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Interview Transcript

Mitch Ratcliffe  0:10

Hello. Good morning, good afternoon, or good evening, wherever you are in this beautiful planet of ours. Welcome to Sustainability In Your Ear. This is the podcast conversation about accelerating the transition to a sustainable, carbon-neutral society, and I’m your host, Mitch Ratcliffe. Thanks for joining the conversation today.

The topic is accelerating innovation. When we talk about the climate fight, we usually picture it on land: forests and wildfires, EVs and the power grid, solar panels on roofs everywhere. But the largest climate system on the planet is the one we understand the least, and it covers more than 70% of the Earth. The ocean absorbs our heat, feeds billions of people, moves nearly everything we buy, and it’s been treated for most of human history as something to extract from rather than invest in. And that’s the starting point to change, and Canada is one of the places where you can watch that happen in real time.

My guest today is at the center of this epochal shift. Kendra MacDonald is the CEO of Canada’s Ocean Supercluster, a national, industry-led effort to grow what’s come to be called the blue economy. We’ve talked about it on the show several times. Think of it as a table where startups, century-old fishing and shipping companies, Indigenous partners, researchers, and global corporations all sit down together and co-invest in ideas that no single one of them could pull off alone.

Under Kendra’s leadership, that community now spans roughly 1,000 members working together on over 100 projects — everything from graphene hull coatings that cut a ship’s fuel use by making it easier to go through the waves, to wave-power desalination, and an electric lobster boat built in partnership with the Membertou First Nation.

Kendra came to this from 25 years at Deloitte, the global consulting firm, where she last served as Chief Audit Executive. She’s been named to her region’s Top 50 CEO Hall of Fame, and she leads all of this from St. John’s, Newfoundland — a relatively remote vantage point, she’ll tell you, that is a feature, not a limitation of her job. Her thesis in seven words: you can go faster alone, but farther together.

We’re going to test that idea today — on collaboration, on who actually captures the value when small companies scale up, and whether the blue economy can grow and stay healthy at the same time, as well as what it takes to lead through a decade of constant disruption. We’ll get to the conversation right after this brief commercial break.

Hey, welcome to the show, Kendra. How you doing today?

Kendra MacDonald  2:46

I am doing great. How are you?

Mitch Ratcliffe  2:48

I’m doing well, thanks for joining me. I appreciate it. You live in a remote location in Newfoundland; I live in a remote location in southern Oregon, and we both somehow stay connected to the world. How do you do that? From your perspective, your seat is quite connected. How do you stay in touch with folks?

Kendra MacDonald  3:05

Yeah, so, certainly virtual. I started this role late in 2018, and by 2020 we were in the middle of the pandemic, and so it became very natural to connect virtually. So I think that has helped — it’s helped us connect across the country, and people got more used to virtual platforms.

But I do also spend a lot of time in person. I’m just coming from — I was in Ottawa, and I was in Halifax, and next week I’ll be somewhere else. So I do try to get face to face with our members as well, which, from St. John’s, Newfoundland — we’re a big country, so St. John’s to Victoria is about a nine-hour trip. Sometimes it’s easier to get to Europe than it is to get across the country. But I do spend a lot of time trying to get with our members, all over.

Mitch Ratcliffe  3:49

Your members are all related to the ocean, but why does the ocean belong at the center of the conversation now? For someone who doesn’t live near a coast, what’s the connection they should feel between the ocean, their personal health, and well-being?

Kendra MacDonald  4:01

That’s a great question. I mean, I think, in terms of — let’s talk about us as people first. Why the ocean matters: if you think about where your goods come from, over 80% of the goods that we get, whether we’re ordering from Amazon or ordering from wherever, they’re coming by sea. So there’s a huge amount of shipping that happens on the ocean. You think about the internet — most of our internet, if you’re getting it from some kind of overseas site, 98% of that is subsea cables that are going underneath the ocean.

If you look at then what the ocean means for the planet: 70%, but two-thirds, of the planet is ocean. About 50% of the oxygen comes from the ocean, so no matter where you are on the planet, oxygen matters. That’s really important, whether you’re close to the coast or you are not. It absorbs 90% of our excess heat, so a lot of the heat regulation is happening in the ocean. But 30% of our carbon — I don’t know about you, I learned in school all about the rainforest. I didn’t learn very much about the ocean, but the ocean actually plays a huge role in terms of being a carbon sink and absorbing excess carbon.

And then, I guess the last one, maybe 80% of our biodiversity on the planet — although some would argue there’s a lot of it undiscovered — but about 80% of biodiversity actually sits in the ocean. So when you talk about health, and we think about a lot of the natural solutions that we’re starting to see, whether that is natural fabrics going into fashion or natural ingredients going into beauty — we’re starting to see seaweed coming into both nutraceuticals and pharmaceuticals, as well as fertilizers, for example. All of those natural ingredients — increasingly, we’re turning to the ocean.

Mitch Ratcliffe  5:40

How does the Ocean Supercluster function to address all of the different kinds of issues that you just described?

Kendra MacDonald  5:46

So that’s a great question. We don’t equally address all of them. Where we really are focused, in terms of trying to grow the ocean economy for Canada, is acceleration of technology commercialization. So the bulk of our projects are in technology commercialization. About 50% of our projects are what’s called domain awareness, or ocean observation — so, how do we understand things better. That has a different flavor.

We are cross-sectoral, so we touch aquaculture, shipping, offshore energy, and we would see different flavors of those technologies being applied. So if you’re an aquaculture farm, you want to make sure that you’re using an underwater drone, for example, to be able to inspect your nets, to make sure that you don’t have escapes. You might be sitting in the Arctic, and you want to better understand what’s happening with the coastline, or be able to monitor diversity.

Increasingly, we’re seeing this trend toward dual-use technologies in defense, for example — so technologies that you can use to find a whale, you could also use, potentially, to be finding a submarine. And then, if you look at offshore wind: how do you do surveys better? How do you remotely monitor infrastructure in the ocean? So there’s all these flavors of how do we better understand the ocean to make better decisions, and also to be able to operate more sustainably across all of these different sectors.

Mitch Ratcliffe  7:03

Now, of course, you just described systems in which there are many stakeholders. Who’s involved in all of these conversations? What’s the structure of the investments that allows communities to participate?

Kendra MacDonald  7:14

Yeah, so we are a co-investment model, so we need to have at least two companies that are co-investing. In a lot of cases, we would also have broader collaborators. So if you look at, for example, in the aquaculture space — aquaculture touches a number of communities all along our coast. We would have a project, for example, on the West Coast that would include an Indigenous community as the final operator and participant in the project. So you’ll see the technology providers, you will see the users of the technology, and then, depending on where it is, you will also see a community problem that the solution is trying to solve.

Mitch Ratcliffe  7:55

When you joined this industry, were you surprised by the way it actually operates? Is it different than land-centered business?

Kendra MacDonald  8:05

Yes. And no. So, my background — I worked with a large consulting firm, was part of Deloitte. I’m an auditor by background, so I spent a lot of time looking at systems, and I was actually a systems auditor — so, on the information technology side of how information is produced to get to the financial statements. And so I had spent a lot of time looking at digitalization of industries. You’re seeing increasingly digital, whether it’s media or transportation — these trends — and so that same trend is coming into ocean, where you’re seeing more and more instrumentation to be able to get more information, make better decisions, all the same things that we are trying to do in a number of sectors.

Where it gets more complicated is the environment that you’re operating in. So we don’t have a data network now the way that we would — I know there are still remote parts on land, so we don’t have as good a bandwidth — but they get much more remote when you start going on the ocean. You’re trying to now put technologies into salty water, high pressure, low visibility, and so the operating conditions become much more difficult for the types of problems that you’re trying to solve.

Mitch Ratcliffe  9:14

This is a national sovereign wealth fund, or a variation thereon. Sovereignty is playing a greater and greater role in geopolitics right now, and you’ve said you can go faster alone but farther together. How does Canada need to work with the rest of the world in order to really leverage the investments that you’re making?

Kendra MacDonald  9:33

So, great question. We are part of what’s called the Blue Tech Cluster Alliance, and Canada right now is chairing that. That includes a number of clusters around the world — so right now it’s Canada, the US, Japan, Ireland, the UK, France, Norway, Portugal, and Spain. I think I got all nine; hopefully I didn’t miss anybody. And so we are constantly looking at how do we create conditions so that the companies can engage with each other and work together to be able to solve global problems, because if you look at the ocean, it’s all interconnected. Decisions that you’re making in one country do eventually work through, around the entire world.

And so, for these big challenges that we’re trying to solve for — can we work together to be able to move faster? Can we bring more breadth of thinking to a problem? I was somewhere the other day, and I said, you know, in some cases we’re competing, in some cases we’re cooperating. And so we’re trying to do that at a national scale, and we are also trying to do that at a global scale. So you are seeing more and more focus on what we call, in our defense industrial strategy, sovereign capabilities — so how do you build the sovereign capabilities, but how do you also work with your partners to be able to learn from each other and be able to go further together.

Mitch Ratcliffe  10:53

Collaboration like that isn’t easy. Where do you find that it becomes more difficult? What are the big challenges you’re facing right now?

Kendra MacDonald  11:00

Yes. So collaboration is, I would say, like any other relationship, right? Sometimes it works, sometimes it doesn’t. And I would say the devil is in the details. If you think about your personal relationships — or for me, with my husband — did we spend enough time in advance talking about how we wanted to raise our kids, or where we wanted to live, or whose career was the priority? All of those things. So that plays in. Now, you’re probably not signing on for life when you’re collaborating at a business level, but you need to spend the time really looking at: is what we’re trying to achieve consistent? How do we incent the teams? Are we going to get to a common outcome?

When we collaborate with other governments, for example, you look at political cycles, and at IP sharing — so are we very clear on background IP that we’re bringing, foreground IP, how that IP is being shared or held going forward? We are co-funding, so we fund a portion, the companies fund a portion. Are we clear on who is funding what? What happens if it starts going over budget? What happens if we’re not achieving the outcomes on the timelines that we intended? What happens if one company is achieving their outcomes, but the other one’s not?

And so it really does require a lot of discussion. We now have over 150 projects. You’ve got those that come to the table, I would say, with a light-touch thinking on their collaboration; you’ve got others that spend a lot more time thinking through it. And those ones that spend a lot more time thinking through it — not only do they have a better chance of success, we will often see them recognize the benefits. Because I think one of the key benefits of collaboration: we have a lot of small companies working together, and they don’t have all the capabilities to do everything. We are in a world where getting some of these capabilities is challenging, especially technical expertise. And so now, if you can work with a partner, you can deliver a bigger solution to a broader problem, and that helps you be able to get further than you would be able to get on your own.

Mitch Ratcliffe  13:04

97% or so of your projects are actually led by smaller startup businesses. How do you keep those small firms from getting swallowed when they sit down at the table with a multinational who might be a partner?

Kendra MacDonald  13:15

Yeah. So I would say, when we first created the Supercluster, that was one of the big concerns — that you would have these collaborations between small and large, and so the small would be at high risk of losing their IP. I would say we haven’t seen that, partially because we don’t have a lot of large companies; we have a lot of small working with small, so they are more hyper-aware of this challenge. But also, the model was really designed to allow the companies to choose how they bring their IP in, and then how it’s shared going forward. A lot of our larger companies — and maybe it’s just the nature of the companies that we work with — they’re really interested in being first customer or having early access to the data, but they’re not necessarily trying to take over the IP of the company in terms of how it’s designed.

We also do actually have an IP director and some pretty strong guidelines within the program, so that IP director is someone that companies can consult. To make sure that — smaller companies don’t necessarily have the IP expertise — so, how do we help them in thinking through the types of questions they want to be asking? How do we make sure we have an IP chart in every one of our agreements that lays out the background IP and the foreground IP, and then someone that helps the companies to be able to work through that? So it’s not perfect, but we haven’t actually seen, knock on wood, at this point, a lot of concerns around IP going to the larger companies. What we do see is we shine a light on these companies, and then they get internationally acquired. So that is the actual question: how do you maintain the benefits to Canada, in a program that is Government of Canada–funded, in a situation where you’re seeing them scale with funding that comes from somewhere else?

Mitch Ratcliffe  15:00

So would you describe that governance model as templated, applied across all deals, or are each of them negotiated? Is the governance negotiated individually?

Kendra MacDonald  15:09

So I would say there is flexibility within a frame. You have flexibility in terms of how you do the sharing, but everyone has to think through the sharing. Same thing with governance — so we have a steering committee model, and you can think about who’s on that steering committee, and you have some flexibility. And then there is some common reporting. So there is definitely a common structure, and then you have some flexibility within your particular project on how you want to operate with your partners.

Mitch Ratcliffe  15:38

Earlier, you mentioned that sometimes collaboration doesn’t work, and that learning is really important to the progress that the industry can make, even though the individual entity didn’t make the success expected. How do you integrate that kind of learning, and what’s your tolerance for risk in the context of the lessons you need to learn about such a big topic that we understand so little about?

Kendra MacDonald  16:02

Yeah, so that’s a great question. We do a number of member education sessions, and talking about experience with collaboration is one of those things. Certainly we spend more time, for example, on collaboration with Indigenous communities, because speed — and speed of trust, and how you engage — is very important for the success of the project. It’s important always, but when you get into more complexity around different cultures, we try to do some education and some help and some learnings there.

And then I would say our evaluators, now that we’re 150-plus projects in, they are getting better at the types of questions to ask. There is a presentation that is done by the various participants, and so you can ask very pointed questions and get a sense of: are these three individual companies that are giving you a presentation, or are they companies that have actually thought this through together — are they synchronized in terms of their responses? You can tell that there is sort of some magical sauce that is already being demonstrated, in how they work together in that presentation.

Mitch Ratcliffe  17:10

I think we have the lay of the land — or maybe the better way to put it is the contour of the shore. I want to take a quick commercial break, folks. We’re going to be right back to continue the conversation.

Welcome back to Sustainability In Your Ear. Let’s continue my conversation with Kendra MacDonald. She’s CEO of Canada’s Ocean Supercluster program, and it’s a national, industry-led innovation cluster focused on transforming Canada’s ocean economy through collaboration, technology, and, importantly, sustainability. Kendra, let’s talk about some phrases that listeners should understand, and the first one is sustainable aquaculture, which makes some environmentalists nervous, given the history of the industry. What does getting sustainable aquaculture right look like, and how do you hold the line on that?

Kendra MacDonald  17:58

Yeah, so I think a couple of things are important to understand around aquaculture. The first is that it is already one of the most sustainable sources of animal protein in the world, when you compare it to land-based agriculture, for example. The second is that it has already tipped — so if you look at since 2022, we actually get more of our fish coming out of aquaculture than coming out of wild fishery. So we are predominantly aquaculture around the world. And then the third one, and the World Bank, I think, just came out with this recently: we’re expecting to see possibly up to 22 million new jobs by 2050 in aquaculture. So it continues to be the fastest-growing source of protein.

Now, having said that, agriculture has been around much longer, and so has developed maybe more sustainability practices. Aquaculture is trying really hard to catch up really quickly. And so we need to make sure — and any of the aquaculture farmers I talk to recognize they want to make sure — that it is sustainable. So you are seeing a lot of technology solutions that are being brought to make sure that it is doing more good than harm, whether that is genomics, for example. We have a project on the West Coast that is looking at how do you look at genomics data to be able to improve animal health. We have a project that is looking at alternative sources of food — so how do you create a different food out of methanol as an input — because fish feed is part of the big footprint of aquaculture.

How do you reduce the die-offs, which is another big risk? That’s tied to environment, so now you’re seeing a change — the heating of waters that happens really quickly, and then you end up with a die-off. So how do you manage the cages? How do you manage the environmental monitoring and tracking to be able to reduce that risk? So it is already a sustainable source of food; we need to do much better, or continue on that journey as fast as we can, to make sure that the aquaculture farms are minimizing their input. So it is definitely a concern to continue to monitor, but I think there’s been a lot of progress made and will continue to be made.

Mitch Ratcliffe  20:16

We’ve had a few folks who work in the area on the show, and of course it remains controversial as to whether or not we’re recreating the concentrated animal feeding operations that we have on land in the sea. The next phrase that I want to ask you about is the blue economy, and that can sound to a lot of people like a license to industrialize the ocean. How do you think in terms of keeping growth and protection from becoming a zero-sum trade-off in the projects that you fund?

Kendra MacDonald  20:42

Well, that’s a great question. So, just as we launched in 2018, the High Level Panel on Sustainability for the Ocean at that time had 18 countries — it continues to increase in terms of the number of countries that are involved — and they really talked about protection, production, and prosperity as interlinked. And so that is one of the things that we really focus on. It’s not always that we have our environmental objectives and our economic objectives linking, but actually, a healthier ocean is also a more productive ocean. So that’s one of the things that we focus on: if we can improve the health of our ocean, that actually also improves the economic output of the ocean, which is really important.

I think the other piece that is really important is — and the High Level Panel came out with a report that said about a third to half of the solutions around improving the overall sustainability and health of the planet come from ocean solutions, whether that is offshore energy or more sustainable protein or carbon dioxide removal. So we need ocean to be a really important part of the overall health-of-the-planet conversation. So what excites me is, because they come together, a lot of the solutions that we see are, as a minimum, trying not to cause harm, and in a lot of cases trying to leave the ocean better than they found it, in terms of the solutions they’re developing.

Mitch Ratcliffe  22:05

We touched on sovereignty in the first segment, and I want to ask about this in the context of the fact that most of the ocean is not owned by anybody — it isn’t claimed by anybody. How do we avoid a tragedy of the commons as we move toward a more comprehensive aquacultural solution to humanity’s food and protein needs? In particular, are there treaties? Are there agreements that we need to have in place, or are we setting the stage already with the legislation and agreements that are in place now?

Kendra MacDonald  22:38

Yeah, so there are a number of agreements that are in place, and this is not my area of expertise, but, for example, I just completed my master’s, and I did one of my courses on maritime law. So you look at hundreds and hundreds of years of law trying to govern international shipping, which is very international in terms of moving through international waters as well as moving through international ports. You are seeing it now — so in January, they approved, through the United Nations … a lot of the agreements need to be agreed to, obviously, by multiple countries, and so the Biodiversity Beyond National Jurisdiction agreement was approved. So, how do we manage and protect biodiversity in our common waters?

You’re also seeing the conversation play out in the Arctic, as more waters are becoming more accessible — and so what does that mean in terms of rights and access? I haven’t seen it play out as much in terms of food, particularly; I see it much more in terms of things like carbon dioxide removal solutions and protection of biodiversity. But how we use those waters as they become more accessible, as we have more technology, as we have more instrumentation, and how we work together, is really important, and it does require international agreement. And so, how do we get — especially in this moment in time that we’re in — how do we get the international alignment that we need to protect our ocean and manage what happens in the deep ocean, at the same time as we have a shift in the geopolitical environment?

Mitch Ratcliffe  24:07

The times we’re in are challenging. The Trump administration, the week that we’re speaking, removed fishing protections in three protected marine areas, with — for lack of a better word — a rogue regime stirring up the entire sustainability conversation globally. Is this an opportunity for Canada to step forward, in Mark Carney’s terms, for a middle power to consolidate a bloc and really begin to lead the world in a different direction?

Kendra MacDonald  24:35

So, I think so. I think that Canada was working hard to step forward already, and this allows us to provide additional leadership in this space. We have seen, with the Ocean Supercluster and just the growth in the blue economy overall, that Canada has some really strong capabilities. You talk about marine protected areas as a perfect example — so we have worked hard in terms of increasing our marine protected areas. Now, looking at how do you monitor and actually ensure the effectiveness of those areas — I think that’s really important as well.

But yes, I think we are seeing more interest in working with Canada, and interest in Canadian technologies. I used to say, you know, internationally, no one’s really paying attention to what’s going on in Canada. I think that has changed in terms of what we are seeing, and so there is an interest. I think the US is still an important part of the Canadian conversation — they are important neighbors, they are an important market — but I do think that Canada has a strong … we’re seeing the whole climate conversation moving, but we have a strong reputation for clean tech, and I think clean tech and ocean tech very much align, and so there’s an opportunity to lead a broader conversation around the world.

Mitch Ratcliffe  25:49

Is more capital flowing to Canada now that the United States is a place where international investors are treading more carefully?

Kendra MacDonald  25:57

That’s a great question. Certainly, the flow of capital is a huge focus for us, and continues to be a challenge for our companies. So I think, on the one hand, there is more interest. On the other hand, you are seeing a slowdown in access to capital overall, you’re seeing a change in some of those models, and you’re seeing — certainly in sustainable solutions, in some of these big areas — the whole blue finance conversation is really accelerating. So Sustainable Development Goal 14, which is life below water, is the least funded of the Sustainable Development Goals. And so there is a tremendous focus on being able to increase the creativity of financial models — it hurts my accountant heart to say “creativity” — but trying to find better ways to bring philanthropic dollars and the capital markets together to be able to fund some of these solutions.

So that is a beyond-Canada challenge. Capital continues to be a challenge. How do we help our companies scale in Canada? We don’t have the funds focused on the blue economy the way that you are seeing them now emerge in a number of countries, certainly in Europe, for example. But more broadly, there’s a bigger push to be able to get more investors to be focused on the blue economy — opportunities, but also challenges.

Mitch Ratcliffe  27:16

When I was doing some of the reading to get ready for this conversation, I noticed that you said the shipping sector’s decarbonization efforts are not as slow as they used to be, which is sort of faint praise. What’s actually changed, and how do you see Canada leading that movement versus being one of the followers — or is being an important follower more important?

Kendra MacDonald  27:36

Yeah, so I think we are not as big a player in the international shipping space, but what is driving that is international regulations. You have seen a bit of a slowdown in terms of the push to decarbonization, but the International Maritime Organization is really pushing for decarbonization. You are also seeing the bigger companies, as they’re focused on their supply chain and decarbonizing throughout their supply chain, that that also puts a push on the shipping companies in terms of dealing with decarbonization.

You are also seeing an acceleration of some of the solutions that are being developed to help, because it’s considered a hard-to-abate industry. The alternative fuels conversation continues to move forward, so you are seeing this focus in the short term on how do you improve operational effectiveness — so something like better prediction of weather. If you can change the route just a little bit, you can actually save on diesel, and that obviously helps with emissions. We have a project in ports that is actually looking at how do you park the boats more effectively in the ports to be able to reduce emissions, how do you move the cargo around more efficiently to be able to reduce emissions. So there’s an operational effectiveness piece, but then there is this broader agenda of how do you get alternative fuels that are significantly less emissions.

Mitch Ratcliffe  28:55

We’ve been talking in various ways about systems throughout this conversation, and you’ve made a lot of comments about women’s leadership and also the AI readiness gap, which, if we can solve it, will allow us to see into those systems much more deeply than we do now. What are you seeing in those areas, and what would you say to a female leader who is hesitating at the edge of a hard decision right now — where they don’t necessarily feel like they have the data, or they feel like they have the data, but not the commitment of a group of stakeholders? What’s your advice?

Kendra MacDonald  29:26

Yeah, so I would say dig in and try it. I wouldn’t necessarily say that for the big-ticket item to start with — so ideally you are doing some testing and things before you get to that item — but adoption is a huge challenge when it comes to AI. And I can speak to that, certainly, from a Canadian perspective, because Canada are leaders in AI research, and yet we are much slower to adopt the technology. And that’s not just an AI problem; we see that in a lot of technologies that Canada has developed, that they’re slow to adopt. But we know that AI is fundamentally changing, or going to fundamentally change, the way that businesses operate.

I think we’re in an interesting moment in time where companies are looking and saying, well, I’m not sure I’m getting the value of the spend, I’m not sure that we’re actually measuring the productivity savings, I’m doing pilots, but I don’t necessarily have enterprise-wide impact. And so if you, as a female leader, can really cut through the noise, continue to experiment, and really try to reinvent — I heard a futurist speak the other day, and they said, you know, use a comic strip to reinvent what the world could look like. So how do you fundamentally reinvent what the world could look like, and then start experimenting to be able to get there?

But I think the key thing is, nobody should say — no one is an expert. We don’t have a lot of experts; we’re all learning through this journey together. So make sure that you stay on the learning journey, and don’t just stay on the side waiting for it to all play itself out, because then you will be too far behind.

Mitch Ratcliffe  30:59

Do you feel like AI is a key to unlocking the major challenges that we face, or is the jury still out?

Kendra MacDonald  31:07

I think, in my experience — you talked about the internet — in my experience with technology, it is less about the technology, and it’s more about being able to articulate the challenges. I think what AI allows is a very powerful technology that can tackle these challenges, maybe in a way that other technologies previously couldn’t. I went through the blockchain and cryptocurrency, when that was happening; the internet, when it came in — it was going to fundamentally change businesses. I think the hard part is actually defining the problem. And so I think if you can better define the problem — I don’t think it’s just about the technology, I actually think it’s about the business models. It is about the overall systems and processes that surround it.

If we focus only on the technology — and I think that’s the moment that we’re in, as companies are trying to find their AI strategy — well, it’s not. It’s a business strategy that’s enabled by AI. You might not need an agentic AI; you might just need a much more powerful database and analytics tool that doesn’t take you right out on the edge of the technology, but would be much more efficient in solving your problem. And so that’s the trick: stepping back and saying, what is the problem we’re trying to solve? Globally, what are the problems that we’re trying to solve? And then how do we bring these much more powerful tools to be able to solve that problem in a different way?

Mitch Ratcliffe  32:24

What does Canada’s ocean economy look like in 2035 if things go the way that you would like them to go? And what’s different? What does it mean for the rest of the world, not just for Canada?

Kendra MacDonald  32:37

That’s a great question. So we’ve actually set ourselves an ambition, 2035, which is five times growth. Canada has the longest coastline in the world, and we have the fourth-largest ocean territory, but we don’t even contribute world-average percentage to our GDP. So we are definitely under scale, and so we’re working very, very hard to be able to grow our ocean economy. And so I think, if we do that — although if we grow by five times, it’s still a relatively small percentage of the $3 trillion US dollar economy that’s expected by 2030, and in fact even bigger; they’ve got now projections out to 2050.

And so I think, in that situation, Canada is — certainly in terms of the Arctic conversation, half of our coastline is in the Arctic, and the Arctic will continue … I mean, imagine what the Arctic looks like in 2035. So industry is different, community is different, and I think we can be a big part of the leadership in that conversation, but also with the capabilities that we have around ocean technology, and making sure that we are relevant to industries all around the world. So it means a lot more domestic activity in Canada. It means using our own waters to be able to have aquaculture — aquaculture is a very small percentage of our overall coastline — so stronger domestic, but also stronger leadership in terms of exporting those capabilities to the rest of the world, and being a key player in the Arctic conversation.

Mitch Ratcliffe  34:02

What keeps you up at night when you’re thinking about Ambition 2035? What are the things that need to go right that are absolutely critical to the success — not just of that plan, but of our transition to a more sustainable economy overall?

Kendra MacDonald  34:16

Yeah, so our ability to scale solutions is maybe the number one thing that keeps me up at night, in terms of how do we ensure that we are not just bringing solutions to a certain size and then they’re going somewhere else to scale, or they’re not scaling at all. So we have — I talked about this challenge — how do we get enough blue financing to be able to scale the solutions that we need, whether that’s food, whether that’s energy, etc., across the sectors? I think it’s quite lumpy in terms of which ocean sectors get funding and which ones do not. And so, you know, there’s lots of great ideas out there, but can we scale the ones that we need for the planet that we want, fast enough?

Mitch Ratcliffe  35:04

How do we scale while also recognizing that local ecosystems are unique? In other words, how do we avoid turning the ocean into the monoculture environment that land-based agriculture is?

Kendra MacDonald  35:17

Yeah, so that’s a great question. I think community. So I had the opportunity to spend some time in South Africa, with Ocean Innovation Africa, and the number of things that they are doing in the ocean economy — and I spent some time in Northern Canada, and it was surprising, the parallels in the community conversation. And so, how do you make sure — the ocean touches so many communities, it is rural and urban, it is all along our coasts — how do you make sure that how you do that is inclusive of those communities, and the needs of those communities, and is right-sized for the needs of those communities?

So if you look at here, we have Fogo Island and the Fogo Island Inn and the Shorefast Foundation, and one of the things that they’re focused on, in working with communities, is there’s not a same-size-fits-all in terms of meeting community needs, economic development, inclusion, and capacity building — but that we need to be thinking that through as we build out these solutions. I think communities is a key part of this, but I think ocean is a key part of the solutions for sustainable, prosperous communities.

Mitch Ratcliffe  36:29

The Ocean Supercluster does a lot of work. It’s really interesting. How can people follow along as you continue to move this rock up the hill?

Kendra MacDonald  36:36

Absolutely. So you can certainly find us easily on oceansupercluster.ca, and we have a newsletter that you can sign up for to get more information. I also personally write on some of the opportunities — certainly investment opportunities — in the ocean economy. I have Saltwater Signals, which is my Substack that I write, and so between those two, you should be able to find lots of information. If, for whatever reason, you can’t, I’m also very easy to find on LinkedIn, so feel free to reach out to me and get more information.

Mitch Ratcliffe  37:08

Kendra, thanks so much. It’s been a fascinating conversation. Really appreciate the time today.

Kendra MacDonald  37:12

Thank you.

Mitch Ratcliffe  37:19

Welcome back to Sustainability In Your Ear. You’ve been listening to my conversation with Kendra MacDonald, CEO of Canada’s Ocean Supercluster, a national, industry-led effort to grow the blue economy by getting startups, century-old fishing and shipping firms, Indigenous partners, researchers, and global corporations to co-invest in projects. You can learn more about the Supercluster’s roughly 1,000 members and 150-plus projects at oceansupercluster.ca — Ocean Supercluster is all one word, no space, no dash. And Kendra writes about ocean economy investments on her Substack, which is called Saltwater Signals.

The ocean covers more than 70% of the planet, produces about half the oxygen we breathe, and absorbs something like 90% of the excess heat and a third of the carbon that we put into the atmosphere. We’ve spent most of human history treating the ocean as a place to extract from rather than to invest in or to preserve, and frankly, it was a pretty big thing, and we were overawed by it. But now we have a better understanding of how the systems work. Kendra’s model is a wager that the way to change that is structural, not inspirational. You can go faster alone, she says, but farther together. And the interesting part is what “together” actually requires, and that’s where I want to spend these few minutes.

First, she said, the devil’s in the details. Collaboration in the blue economy doesn’t succeed because everyone loves the ocean; it succeeds because partners do the unglamorous upfront work of establishing who owns background IP, who owns foreground IP, who funds what, and what happens when a project runs over budget — as well as what happens when one company hits its milestones and the other doesn’t. These are the kinds of rules of the game that make it feasible to play for small and large companies, communities, and investors. Kendra said her Ocean Supercluster evaluators have gotten good enough, 150 projects in, that they can sit through a pitch and tell whether three companies actually planned together or just showed up in the same room and tried to make a sale. The ones who did the hard prenuptial work aren’t only more likely to succeed, they are more likely to capture a larger share of the benefit.

That’s a lesson that travels well beyond saltwater. It’s the same discipline that Kevin Shaffer of the Milwaukee Metropolitan Sewerage District described when we talked in January about how wastewater utilities build successful cross-sector partnerships. The value is real, but only if the governance is there first.

Then there’s the limits of any early-stage accelerator. The capital can only go so far, and Kendra gets points for raising that issue before I did. The Supercluster is funded by the Government of Canada to de-risk small Canadian companies, and it works. In her words, the program shines a light on those companies, and they get acquired internationally, scaling on capital from foreign investors. That’s the value-capture problem at the heart of every public innovation program: the country that pays to nurture a technology isn’t guaranteed to be the country that profits when it scales.

It connects to the bigger gap that she flagged: blue finance. Sustainable Development Goal 14 — that’s life below water — is the least funded of all the SDGs, and the funds dedicated to the ocean economy that are emerging in Europe haven’t really emerged in Canada yet. You can build the best pipeline of companies in the world and still watch the returns sail off into another harbor, or have no financing show up in the first place, so that things don’t get off the ground. That tension between strong science and thin capital is the thing that she says keeps her up at night, and it should keep policymakers up at night as well.

Finally, the reframe I want all of us to think about is that health and productivity are not a trade-off. In fact, they cannot be if we’re going to survive as a species. The fear baked into the phrase “blue economy” is that it’s a license to industrialize the ocean, and Kendra’s answer is that a healthier ocean is a more productive ocean, and she frames protection and prosperity as interlinked rather than opposed. And I don’t think that’s rhetoric.

Mitch Ratcliffe  41:17

Aquaculture quietly passed a milestone in 2022: for the first time, farmed aquatic animals outproduced wild-caught fish — that is, according to the UN Food and Agriculture Organization — and the sector is now the fastest-growing source of animal protein on the planet. Whether that growth recreates the worst of factory farming or leaves the water better than it found it depends entirely on whether we accept her premise that the two goals pull in the same direction. And that’s also the circular economy logic that Elizabeth Blankenship Singh of Overlay Capital described during another interview earlier this year. She said the system only works long-term when doing the right thing and making money are united in a clear mission.

There’s a sharp edge under all of this, and it’s why the timing of this conversation matters. The week that we recorded, the Trump administration in Washington signed a proclamation reopening nearly half a million square miles of Pacific Ocean to commercial fishing, and that was the third such rollback in 16 months. So you have one model that treats the ocean as a commons to protect and co-invest in, and another that treats marine protection as an obstacle that must be cleared out of the way. Kendra thinks this opens a door for Canada — with its longest coastline in the world and a credible clean-tech reputation — to lead a different conversation than the one that’s starting in Washington. And perhaps so, but leadership in the blue economy will be measured the same way Milwaukee’s Kevin Shaffer measures a utility’s value to the community: not by what you announced, but by what’s still standing two or three decades from now. Canada has set itself a 2035 goal to grow its blue economy fivefold, and we’ll be watching to find out whether the capital shows up to match that amazing coastline.

Hey folks, if this conversation gave you something to think about, please share it with one person who would find it useful, because you folks are the amplifiers that spread more ideas to create less waste, and word of mouth is how this show reaches its next listener. You’ll find more than 500 episodes of Sustainability In Your Ear waiting for you in our archives on Apple Podcasts, Spotify, iHeartRadio, Audible, or whatever purveyor of podcast goodness you prefer. Please subscribe and leave a review, and pass an episode along. Thanks for your support. I’m Mitch Ratcliffe. This is Sustainability In Your Ear, and we will be back with another innovator interview soon. In the meantime, folks, take care of yourself, take care of one another, and let’s all take care of this beautiful planet of ours. Have a green day

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