Earlier this month, I had the opportunity to contribute to a course on Intellectual Property and the Blue Economy, where the focus was on a deceptively simple question: how do we finance innovation in ocean and coastal sectors, particularly in small island developing states (SIDS, also known as great ocean states)?
The blue economy is often framed in terms of technology: new monitoring tools, aquaculture techniques, digital traceability systems, blue carbon methodologies. But innovation does not scale on technology alone. It scales when capital flows.
And capital flows when risk is understood, value is defensible, and governance is credible.
In many discussions of blue finance, intellectual property (IP) is treated as a technical or legal detail. In practice, it is often a decisive factor in whether innovation becomes bankable.
Innovation without finance does not scale
Across island and coastal economies, there is no shortage of promising solutions—from reef restoration models and AI-enabled fisheries monitoring to seaweed enterprises and nature-based coastal protection. The constraint is not ideas. It is investability.
Investors need clarity on future cash flows, ownership structures, and legal certainty. Without these, projects remain pilot initiatives rather than scalable enterprises. Financial innovation—whether through blue bonds, blended finance structures, or impact investment vehicles—helps bridge this gap. But so does IP governance.
IP as a lever for bankability
In the blue economy, IP is rarely just about patents. It includes data, algorithms, methodologies, certification standards, trade secrets, and local know-how. These intangible assets shape who captures value and how revenue models are structured.
Clear IP arrangements can:
- Reduce legal uncertainty,
- Enable licensing or revenue-sharing models,
- Support defensible market positions, and
- Attract risk-adjusted private capital.
Conversely, unclear ownership of data or methodologies can deter investors and create disputes that undermine projects at an early stage.
The equity dimension in small island states
For SIDS, the IP–finance nexus is particularly sensitive. Innovation often draws on traditional knowledge, community stewardship practices, and locally generated data. Without appropriate safeguards, including benefit-sharing mechanisms and principles such as free, prior and informed consent, value can be extracted offshore, leaving limited long-term gains domestically.
This is not simply an ethical issue. It is a structural one. Projects that lack social legitimacy face heightened reputational and operational risks, which in turn affect their bankability. Increasingly, financiers recognise that equitable governance and community engagement are prerequisites for durable investment.
Aligning systems, not just projects
As blue finance accelerates globally, the challenge is not merely to fund more projects. It is to align financial structures, IP systems, and governance frameworks so that innovation strengthens resilience rather than deepens dependency.
For island economies, this alignment can determine whether the blue economy becomes a source of long-term value creation or another channel through which value flows outward.
Finance, innovation, and intellectual property are often discussed in separate rooms. Bringing them together, thoughtfully and deliberately, is essential to building resilient and inclusive ocean economies.