Blue Economy Convergence Conversation: Milicent Pitts, CEO of the Ocean Exchange
Millicent Pitts is a fascinating woman who describes her professional journey as “very unexpected.” After spending 30 years in the chemical and materials industry, she did “a 180” in 2013 to become the CEO of the Ocean Exchange, a 501c3 with the sole mission to help advance the adoption of solutions in the field of sustainability.
Having previously worked in investor relations for a public chemical company, she saw a lot of change in the focus of sustainability. The definition has expanded significantly, but even decades ago, companies used energy savings and yield in their decision-making. The belief that things that are good for the environment can also be good for business is not new. While there are new ideas today for sustainable businesses, people have tried to do what is right for the broader set of stakeholders throughout history. What is notably important now is that we must get out of the vicious cycle of finger-pointing and assigning blame, and instead become more forward-looking if we’re going to solve the hard problems. This priority is the focus of Ocean Exchange — to leverage the research and early development that has already been done to unstick the solutions for the future.
In this Blue Economy Convergence Conversation, Millicent and I discuss the importance of cross-disciplinary outreach, communication, and learning for creating a vibrant Blue Economy.
Deb: Tell us about Ocean Exchange.
MIllicent: Our mission is to help advance the adoption of innovative solutions from startups and universities. We aren’t looking at innovations in big companies and helping get them to market. That doesn’t mean they don’t have solutions — they may put money into innovation but they’re not necessarily the source of innovation. At Ocean Exchange, we specialize in startup solutions at Technology Readiness Level (TRL) six through eight. That’s our sweet spot.
The entities we give grants to must have a working prototype. We help put some common sense into what that means. For example, a working prototype of an autonomous ocean vehicle is very different from a working prototype of a whole new chemical process. We will support some TRL nine as well, which means they’re ready to go to market. We help them make it through the “Valley of Death.” We have fabulous national labs in the US, where we spot innovation and try to help get it unstuck and give them some money to bridge the gap. They’ve been living off regional, state, and federal grants to get to where they have gotten. We help bring new sources of capital.
Deb: What is your definition of the Blue Economy?
Millicent: I happen to have been invited to be on the NOAA subcommittee for the Blue Economy in 2020. So, while there are other great definitions of the Blue Economy, I’m a big fan of NOAA’s. It has ten verticals and it’s quite robust. I also like that the NOAA definition takes into account research. It gets into areas that some people may consider as part of Blue Economy innovation, such as tourism, which is one of the biggest segments but which needs, wants, and can accept a lot of innovation. Tourism is a big part of the North Carolina region and its Blue Economy.
The NOAA definition gets beyond the old way of thinking about the extractive industries, such as oil and gas or fisheries. Ocean Exchange has been conducting a webcast series in conjunction with the Marine Technology Society. We did an overview of the Blue Economy in which we had the chief economist of NOAA and other smart people discussing the concept. Many people believe the elements of the Blue Economy can grow faster than traditional parts of the economy.
We need to have discussions about Blue Economy workforce development. There’s going to be a dislocation of people who are in older sections of the total economy who are geographically in other places. We need to consider other skills necessary for the future. Ultimately, what I think everyone should do is broaden their thinking about the Blue Economy and not get hung up on one definition.
Deb: How could Wilmington use a Blue Economy concept to plan for its future?
Millicent: I’m probably an outlier in what I’m going to say. Traditional economic development counts jobs created as very important in measuring economic growth. Jobs are created, people buy a house or car. They buy gas and groceries, and all this contributes to the economy. I would also argue what we should think more broadly about how innovation is developed in places. I don’t even care if it’s developed in the US. It’s about getting innovation to companies and entities in areas such as Wilmington to adopt and use to become more competitive. So I see it as being about job creation and also about protecting the big businesses that are in a place like Wilmington’s Port. Sometimes, local or regional initiatives overlook the power of Big Industry and its ability for adopting technologies from outside of their area to make them more competitive. That’s going to protect and grow jobs in the long run.
Deb: Does Wilmington need a strategic plan for the Blue Economy or an office that helps with execution?
Millicent: The first thing is to identify what assets in the area they can map to the Blue Economy; however, they want to define it. Take the port as an example, it’s a huge asset to advance Wilmington in competition with Savannah or Brunswick, Georgia, or the Virginia Ports. What is needed for the port to grow and what are the things that facilitate its growth? We too often focus on gaps rather than on the things that can facilitate connections for growth. The university might be something that facilitates the port’s growth.
Deb: With the growing momentum on impact investing, has it made your search for funders and investors easier?
Millicent: Not yet. I think people are serious about it. Banks and the capital markets are going to force it. But I don’t think I quite know what that means yet. It’s an important trend but it didn’t suddenly open a gazillion doors. Doors are cracking open. People haven’t figured out how to fully execute it yet. If you look at corporations, for example, it doesn’t seem like they all know what that means for them yet. And if you look at some of the funders, there are some that will do a concessionary investment, which is a form of impact. They’re willing to take the risk that someone else won’t take or accept a lower return in the long term because there’s some mission orientation. This is a growing trend. I’ve been to Family Office meetings where the next generation is sitting at the table and demanding to do good and to make a return. They often have a huge fiduciary responsibility. They can’t ignore that, but they often say they can carve out something to invest in for sustainability. I think it’s serious. It’s evolving. But it hasn’t changed my life overnight.
Deb: What is that future state for Ocean Exchange?
Millicent: Ten years ago when we were founded, people talked about the ocean and nature, but it was about conservation. There were discussions about saving the whales or coral restoration. I don’t want to diminish those discussions or causes. They’re very important. But now people are thinking about the economic engine of it all. We talk about the Blue Economy. It is accelerating and so important.
If we only look at the oceans and what is going on in marine science departments across universities, we don’t see the big innovations. The big stuff is coming out of the engineering departments — all of them — civil, mechanical, bioengineering, chemical engineering, and computer science. The big “aha” that many of us on the NOAA Blue Economy subcommittee had was that it’s about data. Data is going to power an awful lot of stuff. The real dilemma is if you go into most engineering departments and mention the word ocean, they will tell you it has nothing to do with them. This is the big gap in where Ocean Exchange is going.
When I look out ten years, I see that the organization will continue to be the evangelist for solutions that are being developed in public entities with private money supporting. I’ll tell you a story to elaborate. We had winners of our $100,000 awards for two years in a row from an incubator at the Argonne National Lab. Both were for innovative energy storage devices. We will never be able to use all the renewables that we want unless we solve the energy storage problem. At this time, no one knows how to solve the problem. The sun doesn’t always shine. The wind doesn’t always blow. Even wave action, although pretty consistent, needs energy storage to deal with any kind of intermittency of the energy output.
I’ve met some of the smartest people who have solutions that address energy storage. But when I talk to them about maritime utilization, It’s like a curtain comes down in their head. They’ve never considered maritime usage as their focus. I’ve asked them if their solutions have ever been considered on an import or big ship crossing the ocean and they reply that they’ve “never considered it.” They’re thinking about grid use for either a traditional grid utility company, or off-grid uses, but they never thought about the maritime needs of energy storage. The decarbonization of ocean shipping is one of our biggest and most audacious problems that nobody knows how to solve.
You might read a cool article about electric ferries in Norway. These are very different from crossing the ocean carrying goods. If there’s anything we’ve learned in the last year it’s about our supply chain and how fragile it is. We are so dependent on stuff and the process and motion of getting it to places. All of this movement of goods is burning nasty fossil fuels, yet nobody knows how to solve this problem. Looking forward, we need to integrate the needs of maritime more broadly into the thinking and efforts of all these smart people.
Public and private universities get federal and state monies. We all pay for this. But it’s not helping the ocean yet because they don’t know about the needs of the maritime. Maritime industries have failed to give adequate market signals about their needs. The utility companies have been giving very strong market signals about their needs for decades. Transportation has given strong signals about what it needs to happen to disconnect from fossil fuels. The maritime industry has only started signally very recently. They’re doing a much better job, but it’s a very recent initiative for most of the industry players.
Deb: If there were two or three things that Wilmington should do right now, what would they be and how should they sequence them?
Millicent: Getting a full-time person to lead the Blue Economy initiative is number one. The next thing is to prioritize the industries that already exist in Wilmington. Strategy is also about selecting what you’re not going to do. The effort needs some focus on the top three-to-five areas to figure out what’s going to drive those forward. Map the needs with off-ramps that show today’s gaps, and have activities to solve the needs. Measure progress. Facilitate cross-industry and cross-discipline communication. One industries’ problem is another industries’ current capability. Force people in a room to tell their stories about the problems they solved and how they solved it. At Ocean Exchange, we get to talk to people across a whole lot of disciplines. We find that we share a lot of commonalities we hadn’t thought about. Many of us are sort of drawn into working in our own vertical and lose opportunities to see what others are doing.
Deb: What is your greatest hope for the future?
Millicent: I hope that there is more of what Wilmington’s doing. I hope that everyone who works in these regional, state, and local clusters don’t view the guy next door as a competitor, but rather as an opportunity. As the pie gets bigger, it will be better for everyone. I’m absolutely convinced it will be better for investors, startups, strategic parties, and universities. I see too much competition. My hope for the future is there are people who can expand their view beyond their own interests. It’s a hard thing to do. Traditional economic development thinking forces people to think narrowly, not broadly. The ones that are going to successfully get out of the mode of doing what’s always been done to do something different to grow for all of us.
Millicent reminds us that the forces of technology, humanity and the purpose of business are being rebalanced. Despite its power to connect us and give voice to people around the world, the forces of technology, people, and business purpose are imbalanced and diverging. It is happening all around us so we have to make a choice. Either we recognize what is happening and work together to rebalance these forces, or we ignore them — with peril. Most of today’s businesses were built to prioritize shareholder returns. That thinking is creating an imbalance with the communities in which they operate. As the primary reason for business is changing, it’s creating a gap in what we believe is the purpose of business.
People are demanding businesses take a more active role in solving problems such as diversity and inclusion, inequality, and climate change. Influential financial institutions and advocacy groups are putting pressure on companies to take active steps to address these issues. With this new reality as the backdrop for business, the shareholder model is no longer useful. It can’t set up an organization for success in the future. To grow and scale a business, we must refocus our perspective on being human-centric. As leaders, we must think through our role in addressing broader worldly issues and the challenges we face as societies and humanity. We must create a new model for delivering on profit and being responsible for the future.
Deborah Westphal is a leader in future-focused strategy. In her book Convergence, she leverages more than 30 years of experience helping the world’s most innovative business and government leaders to challenge biases, ignite ideas, and build connections. She delivers this rich insight with an empathetic and thought-provoking writing style to chart a path for readers. Throughout the book, personal stories and historical examples highlight convergences that span the globe, impacting everything from global supply chains to climate change, and reshaping the future of business, technology, and humanity everywhere.
Get your copy of Convergence here.