While the contribution of services sectors in general is rising for most of the countries of the world, marine services segment exhibit significant potential for growth in the future. In the context of blue economy these sectors assume higher importance. As the magnitude of investment is expected to rise in view of increasing blue economy orientation in the coastal countries, in-depth analysis of the potential and prospects of marine services is important. Major services sectors include ports & shipping, tourism, banking and financial services, transport & logistics, marine commerce, ICT, and others. In the tourism sector, leisure cruise, coastal tourism, bird watching, angling, fishing and other related services have huge potential for wage-employment in local areas and foreign exchange earnings. As blue economy policies are implemented fully, the need for project financing, term financing and brokerage services would grow. This, in turn, would require a deep marine banking and financial services sectors. Moreover, the resources needed for financing deep sea mining projects may be large which can help prosper investment banking. Likewise, other sectors of marine services will also deepen in the future.
Ports & Shipping
With expansion of seaborne trade port development assumes importance as a blue economy sector. World container throughput has increased over the past few years. Demand for large vessels and increasing use of dry bulk cargo puts emphasis on concerted efforts towards capacity expansion and modernization of ports. In a regional context, ports are treated as shared infrastructure which would lower transaction costs and facilitate smoother flows of goods in the region. Further, there are many countries such as Hong Kong, the United Arab Emirates, Tanzania, etc whose port facilities are primarily meant for transit facilities and services to other countries trading through those routes. In the blue economy framework, countries may tend to develop their own ports and focus on long-distance shipping thereby affecting the services of the transit ports. However, a protagonist view favours capacity expansion in the sense that more ports may intensify seaborne trade and services across the region with insignificant effects on the businesses of the transit ports. Ports would become the nerves for numerous blue economy activities and services in shipping and ancillary sectors. Besides ports, shipping in general may get renewed focus in the region due to blue economy orientation. Investment opportunities in ship building may grow as the demand for new varieties of ships catering to traditional shipping, ferry, small cruise and other forms of marine tourism is likely to grow in the future.
Coastal tourism, a major sector of blue economy, presents huge potential for job creation and economic growth. Experiences of littoral countries indicate that costal tourism goes hand in hand with global tourism. Growth of coastal tourism has reached its peak in recent decades. In the EU, this segment is counted in the EU’s Blue Growth Strategy as a sector with special potential to foster smart, sustainable and inclusive Europe. It is the biggest maritime sector in terms of gross value added and employment generation. In countries like Ireland, the water-based tourism and leisure industry is quite substantial in terms of value addition and diversification. It is an outcome of a set of concerted policy measures that address the potential and constraints in promoting the marine tourism sector. Sea angling, bird watching, boating at sea, dolphin watching, scuba diving, swimming in the sea and other related activities around the sea are some of those emerging segments of coastal tourism. Hotels, motels, water sport, cruise and restaurants are potential segments for expansion and growth in the coastal tourism sector. The flora and fauna spreading over the littoral states of the Indian Ocean provides biggest opportunities for investment in the tourism sector which in turn would contribute to more robust blue economy in the region. At the same time, the adverse effects of expanded tourism activities have to be monitored regularly to optimize welfare effects stemming from the coastal tourism sector.
In several littoral countries, fast growth of urbanization along the coast line is the contribution of the blue economy paradigm. However, uncontrolled rise of urbanization has detrimental impact on the economy. From different perspectives, urbanization should be considered as a positive logical transition for a country along the development path. However, unplanned urbanization in different parts of the world have caused serious damage to the living habitat, land use pattern, spatial congestion due to migration from rural areas, spread of slums, heath risks arising from poor solid waste management and a variety of governance challenges. As a result, urbanization invites more negative connotations than positive ones in the contemporary literature for the developing and less developed countries. However, blue economy policies seem to have more positive propositions in favour of urbanization. In precise terms, promoting coastal urbanization by subscribing to the core principles of sustainable, low-carbon and eco-friendly processes and technologies would eliminate the established fears associated with the business-as-usual approach toward city planning. There is a need to switch from production-led urbanization to tourism-led urbanization in which a city would rather serve as a space for consumption and leisure than for production. In the blue economy framework, coastal cities can be viewed as a source of economic dynamism, agglomeration of blue activities, social empowerment of resource-dependent local communities and pollution-free built-in environment.
Marine information and communication technology (ICT) is important emerging services sector of blue economy from the perspective of its applicability to all other sectors and sub-sectors of blue economy. Faster computing and digital revolution has made ICT applications a necessity in all productive activities including natural resources. Marine resources pose tremendous challenges as their stock and use occurs along with a simultaneous process of production, consumption and regeneration. These issues could probably resolved better through use of ICT. The scope for applications of ICT in marine sector is widening day-by-day. In the blue economy framework, it may expand further depending upon the emphasis given to ocean data recording, analysis and simulations. Moreover, Goal 14 of the Sustainable Development Goals highlights the role of ICT in ocean conservation and sustainability. The range of applications of web-GIS technologies for real time ocean data indicate the potential of marine ICT as an emerging sector of blue economy. Typically, ICT is used for satellite monitoring, analysis of big data for biodiversity, pollution, weather pattern, ecosystem evolution, fishing zone advisory services, ocean state forecast, storm surges, cyclones, monsoon variability, tsunami, R&D services including validation of satellite sensors, parameterization of key processes for models and verification of model simulations.
Marine Finance, Insurance and Commerce
Marine commerce is a pivotal segment of blue economy comprising of business services, marine retail services, marine financial services, maritime insurance, ship leasing, support activities, wholesale trade, maritime legal service and other marine services. Maritime insurance businesses have registered growth over time. Unlike general insurance, maritime insurance involves certain unique challenges in terms of risk perceptions. The sector globally faces challenges due to fraudulent marine shippers and quality of merchandise. Ship finance is another potential sector for expansion in the Indian Ocean region. Marine conservation finance is emerging as a separate category of marine financial services. Conservation of marine resources may not be preferred by the bankers and financial markets as those do not match the revenue streams and assured profits of the typical financing instruments. This segment faces serious funding gap which needs to be met by special financing mechanisms. Expansion of scope of marine conservation and collaboration between specialist financiers should be encouraged to tap this emerging field of financing of blue economy.