Enabling Technology In Blue Economy Value Chains - SEA Green BLOG

Enabling Technology In Blue Economy Value Chains

Sea Green BLOG | February 2022. | by FRED PUCKLE HOBBS, COO at Sea Green

Why do you use technology? Is it for convenience? Ease? Accessibility? In daily life, it’s usually all three. Whether it’s for connecting with loved ones, to shop online or to have easy access to your finances. In 2020, 80% of bank clients managed their bank accounts online or from their mobile phones, according to a UK survey by Finder. 

But what if the bank never accepted your custom in the first place? If you didn’t have a livelihood which was “reliable” enough to open an account or to receive basic insurance? For farmers in coastal communities, whose work is often informally paid, dependent on weather patterns and outdated tools, independent financial management is still a pipedream.  

The Indonesian seaweed industry is a highly relevant case study in this respect; despite steady market growth, financial actors still perceive risk as outweighing returns. Multiple layers of aggregation form a deeply fractured supply chain, built on informal stakeholder relations and thus preventing market and price stability. The root of all these problems can be traced to a single component: data. Too little of it, or no assurance in its authenticity, and trust evaporates from end to end and beyond the value chain. 

Low confidence between stakeholders makes trade speculative, sporadic, and irregular, forcing downstream defensive measures like quotas and subsidies, sometimes at a national level. The not wholly satisfactory nature of these practices, coupled with often complex social nuances, has led to a demand side technology push in traceability and sustainability certification systems to solve data paucity “top-down” in partnership with individual farming communities.  

Such a lens doesn’t solve the challenges facing coastal communities engaged in primary production. Existing farmer-buyer relationships often serve to perpetuate these problems, with capacity building for farmers to grow their businesses overlooked and underserved. Development of holistic and equitable solutions requires effective engagement with coastal communities; listening and learning from existing producers is critical in solving the last mile challenges and redistributing growth.   

Broadly, the data issue is not caused by an absence of service, but a lack of mechanism to reliably connect stakeholders in a way that works for all. Fortunately, the most relevant components of solutions to do this aren’t non-existent, they are just yet to be deployed in the right combination. Whilst it is well documented that the populations of Indonesia and the Philippines between them are among the most unbanked in Asia, mobile networking and usage has flipped these statistics, with penetration of connectivity above 70% in Indonesia. 

Creating product traceability data is often as simple as giving farmers a mobile app to record it. Building an app is easy; making it accessible requires broad-based communication to acknowledge the educational, cultural and social situation of its users. But how is the use of a tool like this encouraged? By making it actually useful 

If a farmer’s biggest concern is being paid for their produce, integrate digital payments, a mobile wallet and a messaging tool that allows their buyers to deal with them directly. Such communication creates common interest, enhancing understanding at both ends of the value chain. If ability to monitor crops or livestock is a priority, then make plug-and-play sensors – even IoT – more accessible and ensure the data they produce can easily be read. If complexity of this kind of equipment exceeds education levels, add an online educational component to the offering. All of these solution components exist, and many are available “off the shelf”, specifically designed for integration.  

This is where Application Programming Interface (APIs) enter the frame. Not a new term, once used to refer to the interface of components within computing devices, these connections now most often relate to the connections that allow different systems to speak to each other, particularly over the web. An unprecedented source of value chain primary data will rely extensively on APIs for both creation and accessibility for stakeholders. A digital platform ecosystem for this environment is long overdue.   

Of course, new technologies are constantly emerging and, whilst their incorporation can sometimes be very attractive to investors, their alignment with need in the development space can often be limited. Blockchain is perceived as such, but its unique 

SEA Green mobile app

Sea Green app homepage screenshot

combination of transparency, immutability and interoperability of record is arguably the perfect fit for complex value chains, particularly in the agricultural sector. Adding tokenisation to this mix will require considerable care, but the ability to assign multiple values to a single asset could represent a game changer for livelihood diversification, especially when it comes to incentivising ecosystem services. 

Whilst commodity buyers will welcome the basis of a transparent and sustainable primary level exchange, its advent is also an avenue through which financiers and insurers can finally access these communities. By making operational, financial, and environmental data fully reliable and available, insurance agents will finally have a solid base to provide tailored microinsurance specific to risk reduction. This kind of combined humanist-technology approach applies systems-thinking to the needs of communities, helping them secure real commercial independence that lasts.