Innovation in product and services in the shipping retrofit industry: A case study of ballast water systems

The green growth strategies in Western Europe depart from the premises that environmental technologies are strategic for employment creation. Some countries wish to position themselves as world leaders in cleantech innovation and increase their exports and thus address internal unemployment. Similarly, given the deindustrialisation dynamics to regions with lower manufacturing costs, it is argued that a combination of knowledge intensive and service-based economy will eventually fill the gap left by manufacturing industries. To create added value to their products, some leading firms are increasingly developing product-service systems. It is however, argued that product-service systems are not always sustainable, and thus little evidence connect them with green growth. To fill in this gap, we are carrying a case study guided by the following research question: “How the ballast water treatment regulation could create innovation in green products and services in the maritime retrofitting industry?” Our case study focus on business models for the development, installation and operation of ballast water management systems in Denmark. We engaged the perspectives of ship-owners, equipment manufacturers and maritime service companies through in-depth interviews, document analysis and observation. The findings support the initial claim that the ballast water treatment regulation may create new market opportunities for service providers to shipyards and shipping companies in design, installation and retrofit of ballast treatment technology. However, the market is in early stages and as consequence business models are flexible. The main actors have started to consider the creation of product-service systems, especially in the operation stage of the technology. If such product-service systems are put in place, there could be employment creation in medium size maritime service companies.