans' sustainability and climate change, which also present investment opportunities."
Offshore wind and ocean energy seen as opportunities but new technologies are critical
Key areas of opportunity for the sector, according to the survey, are: developing marine energy including offshore wind, ocean energy and related products/services (76%); marine tourism and leisure including cruises (59%); aquaculture, sea-fisheries and processing (55%) and shipping and maritime transport (45%).
Kim McClenaghan, Advisory Partner, PwC, said: "To realise Ireland's decarbonisation targets, we must deliver significant renewable electricity production. And due to the scale and complexity of these projects we need to look at proven, cost effective technologies.
Considering our island status and climate, this will require deploying additional onshore and offshore wind farms. While onshore is more cost effective, a combination of diminishing numbers of viable sites, planning challenges and increasing focus on carbon targets, will necessitate developing offshore wind at scale. The survey highlights Ireland's offshore potential."
The future – investment and promotion critical
Survey respondents reported that obtaining financial support for further investment to scale products/services (37%) is the single key factor for securing the future viability of their marine businesses. Other important factors to scale their businesses are penetrating international markets (25%) and access to a network of marine sector professionals to create opportunities (18%) such as at trade shows and marine business associations.
Respondents were also asked what can Government and industry do to increase private sector investment and a wealth of responses were received around the following key areas:
• Regulation: Reduce the regulatory burden including reducing uncertainty around the planning process and foreshore licensing legislation to be overhauled.
• Further investment and development in Tier 2 and Tier 3 ports.
• Skills: Invest in training and up-skilling staff; More training for young people.
• More investment in marine tourism and leisure: Respondents noted Ireland to be lacking in marine tourism investment compared to global standards and called for more funding for the marine leisure industry.
• Greater investment in future technologies including in offshore wind and wave energy.
• Tax: Respondents called for tax breaks to innovate marine operators and more reward for entrepreneurial investment as well as reducing high levels of tax on seafarers.
Brexit a major challenge
Four out of five (80%) respondents reported that Brexit will have an enormous negative impact on the Irish marine industry. The single greatest Brexit challenge, according to the survey, will be disruption, delays, additional costs and compliance due to possible border checks. Other key Brexit challenges include continued access to mainland Europe via the UK landbridge ; cost competitiveness and market diversification.
Speaking about Brexit, John O'Loughlin, Partner, PwC Customs and International Trade, said: "Given all of the uncertainties, we advise businesses that it would be prudent to plan for a potential hard Brexit. For the marine sector, which is highly export orientated, planning is essential, particularly where the UK is the end-market. In addition, planning is essential when using the UK-land bridge. A review of supply contracts will be critical when determining who is responsible for fulfilling all relevant customs obligations on import and export.
There will be a need to lodge customs declarations and manage other administration and compliance matters as well as dealing with the risk of delays at ports. But there are opportunities and market diversification is essential. Firms need to plan now for the possible interruption and disruption that may be caused by Brexit."
Aside from Brexit, half (51%) of survey respondents said that the top challenge for the development of the Irish maritime industry is regulation and licensing. Other challenges include developing an export market (45%); high personal taxes and limited 'entrepreneurial' relief (39%) and access to funding (37%).
The survey was undertaking in the last few weeks amongst attendees of the Our Ocean Wealth Summit which took place in Galway on 28 and 29 June 2018