Britain’s marine industries
Tom Chant, CEO of the Society of Maritime Industries, describes the Society’s pivotal role
I feel very lucky to be leading SMI. I am frequently asked, ‘How’s SMI doing?’ and the answer is, ‘Exceptionally well, thank you.’
Who would not want to be running an organisation supporting the national maritime endeavour when you have a National Shipbuilding Strategy, a major report (Maritime 2050) stacked full of recommendations, and a burning socio-economic puzzle of decarbonisation to solve? The convergence of these major themes is driving up SMI’s activities and profile, and is thrusting maritime onto the government agenda.
I took over as SMI’s chief executive in August 2020 just as we were about to head into another lockdown. The future of the National Shipbuilding Strategy was very uncertain, maritime innovation funding was rare as hens’ teeth – and still is – and, of course, no one knew what was happening the next day, let alone in six months’ or a year’s time.
Our small and powerful team
What helped SMI navigate the storm was our exceptional, although small, team supported by our strong board of directors. At the heart of our engagement at the time was the rich picture consultation led by the Ministry of Defence and SMI, which over a five-month period engaged different sectors of the industry via multiple online workshops.
That work was pivotal in setting out how there is one shipbuilding enterprise in the UK which collectively has a turnover of £116 bn, supports the employment of 1 million people and underpins our sovereign capability. The mission statement shared by government and industry is to have ‘a globally successful and sustainable shipbuilding enterprise’ – quite a leap forward from sending all orders overseas to the lowest bidders.
We are now watching closely to see how the engagement with the MoD plays out, but the key is we are all engaged, round the table and talking in person. Much has been said about Boris Johnson, but what we in maritime do know is that he was a champion of our sector, pulling levers behind the scenes. We sincerely hope this momentum is continued under the new government, recognising Britain’s status as a maritime nation, something we felt Boris understood very well.
SMI’s diversity underpins our influence
SMI’s role is to represent the maritime engineering sector in the UK and as maritime is a broad church, that is a real challenge. The National Shipbuilding Strategy lists 1,685 companies in the sector, and we are investigating some artificial intelligence solutions to examine this for ourselves. There is plenty of room for growth in membership in SMI’s core competency areas of vessel refit and build, supply chain, ports, autonomy and marine science. We are a diverse industry, so analysing it is not as simple as looking at SIC codes – a rather arcane and clunky system used by government to define business sectors.
Understanding that your organisation is a maritime company is not always obvious, as many industrial solutions cover many different industry sectors. One of our members, Rotherham-based manufacturer ACM, makes composite bearings that it markets to the hydropower, industrial, renewables and maritime sectors. That is not unusual, and requires raised levels of advertising, social media and presence at UK events to raise SMI’s profile and generate connections.
None of that profile-raising activity is worth it, though, without building the substance underlying it. As our membership grows, so does the number of services we can provide. That is an exciting prospect, and one that keeps my creative juices flowing. We are in the people game as a trade body supporting organisations selling complex engineering solutions.
In order for us to do that, the SMI team has to be able to offer insight and connections to our members. The team enjoy doing this, as we have an altruistic streak. Current plans include recruiting new roles within SMI to help drive awareness of innovation and renewable energy. SMI has always had a focus on business opportunities for members, and we still have that ambition to match member ambitions to growth.
The combined voice that Maritime UK brings has been central to the sector, raising its profile in government. Other industry sectors have been better at doing this and have created billions of pounds of funding for their industries, but maritime now has a collective spending review bid and strong ties in the Department for Transport, Department for International Trade, Ministry of Defence and of course the new National Shipbuilding Office.
The race to net zero
These days no maritime article is complete without mentioning decarbonisation. According to Clarksons Research, the international shipping fleet produces 800 million tonnes of carbon – around 2.4% of global emissions – while the cost of decarbonising the whole maritime sector is being pitched at between $1.4 trillion and $1.9 trillion. This is providing an unprecedented opportunity for the industry to innovate and create products and services.
Our role in this is to drive up awareness of this spectacular opportunity and formidable challenge, helping to lobby government for R&D funding and also to feed in private investment to UK companies. Although small and micro companies may have brilliant engineering ideas, they then need help to connect and collaborate, and to learn about grants and how to go about raising finance. We can actively drive awareness and provide connections and options for our member companies.
The other interesting angle on this innovation is the way our broad membership comes into play in such a valuable way. The solutions being sought for decarbonisation require onboard and portside engineering, with civil and defence solutions in the mix as well. That provides SMI with a key role to act as a forum which can provide a broad cross-section of expertise and opinion as the sector looks to create a system of systems: vessels, crews, engineers and portside teams need to plan their solutions together.
At the time of writing, global trade is having a hiccup, but it is underpinned by the maritime industry, an industry which respects British maritime heritage and business standards. Growth in maritime is set to continue, driven by massive changes in technology combined with the predicted growth of the global population.
An increase in population means a greater need for energy with, according to the Global Marine Trends report, an estimated 40 per cent increase in energy demand by 2030 compared to 2010. This means more drill ships for ever deeper oil and gas fields. Meanwhile, according to a report from the Global Wind Energy Council (GWEC) offshore wind capacity is set to skyrocket to more than 234 GW by 2030 from 29.1 GW at the end of 2019, led by growth in the Asia-Pacific region and continued growth in Europe.
It is because of this growth that the Organisation for Economic Co-operation and Development (OECD) has predicted that between 2010 and 2030 the maritime sector could double in size, to $3,000 billion. The UK, as an island nation, is well placed to harvest part of this growth. As the forces of globalisation continue to reverberate and as the world’s economic centre moves eastwards, it will be important for SMI to help the UK maritime sector engage with Asia, whose middle classes are forecast to add 2 billion more consumers by 2030. We see, in addition, many exciting opportunities in the Chinese, South Korean and Japanese shipbuilding sectors, which even at the time of writing account for 90 per cent of global shipbuilding.
One of the prime building blocks at SMI in understanding and targeting these opportunities is our sector working groups, including commercial and defence maritime, digital, ports infrastructure, marine science and autonomy. These groups, at the heart of our operations, are each supported by up to 22 members who meet four to five times per annum and steer our work. They feed back the latest trends, sharing their experiences, expertise and learning about markets and projects. This is where the combined power and influence of our membership can make a positive difference. The insight of committees informs our policy formation and lobbying, and also helps with practical measures such as participation in trade fairs and overseas visits to shipyards.
While the future is bright for maritime, we cannot afford to rest on our laurels. At SMI we will continue to fight hard for our sector in the corridors of power. To achieve maximum impact we will need the continued support of our members, and we need, too, ever more maritime engineering businesses to come forward, so the voice of maritime is heard and acted upon where it matters. Join us!