Appendix 3: Environmental Scan

Appendix 3: Environmental Scan 2018-2024 …and Beyond

 

Background

As part of our strategic planning process, Maritime College undertook an environmental scan to survey and interpret relevant external factors and trends in order to determine their effects on and the implications for the College. This environmental scan primarily looked at the period of the strategic plan itself, 2018-2024. However, in some cases, the real changes that will affect our graduates will occur outside this period. Therefore, we looked at trends that will require us anticipate changes beyond 2024 that the College must address to prepare our graduates for a different industry than the one they enter.

For example, while most industry experts agree that ships and logistics systems will become increasingly automated, autonomous ships and ports may not emerge on a large scale for a decade or two. Therefore, the College needs to both anticipate changes beyond 2024 and respond now to the increasing impact of digitalization, system connectivity and automation while still preparing students for the current work environment they will enter upon graduation.

This applies to both our license and internship programs. Maritime College needs to be on the cutting edge of every facet of the industries we serve. Our graduates must have the skill sets to succeed in the job market of today and thrive in the industries of tomorrow.

Process

The first step of the environmental scan was to gather information about the world and environments in which Maritime College operates and supports. These include:

  • World Trends
  • Technology
  • Energy
  • Maritime Industry
  • Higher Education
  • Maritime Education and Training (Competitors)
World Trends

Factors and Trends:

The world population is expected to grow by 80 million people per year and reach 8 billion by 2025. Most of this growth will occur in developing countries. As a result of rising education levels especially in Africa and Asia, the middle class consumer population is expected to grow by 130 percent, with Asia accounting for most of this growth. Concurrently, people will live longer and the average age of the over-60 population will increase. This increased growth will have a negative impact on the world’s climate and ecosystems.

 

Effects:

The impact of these population trends will result in increased global gross domestic product (GDP) and shifts in economic power, international trade and transportation. Asia’s share of global exports is expected to continue to grow and double to 39 percent by 2030. However, the increase in GDP will be tempered by growing global net public debt, which will put severe constraints on the capacity of governments to respond to crises and build/rebuild the necessary infrastructure.

 

Unknowns:

Given the political environment, the rise of nationalism versus regionalism and globalism, regional rivalry, competition for resources and questions concerning existing and new trade agreements, a degree of uncertainty exists regarding short-and long-term market stability and continued economic growth.

 

Implications for Maritime College:

These shifts in economic power, international trade and transportation make it essential that Maritime College recruit more international students from emerging and developing countries. Opportunities exist to partner with international business and educational institutions in the areas of transportation, logistics, engineering and energy. Furthermore, our students need to be more aware of the geo-political and international economic factors that drive the industries we support. This will require curricular changes and increased opportunities for study abroad and international internships.

Technology

Factors and Trends:

The integration of digital technologies into everyday life – digitalization – will help society do things faster, better and more efficiently. The development of sensor technologies and smart technologies will continue to accelerate. Although in its early stages, machine learning is already being incorporated into everyday technologies (e.g., “Alexa, can you please ship this…”). Along with these advances, data analytics by sophisticated computers and programs will enable the development of autonomous systems that are situationally aware, capable of making decisions and adept at learning. The connectivity of systems will improve with ubiquitous communications systems. We will also see significant advances in 3-D printing technologies in terms of capabilities, scope and materials.

 

Effects:

The ongoing transition from automatic to autonomous systems over the next decade will result in increasingly complex systems. More integrated and complex cyber systems will require cyber resiliency against malicious or inadvertent attacks. Part of the solution to providing security for complex systems includes block-chain technology. This technology is also enabling the emergence of crypto-currencies (e.g., Bitcoin and the TEU coin). These technological advances and disruptors will drive the need for a digital workforce having new certificates/credentials.

 

Unknowns:

Enormous capital investment will be required in some sectors, but the exact dollar value is unknown. The rate of adoption is the biggest unknown factor for these technological leaps. Regulatory issues, insurance needs and customer acceptance vis-à-vis safety concerns are additional unknowns.

Another unknown is the impact of 3-D printing technology on the shipping business. As fewer but more technically skilled employees are required, manufacturing centers could shift closer to the consumer thereby reducing the volume of shipping.

 

Implications for Maritime College:

Given that technology is advancing at an exponential rate and outstripping current workforce capability, we need to anticipate required changes in our curricula and develop new credentials/certifications that will be required by the industries we serve. This will necessitate: close partnerships with industry, faculty capable of integrating technology into the classroom, applied learning opportunities, or internships, that introduce students to the latest technology

Energy

Factors and Trends:

With the population growing by up to 20 percent, more energy will be consumed in 2025 as compared to today. Climate change concerns will drive a shift in the mix of energy sources. While fossil fuels will still be a significant part of the energy portfolio, the mix will alter, with natural gas and renewables contributing more. Significant advances and reduced costs will occur in renewable energy technology such as wind, solar photovoltaic (PV) and ocean current/tidal energy. By 2025 renewable energy could outstrip coal as the largest source of electricity. Cars will become increasingly electrified. Sources estimate that more than 80 million electric vehicles (EVs) will be in use by 2025. A greater use of liquid natural gas (LNG) for trucks, buses, rail, and ships is also predicted.

 

Effects:

Based on these energy trends and the previously discussed technology trends, we can anticipate improved energy performance of buildings. Some experts predict that within 10 years “energy producing buildings” will be the standard for new residential buildings. Based on the change in the mix of energy sources, a need will exist for a workforce with a different skill set to support the energy, facilities and transportation sectors.

 

Unknowns:

The rate of adoption of renewable energy in the U.S. markets is an unknown, even though the trend is clear. With a change in the mix of energy sources and new sources of oil, geo-political ramifications could exist for developing countries that rely upon oil production as the underpinning for their economies. This could lead to destabilization regionally and/or globally.

 

Implications for Maritime College:

With the growth of the renewable energy sector and LNG as fuel for propulsion as well as a cargo, the employees of the future, our students must understand the changing energy market. We will need to work with industry to change our curricula and develop new certifications and micro-credentials. We also have an opportunity for developing faculty scholarship, student internships and new industry partnerships.

Maritime Industry

Factors and Trends:

Maritime industry trends mirror those discussed in the technology and energy sections of this paper. These include shifts in international trade and transportation, fuel diversification, increased connectivity, smarter ships and terminals. As the average age of the population increases, so too will the age of the U.S. mariner and maritime workforce population.

Unique factors in the shipping business are the global surplus in hulls (i.e., excess tonnage); significant reduction in shipyard contracts for new vessels; and a significant reduction in employment opportunities in the offshore maritime industry. Even with recent increases in prices, the offshore industry is not expected to require the number of vessels that were in service prior to 2014. However, it is anticipated there will be an increase need for new types of vessels to support offshore renewable energy.

 

Effects:

We foresee a steady progression to autonomous (i.e., self-learning, integrated intelligent) systems for ships with the goal of autonomous ships in the future. This will mean a reduction in crew sizes. Concurrently, a more digital and tech savvy crew and maritime workforce will be required as shipboard jobs shift to shore. The nature of licenses is expected to change with perhaps with the growth of and demand for relevantly new licenses, such as the Electro Technical Officer credential (not yet issued for U.S. mariners) or new licenses for remote operation of ships and ports.

New technologies such as block chain could change other sectors of the maritime industry including brokering, chartering, protection and indemnity (P&I), ship registry and supply chain management. These changes will also require a workforce that can address cyber security challenges unique to the various maritime industry sectors.

As discussed in our scan of the energy factors and trends, climate change concerns will drive a change in the mix of energy sources. With an increase in offshore renewable energy (i.e., wind, current, tidal, etc.) in the next decade, a demand will arise for specialized ships to build and maintain offshore renewable energy plants, mariners to operate those ships, offshore energy technicians and offshore renewable energy plant operators.

Shipping will also become greener and more fuel-efficient. The growth in powered ships is expected to accelerate towards 2025. At present, about 75 LNG powered ships are in operation (excluding LNG carriers), and another 80 are under construction. Additionally, 40 ships have been designed to be ready for an LNG retrofit.

Recent developments in ship propulsion electrification, new battery storage technologies and hybrid-electric solutions on smaller vessels could be the harbinger for some degree of hybridization on larger vessels in the next decade. Sources estimate that by 2025 a majority of larger vessels could have some degree of hybridization.

 

Unknowns:

As with all technological changes, views vary on the rate of the adoption. Automated ships and ports require a huge capital investment. With the surplus of tonnage on the market today, this could slow new capital investment in more automated or autonomous ships. The same is true of ships with newer types of propulsion. International Standards of Training, Certification, and Watching-Keeping (STCW), and national laws and regulations which are based on those standards, will need to be changed to permit crew reduction sizes associated with more automated or autonomous operation.

While the near-shore coastal and river Jones Act maritime industry will have an increasing demand for U.S. licensed mariners, the demand for open ocean (i.e., unlimited tonnage/any horse power) mariners is an unknown factor, especially given the unknown rate of adoption of technology versus the known aging U.S. mariner population. Other factors that could impact the demand for mariners include any changes to existing laws (such as the Jones Act) that currently protect U.S. mariners or new legislation such as the Energizing American Maritime Act being introduced by Congressman John Garamendi. If passed, this bill would strengthen our domestic maritime industry by requiring up to 30 percent of exports of strategic energy assets to travel on U.S.-flagged vessels.

 

Implications for Maritime College:

The aforementioned changes have profound and far-reaching implications for Maritime College and its unique mission. “First and Foremost” is to produce graduates who are capable of entering the maritime workforce with the skills required by the industry when they graduate and being capable of adapting to changes in the workforce that will occur during their careers. Our graduates need to be life-long learners. We must have the flexibility and processes in place to change our curricula and develop new certifications and credentials based on anticipated changes to the industries we serve. This will require a closer relationship with industry in terms of curricula, internships and faculty-student research and scholarship.

Higher Education

Factors and Trends:

With an aging population, especially in western countries, an increase demand will exist for well-educated and trained maritime workforce professionals (i.e., license and non-license) in the U.S. and internationally. Employers are demanding employees with the requisite technical and soft skills (i.e., communications, problem solving, conflict management, team working, etc.). They are also seeking employees that enter the work force with experience. Recent studies have indicated that, in general, students graduating with internship experiences are more likely than students without those experiences to find employment upon graduation.

The demographics of the U.S. population are shifting. Based on a 2017 National Center for Education Statistics (NCES) report, New York will have a 5 percent higher number of high school graduates in 2025-2026 than in 2012-2013. However, all other states in the Northeast are expected to have a concurrent decrease in the number of high school graduates. These states will seek students from other regional states, including New York.

The cost of higher education will continue to increase while state support is expected to remain flat, thereby putting more burden upon students. Although recent enactment of the New York State Excelsior Scholarship program will provide more scholarships for middle-income families, the actual impact and sustainability of this program cannot yet be determined.

Advances in technology have resulted in an increase in the number of online courses and degree programs at both the graduate and undergraduate levels. More than 6 million students took at least one online course in 2015, representing more than a quarter (29.7 percent) of all higher education enrollments that year, according to a new report from Digital Learning Compass. In contrast, total online enrollments in 2002 came in just under 10 percent. It is expected that both domestic and international enrollment in online courses and degree programs will increase over the next decade.

 

Effects:

The aforementioned changes in demographics and improvements in online technology will increase the competition for qualified students. The competition among New York’s public four- and two-year colleges for both in and out-of-state high school graduates will be greater.

The increasing cost of graduate and undergraduate education will result in more of a financial burden on students and increased student loan debt. As a result, the federal government will impose greater accountability on colleges. Accrediting bodies will focus more on institutional effectiveness (i.e., retention rates, graduate rates and post-graduation employment) and the ability of institutions to assess their academic and non-academic programs based on student learning outcomes and the linkage of budgets to goals and assessment outcomes.

As previously discussed, in order to reduce costs and increase accessibility, online programs will continue to increase. With the need for life-long education as changes in technology continue to accelerate, industry will rely on post-secondary institutions to provide “just in time” or micro - certifications and credentials, which are shorter and less expensive than a traditional master’s degree and can be combined to earn that degree later on.

As the demand for internships rises, partnerships with industries we serve will become increasingly important in order to provide more networking opportunities that lead to relevant internships.

 

Unknowns:

Although unemployment has decreased recently to nearly record lows, the outlook for post- graduation employment during the period of this strategic plan is unsure due to political and geo-political uncertainties.

Other uncertain factors are federal and state fiscal support for higher education and the impact of the recently passed tax reform legislation as well as other pending legislation.

Even though we know an increased demand for online education and training will occur, international and domestic laws and regulations will need to acknowledge online training programs, if markets for online mariner education are to expand.

 

Implications for Maritime College:

Maritime College will need to conduct consistent and meaningful assessment of our academic programs to ensure quality. We must work with industry to anticipate changes that will require us to adjust our curricula and/or develop new micro-credentials and certifications. Recognizing that the maritime industry is global, we must develop online delivery platforms for our programs that can be accessed 24/7 by the international community. This will provide us with new markets for our programs and increased enrollment.

Maritime College Competition

Factors and Trends:

There are six state four-year maritime academies in the U.S. today. Although we currently compete for regional and out-of-state students, the majority of the students at these colleges come from in-state residents. Over the last two decades, the number of U.S. and international institutions with a maritime focus or programs has grown. More U.S. community colleges now offer maritime related associate degrees and/or limited tonnage merchant mariner credentials. On the international level, more countries recognizing the maritime industry as viable employment market for their citizens have started or have grown their maritime training and education programs. We have also seen the growth of reputable graduate programs (e.g. CASE, Lloyds, America Military University, CUNY Baruch, and University of South Carolina).

 

Effects:

With the change in demographics (discussed in the higher education section) and increasing number of maritime related programs in higher education, the competition for undergraduate and graduate students will increase. Students seeking to reduce costs and/or start relatively high-paying jobs in the maritime industry will find community college programs very attractive as a way to launch their career and/or finance their education. Among the SMAs, competition will increase in that the graduating high school population in California, Massachusetts and Maine will decrease by 2025.

 

Unknowns:

The biggest unknown (as discussed in the Maritime Industry section) is the employment market for both licensed mariners and non-licensed maritime industry professionals. Several opposing forces exist. Increased demand for licensed mariners could result from a combination of one or more factors such as increased retirements, new legislation that enhances the Jones Act, de-regulation that encourages an increase in the U.S. flag registry and the increase in offshore renewable energy sector. Conversely, a decrease for the demand of licensed mariners over the next decade could come from one or more of the following factors: lifting of the Jones Act restriction; increasing regulation and costs that result in further decline of the U.S. flag fleet; and a change in legislation and regulations; and technological advances and acceptance of increased automation and/or autonomous ships. This last factor could be countered balanced by the need for new credentials. This could result in increased U.S. flagging as costs decrease due to reduced crewing and fuel savings with new propulsion systems.

Another unknown is the level of federal support for the State Maritime Academies. Currently, the largest federal expenditure for State Maritime Academies is for the training vessels that the federal government is authorized by U.S. law to provide for cadets to earn the requisite sea time. The average age of the training ships is now over 40 years with the oldest ship being the TS EMPIRE STATE IV, which is 56 years old. Although bi-partisan support exists for construction of a new class of ship, Congress must authorize and appropriate funding at a time of increasing demand for limited discretionary funding. The SMAs are working with the U.S. Department of Transportation (DOT) Maritime Administration, members of Congress and private industry to obtain the necessary funding to replace these ships, which is crucial to ensuring sufficient licensed mariners for national defense sealift requirements and the U.S. economy.

 

Implications for Maritime College:

More than ever Maritime College needs to devote more effort to being “First and Foremost” in maritime education and training. We need to deliver high quality relevant academic programs through multiple modes (i.e., classroom and online) at the graduate and undergraduate levels. To do this we must strengthen our partnerships with industry and other educational institutions. We must seek new markets for students, recruit and retain quality faculty members who are accomplished in their disciplines. Faculty members connected with industry will ensure relevant programs and will infuse technology into our curricula.

For the training ship, if federal funding is not forthcoming, we will need to work with the federal government to find alternative financing methods to replace the training ships. This includes but is not limited to using existing programs to guarantee debt borrowed for new construction, public-private partnerships (P3’s) for new construction or conversion, charting ships, or a combination of these methods.

Summary

Several recurring themes are reflected in this environmental scan, including: 

  • Ensuring our programs are academically rigorous, high quality and relevant
  • Equipping our students for a highly competitive global workplace that will continue to experience rapid change, which includes technological and soft skills
  • Developing and strengthening our partnerships with the industries we serve
  • Developing new alternative revenue sources

Unforeseen factors can affect this environment scan. For example, at the time the College published its last environmental scan, oil prices were at an all-time high and the offshore drilling maritime sector was booming. Employment opportunities for our graduates in the offshore oil industry were plentiful. In 2014 decreasing prices resulted in massive layoffs and experienced licensed mariners competing for jobs with our recent graduates. At the same time, however, opportunities were available for both licensed and non-licensed graduate who were willing to relocate and consider other career paths such as sailing for foreign flags or working ashore. Therefore, we need to educate students on career opportunities throughout the maritime sector and other industries where their experiential learning will benefit them.

Resources

The resources used for our environmental scan included but
were not limited to:

  • AKA interviews with industry leaders and alumni
  • DNV-GL Technology Outlook 2025
  • CMA Shipping Conference Papers
  • BIMCO Reflections 2017
  • U.S. Department of Labor Bureau of Labor Statistics
  • Deloitte Global Economic Outlook: Shipping Sailing into Troubled Waters
  • Coast Guard Proceedings Jan-Apr 2017: The 21st Century
  • Maritime Workforce
  • Bureau of Labor and Statistics Occupational Outlooks
  • TradeWinds TW+ Autumn 2017: Freight thinking
  • Thank You for Being Late, Thomas Friedman
  • There is Life After College, Jeffrey J. Selingo
  • Inside Higher Education
  • Chronicle of Higher Education
  • National Center for Education Statistics