the National interest in rehabilitating domestic 
fisheries. Finally, there are U.S. Continental Shelf 
industries, such as hard mineral mining, that are 
still in their infancy but whose economic potential 
and importance to the Nation justifies removal of 
legal and regulatory obstacles and creation of 
special indirect incentives to attract initial explora- 
tion. 
Il. VALUE OF OCEAN ACTIVITY 
Many public and private studies have been 
made to assess the overall scale of ocean business, 
using a variety of techniques to describe the size of 
the investment and the market. A survey of these 
studies revealed that no estimate is satisfactory for 
all purposes. Many are defective because of redun- 
dancies, oversights, and inaccuracies of component 
figures; inconsistencies in methods of compilation; 
and disagreement of essential definitions. Further, 
results have sometimes been oriented to such 
conflicting objectives as showing the magnitude of 
market opportunity, supporting advertising ex- 
penditure, or showing the need for greater private 
investment or further Government expenditures. 
While estimates have been as high as $50 
billion, the panel believes that the true value of 
ocean activity in terms of contribution to Gross 
National Product is between $15 and $25 billion. 
This includes recovery and processing of all natural 
resources, the sea transportation industry, the 
marine recreation industry, Government expendi- 
tures, and net export of marine goods and services. 
The panel commends the National Council on 
Marine Resources and Engineering Development 
for the progress in quantitatively describing many 
areas of ocean activity. An urgent need exists, 
however, for more comprehensive statistics that 
will further identify the areas of redundancy, 
improve comparability, and take into account the 
Statistics reflecting such factors as investment, 
sales, and contribution to GNP. The Government, 
working with industry, should develop a method 
to compile the data necessary to the periodic 
publication of the required statistics. 
Hl. INDUSTRY ATTITUDES TOWARD OCEAN 
INVESTMENTS 
Because the United States has a free enterprise 
system, capital and effort are directed toward 
ventures offering the likelihood of the greatest 
returns On investment, whether they be on shore 
or at sea, at home or abroad. However, industry’s 
evaluation of the prospects of profit in the oceans 
is influenced substantially by regulatory restraints, 
legal uncertainties, and the possibility that the 
Government will sponsor a major ocean program. 
On the other hand, the element of excitement in 
participating in a new industry may stimulate 
investment interest beyond the prospect of im- 
mediate return. 
Both the intensity of interest and related 
hazards of investment in this field are evidenced 
by the number of acquisitions and mergers occur- 
ring now in ocean-oriented industries. Small com- 
panies in the field with limited capital and a 
restricted product line or service frequently find it 
advantageous to merge with larger firms. In some 
instances they are forced to terminate operations, 
a pattern typical of young industries. 
The offshore petroleum service industry is an 
excellent example of the diversification trend. In 
particular, the offshore drilling companies, origi- 
nally characterized by wide-ranging cycles of 
business activity, are now large, established firms. 
They have stabilized successfully their level of 
business by diversifying into such areas as ocean 
engineering, exploration, diving, mining, construc- 
tion, pipelaying, and even fish processing. As a 
result, the Nation’s largest drilling companies have 
more than quadrupled their gross revenues during 
the last five years. 
Ocean industry, in general, is not looking for 
subsidization, which in this report is defined as 
direct financial aid. Instead, industry is seeking 
various indirect means to minimize risk. Such 
means usually are peculiar to certain phases of 
each industry, and include definition of jurisdic- 
tional boundaries, environmental prediction, fiscal 
incentives such as accelerated depreciation, ocean 
surveys, and such Government contracting policies 
as cost plus fixed fee. 
For example, the mining industry has identified 
the need for reconnaissance surveys to guide 
further delineation of deposits; a petroleum oper- 
ator would like longer-range scheduling of offshore 
lease sales; and a fisherman would sometimes 
desire the opportunity to use foreign-built vessels. 
The fewer the uncertainties and the less restrictive 
the regulation, the sooner capital and technology 
will be available for new ocean opportunities. 
