The Blue Economy: Charting the region’s economic future

Filed Under: April 2017 Issue

By Bill O’Neill
As Chief Executive Officer of the Cape Cod Chamber of Commerce, Wendy Northcross keeps a lot of facts and figures handy, but this is one of her favorites: Cape Cod has 559 miles of coastline.
“You’re never more than seven minutes away from coastal water,” she says.
And while the Cape’s financial life has always been tied to the water, recent years have seen a new effort to advance the maritime economy.
The so-called Blue Economy ranges from old-fashioned oyster farming to high-tech marine robotics, from stand-up paddle boarding to commercial fishing, from whale-watching to wastewater treatment.
“We’re looking at Cape Cod in a new way and trying to reframe what we have and trying to put emphasis on some of these activities and label it Blue,” says Northcross. “When you start peeling back the layers of the onion, there’s a lot of opportunity here. But it needs buy-in from the community and it needs support from organizations like mine and the Cape Cod Commission and town planners.”
Northcross jokes that when some people hear about the Blue Economy, “they think blue hair and retirement and all that.”
She says the Blue Economy is a way of looking at the economic landscape on the Cape and finding ways to diversify opportunities in employment and the business ownership.
“We’re developing a plan that will help us sustain and expand activity that can only take place at the coastline,” she says. “What can we do to establish a strong ‘blue economy’ in the Cape Cod region?”
In the nearly 400 years since the Pilgrims landed, the Cape’s economy has gone through eras where shipbuilding, fishing, whaling and tourism were the main economic drivers.
Northcross sees the Blue Economy as the next era. “Hopefully this will sustain Cape Codders for the next 100 years,” she says. “When we’re having the 500th anniversary of the Pilgrims landing, it will be very Blue around here.”
Northcross says the idea of focusing on a Blue Economy “kind of bubbled up, no pun intended, at a Cape Cod Chamber board retreat two years ago. Since then, we have been trying to further put meat on the bones of a what a Blue Economy would look like.”
In February 2016, the Seaport Economic Council awarded a $180,000 grant to the Cape Cod Chamber of Commerce and the Cape Cod Commission as seed money for a Blue Economy initiative.
“Water formed the Cape and shaped its economy over the past four centuries,” said Paul Niedzwiecki, Executive Director of the Cape Cod Commission, when the award was announced. “It’s appropriate that we look to leverage and broaden that history to define the region’s future.”
In April 2017, the Blue Economy Project, which is supported by the state grant, will formally present comprehensive, high priority action items for the Implementation Plan and to seek concurrent overarching themes and directions that are based on extensive public outreach to Carolyn Kirk, Deputy Secretary of Housing and Economic Development and vice chair of the Seaport Economic Council.
“We’re putting together the elements of what do we have, what do we want, what’s missing,” says Northcross. “How do we get what’s missing is a big piece of it.”
New collaborations are likely to be among the products of a Blue Economy push.
For example, Larry Madin, Deputy Director and Vice President for Research at the Woods Hole Oceanographic Institute, foresees growth potential in new uses of marine robotics.
WHOI scientists and technicians developed a system called the HabCam, which can be towed along the bottom of the ocean to automatically count scallops. Work is underway to put that instrumentation on to a robotic vehicle.
“More and more applications are going to come along, as the capability of these underwater vehicles improves,” he says. “We can find out what’s going on in the marine environment and use that information to improve some of the resource-based industries that need to know what’s happening.
“The scallop fishery is the biggest dollar fishery in the Northeast. We need better information about how many there are and where they are, so that the fishery can be carefully controlled.”
Madin says WHOI’s goal over the last decade has been diversification of the types of research done there and its applications.
WHOI’s newly established Center for Marine Robotics has begun to partner with other companies, including Raytheon and Lockheed Martin, to develop new robotic technologies and applications, not just for research but for things like monitoring offshore oil platforms, wind installations or aquaculture installations.
Toby Stapleton, director of UMass Dartmouth’s Center for Innovation and Entrepreneurship (CIE), sees great potential for marine-tech start-ups. CIE has spun out six marine-tech companies and is incubating another six.
“We are at the epicenter of the marine technology world, everything from sensors to vehicles,” Stapleton says of the region from the Naval Undersea Warfare Center (NUWC) in Newport, RI, to WHOI.
“One of the opportunities is leveraging that network. If you look at the Silicon Valley ecosystem, you’ve got large corporate players, like Hewlett-Packard and others, and you’ve got the startup community, which is enabled by the big players in the market. There’s a culture out there that lends itself well to entrepreneurship.
“Here, the real opportunity is leveraging that network of anchor institutions – NUWC and WHOI and MIT up in Boston, as well as others, and certainly CIE is part of that mix – to develop the technology that will then lead to spin-out activity, start-up activity and entrepreneurship,” says Stapleton. “The Cape is well poised to take advantage of that.”
Stapleton worked with the Cape Cod Technology Council when there was a vision of a Silicon Sandbar, but he says software wasn’t a sustainable industry for the Cape.
What is sustainable, he says, is leveraging the natural resources and access to water, with the high-tech resources of WHOI and local marine technology companies like Teledyne and Hydroid, along with marine biology and biomedicine.
Tourism, in the form of ecotourism, will be another key part of the Blue Economy, says Northcross. Elements of it are well underway in the form of charter fishing, charter sailing, seal watching and kayaking, among other activities.
Whale-watching cruises have an added impact in that they employ naturalists who are conducting research.
“We’re never going to stray too far from our fate as a beautiful place to rest and recharge, but maybe we flavor that with more proactive things,” she says. “We have to be intentional about it, and that’s the work we’re trying to get done.”
Part of the future, she says, is making sure that land-use decisions align with the Blue Economy.
Some questions she says will arise: Are we making sure that our working harbors can remain working harbors? Are we guaranteeing access to coastlines? How does aquaculture coexist with multi-million dollar homes?
Northcross says travel and tourism worked “brilliantly” to reinvigorate the Cape economy in the century after whaling, but now people want different economic opportunities.
“What can we do to create opportunity that keeps our younger generations here?” she asks. “We think the whole issue of things that are dependent on water is going to provide employment at a living wage. Most people, when they hear the idea, they’re very intrigued and they’re very supportive.”
“I’m glad the term Blue Economy is out there,” says John Pappalardo, CEO of the Cape Cod Commercial Fishermen’s Alliance. “It gives any business on the Cape and Islands a chance to recast why they’re here, why they’re in business, what they’re about.
“The quality of life we enjoy down here on the Cape and Islands is all linked to water, either fresh or salt. Some of us go to work every day on the water and others come down here because we like to look at the water or be near the water. The quality of our environment supports the quality of our lives and the values of our businesses and our properties.
“I’m happy that the Blue Economy initiative is out there because it’s going to cause people to start thinking about how special this place is,” says Pappalardo. “It brings it out of the shadows something that everyone knew, but now it’s something that we’re talking about and it’s starting to mean something.”
The view from the state
Carolyn Kirk, Deputy Secretary of the Executive Office of Housing and Economic Development, shared Beacon Hill’s view on the Blue Economy.
“The Blue Economy is defined as basically the portion of the economy that’s derived from our coastal assets. It’s ocean-related. It would be tourism-related in some cases. It would be marine science and technology, if you think about underwater robots.
“When the Cape Cod Commission came forward in partnership with the Chamber to undertake their own definition of what the Blue Economy is and could be for the Cape, they made a really compelling case about being aspirational for higher-wage jobs and year-round jobs, rather than seasonal lower-wage jobs.
“They’re taking an unbelievably comprehensive view of everything from commercial fishing to harvesting of oysters and any kind of science-related initiative that they can differentiate themselves by leveraging existing assets.
“It’s a comprehensive segment of the economy that we’re very interested in.
“The support is through the Seaport Economic Council, which is kind of version 2.0 of the Seaport Advisory Council, which was started under Gov. Weld, so it has been around for over 20 years. It had a track record of making solid investments to support coastal communities, mostly though for the big ports of Salem, Gloucester, Fall River, New Bedford and Boston.
“When the Baker-Polito administration came in, they wanted to keep all that was good and proven about the Seaport Advisory Council, but narrow the focus to investments that can really drive the economy, in this case, the Blue Economy.
“There are 78 coastal communities and we’re seeing more and more applications with that economic perspective, that maybe we wouldn’t have seen previously.
“I was on the Seaport Advisory Council for seven years as mayor of Gloucester, so I was very familiar with the applications that had been coming through. I don’t think we would have seen a Blue Economy initiative, such as the Cape has undertaken, through the old Seaport Advisory Council.
“It’s basically to the governor’s point about doing more of what works and less of what doesn’t.
“When we think about the Blue Economy, it’s like any other sector of the economy that we would have a laser-beam focus on.
“What we’ll be looking for when we see the results of their work is to know the extent to which they’re leveraging their existing assets. Just from an economic development standpoint, that’s a deeply held belief that we have that each region, whether you’re western Mass. or a coastal community, has certain assets and that we build from our strengths. We’ll be looking to see that they have that covered.”
The Cape Cod Commercial Fishermen’s Alliance
For the Cape Cod Commercial Fishermen’s Alliance, focusing on a water-based economy is nothing new. Founded in 1991, the Alliance seeks to conserve marine resources through sustainable fishing.
“Most of the programmatic work and regulatory work that we do is designed to make sure that we have a healthy and balanced marine ecosystem,” says John Pappalardo, the CEO of the Alliance.
That’s worth fighting for, he says, “because there’s men and women still willing to go to work at sea and it’s part of the tradition and culture of New England.”
One of the Alliance’s most important achievements, he says, was its foresight in buying permits and quota from retiring fishermen and holding them in trust for the next generation of fishermen, assuring them of affordable access to the resources off our coast.
Pappalardo was appointed in 2002 to the New England Fishery Management Council to represent Cape Cod hook-and-line fishermen. He’s served on the Council ever since, giving Cape Cod fishermen a voice in federal policymaking.
“We still have an active commercial fishing fleet in Chatham,” he says.
“We’re one of the last remaining small boat ports in New England, and that’s due in part to the Alliance and the fishermen working together to be proactive in the regulatory arena.”
As important as the Alliance’s efforts on fisheries policies may be, that’s only a piece of the organization’s work.
For example, in 2015, the Alliance became the lead investor in rebuilding the Aquacultural Research Corporation, Cape Cod’s only shellfish hatchery.
“That was in danger of going away,” says Pappalardo. The Alliance brought together a pool of investors to rehab the hatchery and ensure that quahog and oyster seed remains available for the 1,400 commercial aquaculturists and fishermen in the area.
“We see that as a good triple bottom line approach, where you clean the environment, you create food and you create jobs,” he says.
On the Alliance’s wish list is to see the state help Barnstable County acquire a second dredge.
“The shifting sands are a problem,” he says. “They’re clogging up waterways and harbors and channels. Keeping our active waterways open is always a problem. The Cape and Islands create a lot of economic returns for the state. One of the reasons they do is people come down here for recreation, people live here for quality of life, and keeping waterways open is an important part of that.”
The Alliance also sees research in climate change as a regional and national priority.
“All the guys and girls that I work with are concerned about a rapidly changing marine environment,” says Pappalardo. “Call it climate change or global warming or whatever you want. It’s happening, it has been happening and they’re living with it every day. One of their concerns is that the science and the management that controls their lives isn’t recognizing it as quickly.”
Any recommendation for the general public?
“Eat local fish, that’s what I say.”
A few highlights from the Alliance’s history
The Cape Cod Commercial Fishermen’s Alliance describes itself as “the leading voice for commercial fishermen on Cape Cod.” Here are some of its accomplishments.
1991: First gathering of fishermen to form the Cape Cod Commercial Hook Fishermen’s Association to participate in the making of New England fishery regulations.
1996: The Association sued the federal government because fishing regulations were not doing enough to protect sensitive seafloor habitat.
2003: Launched cooperative research program to tag cod and haddock, which brought $1.5M to local fishermen.
2004: Launched the hook “sector,” the first harvesting coop approved in New England, allowing the Cape hook fleet to locally manage its own annual allocation of codfish.
2007: Purchased the first of what became a $4M investment in scallop, cod and flounder fishing quota and began leasing the quota at affordable rates to 120 fishing families on Cape Cod, allowing them to catch an additional $3M in seafood annually.
2013: Expanded its mission to include all Cape fishermen and all fisheries; changed name to Cape Cod Commercial Fishermen’s Alliance.
2013: Launched the Fish for Families program with The Family Pantry of Cape Cod, which has made more than 88,000 locally-caught seafood meals available to more than 20,000 Cape Cod families in need.
2014: The Fishermen’s Alliance joined community-based fishing groups from across the country to form the Fishing Communities Coalition, which amplifies the voices of small-boat fishermen who are committed to finding conservation-minded solutions to today’s fisheries management issues.
2016: A group of fishermen worked with the organization to change a rule that wasted government dollars. This change will save the local monkfish, skate and dogfish fleet $400,000 a year and protect jobs for more than 60 fishing families.
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The WHOI universe
Founded in 1930, Woods Hole Oceanographic Institution (WHOI) has more than 1,000 employees, making it one of Cape Cod’s largest employers. But the impact of WHOI goes beyond being the largest nonprofit oceanographic research institution in the world. Companies have spun out of WHOI to become established employers on or near Cape Cod.
None of them produces anything as well-known as Tang, the breakfast drink that was popularized by NASA (although it was not, as popular legend has it, invented by the space agency).
“We probably can’t lay claim to anything with quite that much of a household name, but there have been 16 companies that have grown out of WHOI that are in the immediate area,” says Larry Madin, Deputy Director and Vice President for Research at WHOI.
“A lot of them are still in the oceanography business in the form of manufacturing equipment and instruments and services that are related to the research that we do, but some of them have broken out a little more broadly.”
Associates of Cape Cod, sometimes called the crab lab, was founded in his garage by WHOI scientist Stanly Watson in 1974.
The company, which produces a medical product from the blood of horseshoe crabs, opened an 80,000-square-foot state-of-the-art manufacturing facility in 2004.
“That was a discovery that was developed by WHOI scientists and some others scientists but it became a business that produces a product that is widely used in hospitals and in testing medical equipment and supplies for bacterial contamination,” says Madin.
Based in East Falmouth, Associates of Cape Cod was purchased by the Seikagaku Corporation of Japan in 1997.
Another WHOI spin-off that’s become a part of the global economy is Hydroid, which is now owned by Norway-based Konigsberg Maritime. At its Pocasset facility, Hydroid builds underwater robotic vehicles (also known as autonomous underwater vehicles or AUVs).
“They’re probably the largest maker of these types of AUVs in the world,” says Madin. “They grew out of a WHOI engineering group that invented and first built these vehicles. We still work closely with Hydroid to develop the next-generation technology and make various improvements, as well as operating the AUVs for our own research purposes.
“Those are just two examples of what was originally scientific research or engineering that was designed to support scientific research that led to the development of companies that are important parts of the local economy.”
Other WHOI spin-offs include Falmouth Scientific, which produces sensors and AUVS; Teledyne Benthos, which sells acoustic modems, hydrophones and other niche-market marine instruments; and the Woods Hole Group, an oceanographic consulting company focused on coastal environments, climate change and environmental impact.
The WHOI Office for Technology Transfer assists inventors in patent filing, licensing and startup companies processes, so the next WHOI spin-off could be coming soon.
This article was published in the April 2017 issue of Cape & Plymouth Business.