Solving a billion-dollar maritime problem through open innovation

Using open innovation to solve the biggest challenges in shipping

Innovation programme ‘Rainmaking Trade & Transport Impact’ is resulting in fantastic opportunities for young companies and startups to develop new solutions for the maritime sector. Read on to know what this is all about and what went down in the final round in Hamburg recently?

Text: David J. Cord Photo: Wärtsilä

"If you want to understand Wärtsilä’s philosophy about partnering with startups, think open innovation,” says Vesa Marttinen, Director of Cruise, Ferry and Yacht Business at Wärtsilä. “This is how we find the right partners.”

In December 2018 Wärtsilä began working with Rainmaking, a corporate innovation and venture development firm. The goal was open innovation: how to find the most vibrant startups and scaleups to solve real-world problems in the maritime sector and create the greatest value.

The result was the Trade & Transport Impact programme, which connects startups and corporations in the maritime, cargo transport and logistics sectors. In addition to Wärtsilä, other participants include the cargo corporation Cargotec and the satellite communications corporation Inmarsat.

Finding the perfect partner

“We started by identifying specific areas where we see the potential for major disruption,” Marttinen says. “For Wärtsilä, the main theme was safety and security.”

The safety and security theme covers all aspects of being safe in a maritime environment, from incident analysis of equipment to better vessel maintenance. Other focus areas in the programme include smart cargo handling, optimised terminal solutions, efficient and sustainable cargo flow and real-time vessel operations.

Rainmaking identified over 600 candidates among the best maritime startups in the world. A series of rigorous selection processes narrowed the participants to fourteen startups who then met with the corporations to begin working on concrete issues. In-depth interviews were then conducted to understand their offering and ensure that the aims and future plans of both parties are aligned.

“This is very intense collaboration on our selected topics,” Marttinen continues. “We identify the challenge and Wärtsilä provides basic data and support to the startups in order to develop a preliminary solution.”

The Trade & Transport programme meshes perfectly with Wärtsilä’s venturing model, a guide for how the company interacts with startups. It offers different entry and exit points, depending upon which is the best way to collaborate.

The Wärtsilä venturing model

Wärtsilä might work with startups in corporate innovation programmes such as the Trade & Transport Impact programme in the maritime sector or with start-ups chosen through the company’s own SparkUp Challenge where companies and scale-ups with relevant solutions, get to cooperate with Wärtsilä in its Digital Acceleration Centres in Helsinki or Singapore. Partnering could involve a joint go-to-market opportunity while Production would be a joint venture with Wärtsilä as a shareholder. Finally, the Mergers & Acquisition route allows Wärtsilä to purchase the startup and carry the collaboration forward.

Marttinen stresses that there are many different ways to work with a startup, but they all involve open innovation and collaboration. By co-creating solutions, in an ecosystem, we provide better products and services more quickly and more efficiently to customers.

“We’re seeing more growth companies who are interested in partnering with us,” he says. “By working with them we gain the agility to develop underserved markets.”

The final face-to-face meetings between the corporations and startups, the so-called “Launch Days” in the Trade & Transport Impact programme took place in Hamburg on 9–10 May. Hamburg was picked as the location for good reason.

“We are working with startups from all over the globe, and Hamburg is a convenient location,” Marttinen says. “Also, Hamburg is one of the great cities of the world where we are seeing significant activity among maritime growth companies. In addition to Hamburg, other major sources of maritime innovation are the cities of New York, London, Rotterdam and Helsinki. The keys to disrupting the industry will most likely come from these five cities.”

Solving a billion-dollar maritime problem through open innovation2
Launch Days event in Hamburg.

Over the finish line in Hamburg

The mood at the “Launch Days” event in Hamburg was electric with the teams working to finalise the cases and verify how to move forward. At this stage in the process, both the startups and corporations had come to know each other’s strengths and offerings, making communicating with each other seamless.

“Testing and familiarising with new use cases is the added value we get out of this,” says Jacob Grieg Eide, Chief Business Development Officer at ScanReach. “We have really been able to go directly into the real discussion on business models and joint value propositions with the corporates. The programme also brings us increased knowledge about corporates’ daily operations and helps us to adjust our offering.”

This inside look may also be what finally enabled ScanReach to partner with Wärtsilä. While a number of potential collaborations were identified, ScanReach’s solution relating to onboard connectivity, and wirelessly transmitting data inside a ship in confined and closed spaces, helped it past the finish line.

“Our technology can provide Wärtsilä with a competitive edge using wireless connectivity technology in existing equipment,” says Grieg Eide. “It will enable us to develop and explore so many new products and revenue streams, even potentially enabling a new economy.”

With the ‘launch days’ done, now it is time to determine the road ahead together with ScanReach. Or, as Melvin Mathews, Director, New Businesses – Voyage Solutions at Wärtsilä says, “It is up to us to roll up our sleeves and sprint together to solve challenges in the maritime industry.”

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