THE shipping industry’s siloed approach to digital innovation is still holding back the maritime sector from making the advances seen in other sectors such as finance.

According to Bjørn-Johan Vartdal, Digital Director and head of Maritime Incubator at DNV, the ship and the shipping industry needs to be viewed as a system, rather than as a series of subsystems.

Companies can point to a clear trend of digital adaptation, but innovation is only happening within the individual subsystems, rather than to the benefit of the industry as a whole, argues Mr Vartdal in the first of a series of special Lloyd’s List Expert Focus sessions.

“Many companies are basically delivering a very good system, and innovation is happening, but the problem is that they are not sharing information from that system, to allow for optimisation. It is sub optimisation because there is no sharing of data between different systems and that is inhibiting the digital innovation across the industry,” said Mr Vartdal.

Digitalisation has never been the end game for shipping companies, rather it has been a means for developing new value drivers and new business models. But the shipping industry has struggled to identify and commercialise new value drivers and new business models.

The focus of digital investment continues to be on improving existing operational efficiency and reducing costs. Experience from other industries, however, suggests that additional value can be created if companies can reinvent the business models.

“If you're working in one of these companies creating the systems, then you have a lot of innovation within your own product, but you're not necessarily allowing for other third party start-ups to generate value off the data that is produced on and off the ship,” said Mr Vartdal.

The development of Fintech in the finance sector offers lessons for the maritime sector in this regard. An EU Directive mandating data transparency paved the way for a generation of Fintech innovations and ultimately spawned an entirely new sector by breaking down siloes across financial institutions.

“The Fintech explosion happened because start-ups were able to create products out of the data that was flowing freely — we could see a similar effect in the maritime sector if only we could enable a freeing-up of the data to spark that innovation revolution,” said Mr Vartdal.

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