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Fished Out

A look at how technology may be wiping the fishing industry. Could it happen to your industry?
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New England fishermen thought technology was their savior. It may be wiping them out. Could it happen to your industry?

Glenn McIntire sits with his feet up on his desk, barking into his cell phone. Without interrupting his monologue, he swivels his chair to take a quick look at his computer monitor -- okay, nothing's changed -- and swivels back toward the window to regain his ocean view. Suddenly he frowns. "Hold on, I've got a beep," he says into the phone, hitting the flash key and greeting what turns out to be his significant other.

McIntire's office, which contains about $50,000 worth of state-of-the-art technology, is unusual in several ways. For one thing, there's a buzzer directly over his head that goes off every 15 minutes. If he doesn't reach up and turn it off, it grows so piercing in volume that you half expect God himself to reach down from the sky to extinguish the sound. That buzzer is in place to make sure that McIntire is awake, and that he's not having a heart attack, a stroke, or any other physical catastrophe that might hinder his ability to steer his office through the pitch-black night. For McIntire's office sits high up on an 80-foot boat called the Intrepid, which is now well out to sea. By glancing at the Compaq computer bolted to the desk, McIntire can watch his boat's satellite-monitored progress, represented on-screen by a little boat icon crawling its way across a digitized map of the waters south of Cape Elizabeth, Maine.

Technology has been an indispensable boon to small fishing operations, which increasingly rely on sophisticated equipment to make up for smaller boats and crews. Electronic fish-finding equipment, global-positioning systems, and satellite communications gear have been turning what used to be a hit-or-miss art into an efficient, predictable business, able to withstand the once-crushing threats of bigger boats and bad weather.

But here's the catch: the technology that allows those independents to compete is slowly killing the industry. The problem is that fish are a limited resource, and fishing boats -- thanks largely to technology -- have gotten too good at their job. Now, as fish become more and more scarce, fishermen have little choice but to enlist even more technology to find them, further exacerbating the problem. As a result, many fishing operations have found they've reached a point of diminishing returns on technology: they have to spend a great deal more to achieve even incremental improvements in their catch, squeezing profits. "We've been able to search out the last fish," says Vito J. Calomo, executive director of the Fisheries Commission, in Gloucester, Mass. "We have too much technology."

Economists refer to this sort of conundrum -- in which what's good for the individual ends up being bad for the group -- as a "tragedy of the commons," named for the historical overuse of common grazing grounds in English villages. On a global scale, of course, there have long been claims that the environment is suffering at the hands of consumers and businesses that put their own convenience and gain over the common good. Nor is overfishing unique to New England. Last year the United Nations estimated that 13 of 17 major ocean fisheries were dangerously close to perishing, mostly due to overfishing.

But there are reasons to regard the case of the New England fishing industry in particular as a cautionary tale. For one thing, it is one of the first times that information and communications technologies have been prime tools in the depletion of a resource. For another, smaller businesses, rather than large ones, are the main players. As growing businesses in all industries become more and more adept at taking advantage of increasingly sophis-ticated technology, hence becoming intensely efficient, it's likely that more industries will simply run out of key resources (see Vicious Circles, below). Companies hoping to avoid that fate might want to consider how the fishing industry has come to find itself in this bind.

* * *

In the late 1960s the U.S. fishing industry found itself being pummeled at sea by foreign fleets of huge technologically sophisticated boats. Among the foreign vessels, many of which were from the Soviet Union, were 300-foot-long steel boats equipped with everything from sonar to refrigeration units and able to stay at sea for months at a time. Those floating factories could catch hundreds of thousands more fish than their smaller, old-fashioned U.S. counterparts. Given a limited supply of fish, the lightweight, low-tech U.S. fleet didn't stand a chance. In Maine, for example, the total catch fell from 219 million pounds of fish in 1968 to 138 million pounds in 1975. Enraged at the foreign menace, U.S. fishermen showered the national government with protests, demanding that it intervene to protect its own. Congress responded in 1976 with the Magnuson Fishery Management and Conservation Act.

The act declared a 200-mile zone off the U.S. coastline off-limits to non-U.S. fleets, to protect the fish supply and give the U.S. fleets a chance to fish without foreign competition. In addition the government helped make low-interest loans available to fishermen who wanted to upgrade their boats. Meanwhile the late 1970s saw the market flooded with cheap ex-military technology that could be applied to the hunt for fish. LORAN, for example, originally developed to give the Defense Department a long-range, highly accurate radio navigation system, allowed even unskilled fishermen to find fertile waters. Fishermen could mark, say, the location of a sunken ship -- a favorite hiding place of fish -- and return over and over. Echo sounders, evolved from versions that found enemy submarines, worked fine in inexpensive models aimed at finding schools of fish, as well as depth-finding and even mapping ocean floors.

The technology feeding frenzy wasn't limited to the same old crowd of fishermen. Under the government's Fisheries Obligation Guarantee Program, anyone who wanted to build a boat could get a loan for up to 80% of the cost and then enjoy a nice write-off at tax time. Former weekend captains in DockSides and Izod shirts started up fishing businesses. What they lacked in old-fashioned grit and sea smarts they made up for with cutting-edge technology, intensifying competition for all fishermen. Old-timers, never ones to be outdone on their own turf, used the low-interest loans to upgrade their rickety wooden vessels with new gadgets or to build new, better-equipped boats.

The result of this triple bonanza -- no foreign boats, cheap technology, and low-interest loans -- was that the fish haul surged. By 1977 the Maine catch alone had rebounded to 182 million pounds; in 1980 the New England fleet landed more than 117 million pounds of cod, the largest catch since 1945. Small fishing operations continued to upgrade their technology and became better at taking advantage of it.

So when catches started to drop again in the early 1980s, the obvious response was to apply technology even more aggressively in an attempt to maintain catch size in the face of a dwindling population of fish. "Essentially what we did was replace the foreign fleet with a more powerful American fleet," says Anthony D. DiLernia, a professor of marine education at Kingsboro Community College, part of the City University of New York. "Unfortunately, you cannot have the same number of boats, fishing with ever-increasing technology, and still maintain the ecosystem."

* * *

Even on a gray, drizzly day, Portland, Maine, feels crisp. The center of town, perched on a hill overlooking the Atlantic, is filled with freshly painted stores and restaurants. And the town's coffee shops -- serving everything from cafÈ latte to a good game of chess -- rival even the hippest Seattle cafÈs. On this particular day the Portland denizens slowly go about their business -- no need to hurry on a day as dreary as this -- and many simply stay inside the shops and play cards, steam from their coffee curling up around the cards in their hands.

Down the hill, on the waterfront -- an industrial contrast to the quaint town center -- a steady flow of men and women dressed in flannels, Irish-knit sweaters, and rubber boots heads toward a stark single-story structure. They drink their coffee hurriedly out of paper cups as they file into the Portland Fish Exchange for the 12 o'clock auction. Here, in the chilly, fishy dampness, they quickly look over the day's catch. Then they shuffle into the auction room and take seats in tiny chairs donated by a local elementary school as the auctioneer starts the bidding on 85 pounds of large gray sole unloaded from a vessel named the Jamie Leigh.

A decade ago the exchange was bustling with buyers clamoring over what seemed like limitless catches. But today the display room looks sparse. "There's not a lot of fish in today," mutters one fishermen's representative, pacing up and down the aisles of wooden crates slick with the previous night's catch. The increasingly meager hauls have the exchange's board of directors fearing for the exchange's survival. The exchange has added shrimp to its docket, but it's not enough to make up for the fish shortfall.

The catch has been dropping steadily since the early '80s. Last year only 27 million pounds of fish were sold, down 4 million pounds from 1993. Between 1990 and 1992, groundfish stocks -- the traditional New England catch -- fell 30%. In 1994 alone, groundfish landings in the Gulf of Maine dropped 25% from the previous year. Georges Bank, long renowned as an apparently endlessly fertile fishing ground, has been all but closed down by the government in an effort to give fish there a chance to renew their populations. For halibut and haddock, two staple fish for New England fishermen, it may already be too late; for commercial purposes, those species are extinct in the bank. The government has placed geographic and time limits on fishing to keep other areas from suffering Georges Bank's fate.

Carl Safina, director of the Living Oceans Program of the National Audubon Society, says he's not surprised by the straits in which the New England commercial fishing industry finds itself. He claims that the breathtaking government-subsidized expansion of the U.S. fleet after the Magnuson act sealed the fate not only of the fish populations but of most of the fishermen who thought they were investing in their futures. "It was an utter catastrophe," he says.

* * *

Gail and Charlie Johnson have been in the fishing business for about 20 years. Charlie is the captain, and Gail is the onshore business manager. Gail remembers a time when communicating with Charlie was usually impossible when he was out to sea. If anything broke -- "with Charlie, something is always breaking," sighs Gail -- Charlie had to get the 72-foot trawler back within 50 miles of Portland to have a chance of raising her on the radio. Often he had to limp all the way back to dock and call Gail from a dockside phone. Gail would then call the supplier and order the necessary part. Charlie would sit and wait for days -- 14 days in the case of a French-made generator -- cursing each hour of lost time as other boats pulled in with their catch. Gail figures each landlocked day cost them from $3,000 to $5,000.

Then the Johnsons installed a single-sideband radio, with a range of about 5,000 miles. That enabled Charlie to contact Gail while still far out to sea, so that she could have the part waiting for him wherever he docked. After a quick pit stop, Charlie could resume his hunt. Later, with a satellite communications system, Charlie didn't even have to count on Gail's manning the radio to reach her; he could leave a message by E-mail or fax. The system also provides up-to-the-minute weather reports and water temperatures, which are critical for determining the best fishing spots and times.

The Johnsons have been believers in technology since 1980, when Gail, bent on running an efficient operation, bought a Radio Shack personal computer. She was determined to keep track of financial information herself, rather than depend on an accountant, as did the other fishermen's wives in South Harpswell, the small fishing community 30 miles northeast of Portland, where Charlie learned to fish for a living at the age of 13 and where they still live. "It took me two years to learn how to use the bloomin' thing," she says.

At Charlie's urging they continued to invest throughout the 1980s in communications systems and better fish-finding and navigation equipment. Most of the purchases seemed to pay off in bigger catches. But a few years ago, when corporate net profits fell suddenly from about $20,000 a year to near zero, Gail called a moratorium on technology purchases. "He'd tell me the fish-finding equipment was important," says Gail, "but I'd look at the numbers, and I just didn't see the payoff." Last April, convinced that they could no longer make money fishing in New England, Charlie sailed their boat to South America, where the government hasn't yet taken action over diminished fish populations; Gail continues to run her end of the business from South Harpswell.

* * *

Return on investment isn't the issue when it comes to technology in the fishing business, says Jerry Knecht. It's survival. "I saw many operations fail because they ignored technology," says Knecht, the owner of two commercial fishing boats in Portland, one of which is captained by Glenn McIntire, the cell-phone talker. Knecht credits his technology investments with keeping him afloat -- and expanding his business horizontally into commodities and trading.

Knecht, who thinks more like a businessman than a fisherman -- in contrast to McIntire, a seaman who would probably fish even if he couldn't make a profit at it -- is known around Portland as someone who understands the state of the art. "Locating fish today is virtually 100% accurate," he says smugly. The old sonar gear would buck and wince at the slightest change in temperature, he explains. And even when it was working, the captain was forced to decipher a squiggly line that looked like the output of a lie-detector test if he wanted to get an idea of the bottom composition or the size of a school of fish. Now when he's aboard his second boat, the Alexander W, even Knecht can interpret the signals, some of which are beamed up from sensors located on the nets themselves and then displayed in full color on a video screen. The images indicate the location, size, and type of fish below. It used to take two weeks to locate a school of herring, haul it in, and transfer it to a Russian refrigerator ship. Now it takes four hours.

McIntire, 43, who began fishing when he was 18 -- he started off working for Charlie Johnson -- is thankful for Knecht's commitment to technology. "To compete you have to have this stuff," he says -- especially now, he adds, with the overfishing crisis having led to ever-tightening government restrictions. McIntire likes to use a software program hooked up to a global-positioning system and LORAN C so that he can keep track of where he's made a good tow. He can then trace his path back to the same spot. And using MapTech Professional (Resolution Mapping, 617-860-0430), he can keep track of shipwrecks and other hazards -- there's no time to stop fishing to fix a torn net, especially when you're on a government-mandated time clock. The National Marine Fisheries Service keeps track of every hour the boat is at sea and counts it as fishing time, whether or not the nets are in the water.

Of course McIntire is aware of the irony of having to use more technology to make up for the effect of government restrictions that have been put in place to protect the future of the industry. "It's a double-edged thing," he says. "We have all this technology, and now we've reached a point where we may have outsmarted the fish. But we're being limited, so we have to use the technology even harder."

Most experts agree that the strict limits on commercial fishing in New England are only part of a long-overdue effort to fix what emerged as an unsustainable equation once high-tech fishing became the rule. As Fisheries Commission Director Calomo puts it: "Man-with-technology versus fish is a whole other thing than man versus fish."

Fishermen admit that the industry must make concessions. But they claim the restrictions have already gone too far. "The government is running us out of business," says McIntire, echoing the anger of thousands of fishermen. As an alternative to more crackdowns, the Clinton administration has already spent $2 million -- and will spend another $25 million this year -- simply buying out struggling groundfish operations. In many cases fishermen take the acquired boats -- often the very "superboats" they built in the '80s with government-subsidized loans -- and simply sink them, letting them serve as artificial reefs that support budding fish populations. It's an expensive way to make up for the excesses of technology, but in a situation that doesn't lend itself to easy solutions, it has a certain elegance.

* * *

Sarah Schafer (sarah.schafer@inc.com) is a reporter at Inc. Technology.


VICIOUS CIRCLES

Commercial fisheries are not the only example of a modern-day tragedy of the commons. Any industry that relies on a shared pool of resources risks a similar fate. Here are two on the front lines:


Oil:
No one owns oil until it's extracted from the ground, which throws the oil companies into a frenzy as they race to lease oil-rich land and drill down to the spoils. "It's like kids sticking straws in a milk shake, each trying to suck up more," says Gary Libecap, professor of economics and law at the University of Arizona. The rapid extraction destroys natural pressures in the ground, leaving much of the oil trapped. Extraction costs increase, hiking up the cost of oil and forcing the United States to rely on other countries' supplies.


Internet Bandwidth:
Today, as millions rush onto the Net, setting up Web sites spiked with video and audio clips, no one is giving much thought to the issue of bandwidth, the information-carrying capacity of the network. One day the pipeline could become so clogged that traffic will slow to first a crawl and then a virtual standstill.

Last updated: Sep 15, 1996




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