America's Ocean-Powered Economy

Seven ways to think about money and the sea
Sean Gardner/Reuters

The area of the sea within an invisible border 200 miles out from every U.S. shore isn't called the "exclusive economic zone" for nothing: Countries have property rights at sea just as they do on land. The fact that every nation with a coast also has an EEZ—which extends far beyond a country's "territorial" waters—reflects the importance of the ocean as a source of wealth. But when it comes to analyzing our economy, we hardly ever single out the activity in the EEZ as a special slice of national employment or productivity. 

The National Ocean Economics Program, which started at MIT and is now based at the Monterey Institute of International Studies, is home to a group of academics who would like to change that. NOEP has been tracking economic activity in U.S. coastal zones (both on and offshore) since 1999. It released the first comprehensive report on the American maritime economy in 2009, covering time-series data through 2005. This month NOEP published a new analysis of the ocean economy with data from 2007-2012.

Among the findings from this report: The number of Americans going on cruises has grown by more than a third since 2000; Louisiana residents say they are willing to pay thousands of dollars to restore their disappearing wetlands; and seafood harvesting accounts for fewer jobs and less money in this country than ever before. 

Unlike what NOEP calls "the coastal economy," which is defined solely by geography (and is also pretty much a reflection of the national economy as a whole), the ocean economy represents a range of goods produced and services performed all over the country. It includes 21 industries in six sectors.

Certain industries, like commercial fishing, obviously depend on the sea and are wholly included. But only portions of other industries qualify; the tourism & recreation sector, especially, is full of these cases: There are many luxury hotels in America, for example, but only the ones in shore-adjacent zip codes can be said to depend on the sea. 

Here, below, are 7 more big-picture things to know about the ocean's ties to American jobs, money, and well-being. Most of the values are reported in 2005 dollars. 

1. In 2010, the ocean economy employed about 2.8 million people and produced $258 billion worth of goods and services. But, according to NOEP, an additional 2.6 million jobs and $375 billion were indirectly associated with or induced by ocean industries. Taking this multiplier effect into account, NOEP says that the ocean economy contributes roughly 4.4 percent of total U.S. GDP. That's not huge, but it is more than America's creative industries (recently estimated to contribute 3.2 percent of U.S. GDP) or agriculture.  

2. Its two pillars are the mineral extraction and tourism & recreation sectors. It's not really surprising that these are the two most productive sectors of the ocean economy. The minerals sector includes offshore drilling and exploration of oil and natural gas—a business that, catastrophic explosions and spills notwithstanding, is booming. And there remains a solid American tradition of flocking to the seashore for vacations. But these two sectors dominate the ocean economy in different ways. Nearly three out of every four ocean economy jobs are in tourism & recreation, but 65 percent of the ocean economy's GDP comes from other sectors. The workers in the minerals sector, who account for only 5 percent of ocean-related employment, contribute over six times that to the total ocean-related GDP.


In 2011, reports NOAA, the minerals sector actually surpassed tourism & recreation on the GDP measure—accounting for 37 percent of the ocean economy's productivity. 

Tourism & recreation is a service-oriented sector; the minerals sector is about producing high-value goods. The workers' wages reflect this. 

3. But a third sector is growing rapidly: marine transportation. This includes the deep sea freight, warehousing, navigational equipment, marine transportation services, and marine passenger industries. The production of search and navigation equipment contributes more to GDP than the other four industries in this sector. The freight industry is becoming more productive with fewer workers (and a case in point here is the coming fleet of drone ships, as The Atlantic's Megan Garber recently reported): the total value of freight coming through U.S. ports nearly doubled between 2002 and 2012, while employment of people moving that freight dropped by 2.5 percent.

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