Innovation to FinTech Company

Innovation to FinTech Company

 

Table of Content

Sr.

Title

Page No.

Executive Summary

Introduction 

Background 

Evaluation 

Results & Discussion

Conclusion 

References 

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Innovation to FinTech research analysis

 

Executive Summary

Not only in rich economies, but also in emerging nations, there is increased competition between banks and fintech firms. However, it has yet to be noticed to the same degree in Latvia. The goal of this study is to compare Latvia's fintech development to that of Europe. The study examines the advantages and disadvantages of fintech services versus traditional financial sector services (banks, insurance companies, asset management and investment institutions, and so on), as well as consumer readiness to use fintech services. This study presents the findings of a survey aimed at determining how well-informed Latvian customers are about fintech services, their convenience, speed, and security, as well as how well-informed consumers are about other financial services. This study's hypothesis is that Latvian society is not yet ready to adopt fintech services, preferring instead banking services. The survey results suggest that respondents are typically uninformed of fintech services in Latvia, as well as the innovations and new financial products that go along with them. This study offers a number of recommendations to fintech entrepreneurs, start-up associations, risk capital funds, and government agencies.

 

Innovation to FinTech research analysis

Introduction

Fintech is the use of new technological breakthroughs to financial products and services. Our expert will explain what it is and how to utilize it. Fintech is a combination of the words "finance" and "technology" that refers to any company that employs technology to improve or automate financial services and operations. The phrase refers to a fast-expanding industry that helps consumers and businesses in a variety of ways. Fintech offers a seemingly limitless number of uses, from mobile banking and insurance to cryptocurrency and investment apps. The industry is enormous, and it will continue to grow in the next years. "41 VC-backed fintech unicorns worth a combined $154.1 billion," according to CB Insights. Many traditional banks are proponents and users of the technology, aggressively investing in, acquiring, or collaborating with fintech companies because it is easier to provide digitally savvy clients with what they want while also propelling the industry forward and being relevant. Fintech firms use technology to improve the security, speed, and efficiency of traditional financial services. Fintech is one of the fastest-growing tech areas, with companies developing solutions in practically every aspect of finance, from payments and loans to credit scoring and stock trading.[1],[2],[3]

1.1 What is the mechanism behind fintech?

Fintech is not a new industry; it has simply evolved at a breakneck pace. Credit cards, ATMs, electronic trading floors, personal finance apps, and high-frequency trading have all been a part of the financial sector in some manner since the 1950s. Financial technology's inner workings differ from project to project and application to application. Machine learning algorithms, blockchain, and data science are being used to accomplish everything from process credit risks to run hedge funds in some of the most recent breakthroughs. In reality, a type of regulatory technology known as regtech has emerged to help businesses like fintech negotiate the complicated world of compliance and regulatory challenges. Concerns about cybersecurity in the fintech business have developed as the industry has evolved. The global expansion of fintech companies and markets has exposed vulnerabilities in fintech infrastructure, making it a target for cybercriminals. Fortunately, technology is always improving, allowing fraud risks to be reduced and new dangers to be mitigated. Traditional firms and banks are continuously adopting fintech services for their own objectives, despite the industry conjuring up ideas of startups and industry-changing technologies. Here's a quick look at how the financial services business is both disrupting and improving some aspects of the industry.[4]

1.1.1 Banking

The fintech industry is dominated by mobile banking. Consumers have sought simple digital access to their bank accounts, particularly on mobile devices, in the field of personal finance. With the rise of digital-first banks, or Neo banks, almost all large banks now have some sort of mobile banking capability. Neo banks are virtual banks that offer checking, savings, payment, and lending services to customers through a mobile and digital infrastructure. Chime, Simple, and Varo are three Neo banks to consider.[5]

1.1.2 Crypto Currency & Blockchain

The emergence of cryptocurrencies and blockchain is running parallel to fintech. Blockchain is the technology that enables bitcoin mining and marketplaces, and both blockchain and fintech are responsible for improvements in cryptocurrency technology. Though blockchain and cryptocurrency are distinct technologies that might be considered outside of the world of fintech, both are theoretically required to develop practical applications that advance fintech. Gemini, Spring Labs, and Circle are some of the most essential blockchain companies to know, while Coinbase and SALT are examples of cryptocurrency companies.[6]

1.1.3 Investment & Savings

In recent years, the number of investing and savings apps has exploded as a result of fintech. Companies such as Robinhood, Stash, and Acorns are removing more hurdles to investing than ever before. While the approaches of these applications vary, they all use a combination of savings and automated small-dollar investing ways to expose people to the markets, such as fast round-up contributions on purchases.[7]

1.1.4 Machine Learning & Trading

The Holy Grail of finance is being able to forecast market direction. Machine learning has become increasingly crucial in fintech, with billions of dollars to be made. The strength of this AI subset rests in its capacity to process huge volumes of data using algorithms designed to recognize trends and dangers, giving consumers, businesses, banks, and other organizations a better knowledge of investment and purchasing risks earlier in the process.[8]

1.1.5 Payments

Fintech is particularly adept at moving money around. "I'll Venmo you," rather than "I'll pay you later," is now a common phrase. Venmo is a popular mobile payment service. Payment processors have revolutionized the way we do business. Sending money digitally over the world is now easier than ever. Zelle, Paypal, Stripe, and Square, in addition to Venmo, are popular payment businesses.[9]

1.1.6 Lending

Fintech is also revolutionizing credit by reducing risk assessment, accelerating approval processes, and simplifying access. Millions of individuals around the world can now apply for a loan using their mobile devices, and new data points and risk modelling skills are allowing credit to be extended to previously underserved groups. Furthermore, individuals can request credit reports numerous times a year without affecting their credit score, making the entire financing environment more open for all. Tala, Petal, and Credit Karma are notable credit firms.[10]

1.1.7 Insurance

While insurtech is rapidly becoming into its own business, it remains part of the fintech umbrella. Insurance is a late adopter of technology, therefore many fintech businesses are teaming up with traditional insurers to assist automate operations and broaden coverage. The insurance business is seeing a lot of innovation, from mobile vehicle insurance to health insurance wearables. Oscar Health, Root Insurance, and Policy Genius are a few insurtech startups to keep an eye on.[11]

 

Background

Fintech, or financial technology, is a phrase that describes companies that provide current financial technology. Since 2010, such businesses have become popular. Fintech companies are typically micro, small, or medium-sized businesses with a clear vision for introducing new or improving existing financial services. Fintech start-ups are common, and the number of them is growing all the time. Fintech startups are typically financed through venture capital and crowdfunding. Fintech startups, according to some experts, boost the financial system's efficiency (Vlasov, 2017; Vovchenko et al., 2017; Setyawati et al., 2017). Fintech companies have grown in popularity for two reasons. First, the global financial crisis of 2008 exposed the flaws in the old banking system that contributed to the disaster. Second, new technologies have enabled to deliver financial services with greater mobility, simplicity of use (visualisation of data), speed, and lower cost (Anikina et al., 2016).[07], [10]

The potential market for fintech service users is enormous, encompassing virtually the whole adult population of the world. According to the McKinsey Social Sector page (Chaia et al., 2010), a study conducted in 2010, nearly 2.2 billion financially unserved adults live in Africa, Asia, Latin America, and the Middle East, including 8% of the population of high-income OECD countries (60 million adults), 65 percent of the population of Latin America (250 million adults), 49 percent of the population of Central Asia and Eastern Europe (193 million adults), and 67 percent of the population in the Middle East. These are folks who could benefit from fintech services. The growing number of people throughout the world who are unable or unable to use traditional banking services adds to the development of FinTech, which provides similar services while being faster, cheaper, and more profitable than banks. These changes will increase operational and long-term risks for banks (Novokreshchenova et al.,2016; Fetai, 2105; Thalassinos et al., 2015). Sharf (2016), on the other hand, reports that a survey of 10,131 people in Australia, Canada, Hong Kong, Singapore, the United Kingdom, and the United States about their use of fintech products revealed that only 15.5 percent of all respondents used nonbanking services, with the number expected to rapidly rise in the future. Non-banking services are used often by 25% of respondents, who utilize 2-3 non-banking goods on a regular basis. These figures suggest that bank customers are also potential fintech customers.[12]

Evaluation

Fintech is one of the fastest expanding sectors of the economy, according to research by Accenture (a worldwide management consulting, technology services, and outsourcing firm). Investments in the business have rapidly expanded, reaching $12 billion in 2014 from $930 million in 2008. Europe saw the most significant growth (Accenture, 2015). For the years 2014 to 2016, the table presents data on fintech investment in the United States, Europe, and Asia.

Region

2014

2015

2016

USA

14.1

27.4

13.5

Europe

12.0

10.9

2.2

Asia

3.3

8.4

8.6

Table shows that in 2015, these regions received $46.7 billion in fintech investment. It dropped to $24.3 billion in 2016, although this does not indicate a drop in interest in this subject in general. Despite the increase in total investment in fintech, these companies are still unable to compete seriously with the banking and insurance sectors of financial services - according to a survey of young entrepreneurs, users of banking services in Latvia (2016-2017), the majority of clients are not ready to replace them with fintech alternatives (Kims, 2017).[13][14]

As we all know, technology, or more specifically, information technology, is the main driving force of business in a variety of industries. Mobile payments, data analysis, crowd-sourced platforms, and cryptocurrency are all supported by technology. Fintech is an industry that improves the efficiency of the financial system by using IT technology centered on cellular phones/smartphones. According to Gomber et al., conventional business drivers of the financial services industry are being combined with Internet-related technology. FinTech refers to a set of technologies that have grown more important in the management of financial transactions.

Fintech ecosystem organizations will become strong business drivers. Organizations active in the Fintech industry, according to Alt et al., include:

External Organizations (e.g., Financial Services Authority, Government Organization) are organizations that function as regulators.

Startups, Fintech Companies, IT Companies, and Telecommunication Companies are examples of network organizations, which are directly involved in the Fintech business network.

A corporation or organisation that uses Fintech services in its business dealings is referred to as an Internal Organization.

Financial Institutions, Regulators, IT Companies, Startups, Accelerators, Consulting Companies, Governmental Organizations, Retailers, and Telecommunication Companies are the organizations referred to as business drivers in Fintech in the study of Zavolokina, et al. FinTech service businesses are IT-enabled sources of information, service firms, or financial platforms. FinTech firms are now referred to either freshly founded FinTech companies or established IT companies that enter the financial industry domain. Individuals spend money to receive goods or services created by the firm, while companies pay wages in exchange for their labor or services. Money flow is also a key corporate factor. Money flow is the amount of money thrown into financial industry sectors to promote their development. Payments (payments), insurance (Digital Insurance), planning (Financial Planning), deposit & lending (Peer to Peer Lending), Crowdfunding, Blockchain, Capital Raising and Investment Management, Data and Analytic, and Security are the eight categories that FinTech services based on money flow are divided into. Technology has created new business models in E-Commerce, such as online money flow.

Fintech mechanisms include the creation of new services/products/business processes, as well as the improvement of existing services/products/processes to improve consumer value or make them more transparent, accessible, and cost-effective. The utilization of technology breakthroughs supports these operations, as evidenced by the element of "application of IT to finance." FinTech's disruptive function is defined as the development of alternatives to traditional banking services, such as the replacement of the bank as an intermediary. Finally, FinTech fosters rivalry not only among service entrepreneurs, but also among banks.

In the financial services industry, technological innovation is a business innovation that relies on IT. Business requires a lot of creativity. The word innovation, according to C. Lin, comes from the Latin word innovate, which means "to create something new." Innovation is a crucial source of competitive advantage that can be sustained. Fintech companies provide financial services through cutting-edge technology. "Use of new technological and administrative expertise to offer a new product or service to customers," according to Fadilah et al. In such a competitive environment as the contemporary economic, social, and political globe, technical innovation is a critical factor in the creation of new kinds of value. New company models have been impacted by technological innovation and digitization.

3.1 Theoretical Framework

This study creates a theoretical basis for financial technology. FinTech is a new paradigm for business and technology innovation in the financial industry. This conceptual framework will serve as a practical guidance in field practice as well as a theoretical foundation for future research. In addition, the conceptual framework in this study is built on the description of Grand Theory, Middle Theory, and Applied Theory to generate constructs and dimensions. Many people nowadays believe that Modern Monetary Theory underpins the FinTech dilemma. Griffin claims that Modern Monetary Theory teaches things like Electronic Money and Monetary Policy, as well as the money supply and money flow speed. Another part of his idea concerned the economic impact of electronic money movements. The middle theory evolved from the next Grand theory. The Resource-Based View (RBV) Theory is the first middle theory to be employed. The essence of Resource-Based View (RBV) theory, according to Wernerfelt, is that organizations can obtain and maintain competitive advantages by building and exploiting important resources and skills.

Technology and resources are physical assets, according to Melville et al., and ability in managing organizations is an intangible asset, according to Barney. Roger's Diffusion of Innovations Theory is a component of Management and Technology Theory. The diffusion of innovation theory describes how to develop, modify, and improve technological uptake. Furthermore, firms that apply IT to finance create financial technology competition (FinTech). The organization's ability to accept an innovation quickly is critical. Competitive theory aids in the description of market development, new products/services, and new business models.

Business Drivers is the first construct created by combining numerous theories. Technology, organisation, and money flows are all important business drivers in the banking industry. Fintech is a type of financial service innovation that has recently gained popularity as a means of facilitating business, particularly in the financial services industry. The second construct is made up of dimensions like develop/change/improve, disrupt, apply IT to finance, and create competition. Finally, due to the existence of a Technological Innovation construct with a market development dimension as a result of a new product or service as a result of new processes and business models.

Results & Discussion

A poll of Indonesians was undertaken for this study to learn about their attitudes toward Fintech. There are 154 people who responded, with students accounting for 46.1 percent, freelancers for 5.3 percent, private sector workers for 30.3 percent, and government employees for 5.3 percent (18.4 percent). The respondents were between the ages of 17 and 55. A total of 62 percent of FinTech users are between the ages of 20 and 30. According to the poll results, 53.2 percent of them are very knowledgeable with FinTech. Many definitions exist for the term "fintech." Fintech is said to be a combination of "financial" and "information technology," according to some scholars. Based on the results of a research survey conducted by Zavolokina et al. in different countries around the world, as Research-1, and the results of this research survey, as Research-2, concerning people's perceptions on the meaning of FinTech in Indonesia, as indicated in Table.

No.

Meaning of Fintech

Research-1

Research-2

1

Application IT to Finance

35.7 %

85.7 %

2

StartUps

25.0%

2.6%

3

Financial Services

21.4%

7.8%

4

Technologies

17.9%

3.9%

Fintech is defined as IT applications to finance, according to the findings of these two study polls. As a result of the findings of this study, FinTech will develop numerous technological advances in the financial business sector as an IT application for finance based on its mechanism.

No

Function of Fintech

Research- 1

Research- 2

1

Apply and combine IT to Finance

35.5 %

63.6%

2

Disrupt

25.8%

2.6%

3

Create/Change/improve service

22.6%

28.6%

4

Create competition

16.1%

5.2%

The two research polls revealed the public's perspective of Fintech's role. As a consequence of the findings of the two studies, many people believe that Fintech's primary purpose is to apply and integrate technology into the financial business.

4.1 Critical Review & Analysis

The results of the Fintech conceptual framework are based on a careful assessment and analysis of the literature as well as the foundations of diverse theories. Business drivers are an input, Fintech mechanisms are an output, and Technological Innovation is an input.

4.1.1 Business Drivers

Business drivers that disrupt, apply IT to finance, and promote competitiveness for technology innovation in financial industry sectors. According to the findings of the poll, technology is one of the most important business drivers (68.8 percent). Money flow came in second (20.8 percent) and was followed by the organisation (10.4 percent) in driving business in the banking sector. In keeping with past Fintech research that emphasize the role of technology in conducting business.

4.1.2 FinTech Mechanism

FinTech mechanisms can help businesses grow, evolve, and improve. FinTech also causes financial industry disruption. Additionally, implementing IT for finance can result in increased business competition. Fintech disrupts (1.9 percent), implements IT in finance (67.9%), and creates corporate competitiveness, according to survey data (5.2 percent).

4.1.3 Technological Innovation

FinTech is a technology advancement that results from financial sector business innovation, resulting in new services/products, procedures, and business models. According to the findings of the survey, Fintech innovation resulted in 37.6% new services and products. In addition, 33.8 percent of FinTech creates new business models, according to the survey data. Finally, 28.6% of technology innovation results in a new financial business procedure.

Conclusion

The goal of this study is to create a conceptual framework for presenting the FinTech mechanism's involvement in technical innovation in the financial services industry. The findings of this study show that defining FinTech as an IT application for finance based on its mechanism will result in a wide range of technical breakthroughs in the financial services industry. This study's conceptual framework for FinTech was built on various underlying theories and corroborated the survey's findings. The main constructs in the FinTech idea are the Business Driver, Fintech Mechanism, and Technological Innovation. Finally, the FinTech conceptual framework developed as a result of this research will aid future Fintech development for practitioners and scholars. FinTech's conceptual framework can be tested in the future through actual research.

 

References

P. Gomber, J.-A. Koch, and M. Siering, “Digital Finance and FinTech: Current Research and Future Research Directions,” J. Bus. Econ., vol. 87, no. 5, pp. 537–580, 2017. 

Y. Kim, Y. Ju Park, J. Choi, and J. Yeon, “The Adoption of Mobile Payment Services for ‘Fintech,’” Int. J. Appl. Eng. Res., vol. 11, no. 2, pp. 1058–1061, 2016. 

R. Minerva, “The Potential of The FinTech Industry to Support the Growth of SMEs In Indonesia,” 2016. 

K. P. Prawirasasra, “Financial Technology in Indonesia: Disruptive or Collaborative?” Reports Econ. Financ., vol. 4, no. 2, pp. 83–90, 2018. 

V. R. Wulan, “Financial Technology (FinTech) A New Transsaction in Future,” J. Electr. Eng. Comput. Sci., vol. 2, no. 1, pp. 177–182, 2017. 

D. Varga, “FinTech, The New Era of Financial Services,” Budapest Manag. Rev., vol. 11, no. 3, pp. 22–32, 2017.

L. Zavolokina, M. Dolata, and G. Schwabe, “FinTech – What’s in a Name?” Thirty Seventh Int. Conf. Inf. Syst. Proceeding, no. May 2018, pp. 1–19, 2016. 

V. E. Erosa, “Online Money Flows: Exploring the Nature of the Relation of Technology’ s New Creature to Money Supply — A Suggested Conceptual Framework and Research Propositions,” Am. J. Ind. Bus. Manag., vol. 8, pp. 250–305, 2018. 

R. Alt, R. Beck, and M. Smiths, “FinTech and the transformation of the financial industry FinTech and the transformation of the financial industry,”. Electron. Mark., no. August, pp. 2–10, 2018. 

O. Oshodin and S. Karanasios, “Is FinTech a Disruption or a New Eco-system? An Exploratory Investigation of Banks’ Response to FinTech in Australia,” Australas. Conf. Inf. Syst. Proceeding, pp. 1–11, 2017. 

C. Lin and C. Jung, “Factors affecting the innovation in logistics information systems for logistics service providers in Taiwan,” J. Inf. Inf. Sci., vol. 27, no. 3, pp. 629–648, 2006. 

S. Khazanchi et al, “Innovation-supportive culture: The impact of organizational values on process innovation,” J. Oper. Manag., vol. 25, no. 4, pp. 871– 884, 2007. 

S. Saksonova and I. Kuzmina-Merlino, “Fintech as Financial Innovation – The Possibilities and Problems of Implementation,” Eur. Res. Stud. J., vol. XX, no. 3, pp. 961–973, 2017. 

M. Z. Fadilah, S. Abdul Wahab, A. Al-Mamun, A. S. Yacoob, N. K. Al Sami, and S. A. Fazal, “Defining the Concept of Innovation and Firm Innovativeness: A Critical Analysis from Resorce-Based View Perspective Defining the Concept of Innovation and Firm Innovativeness: A Critical Analysis from Resorce-Based View Perspective,” Int. J. Bus. Manag., vol. 11, no. 6, pp. 87–94, 2016.

A PESTLE ANALYSIS

 

A PESTSLE ANALYSIS

Research on a PESTSLE ANALYSIS

Offshore Platform Decommissioning in the Oil and Gas Industry

 

Executive Summary

The increasing complexity of environmental issues has prompted the development of Sustainable Business Models (SBMs) that can integrate economic, environmental, and social flows into a single value network. The oil and gas industry, for example, is seeking innovative and long-term solutions to the problem of offshore platform decommissioning. Despite the fact that relevant literature has emphasized the benefits of multi-reuse of these buildings, the impact of Sustainable Decommissioning (SD) on macro-environmental parameters remains unknown. Based on these considerations, this study conducts a PESTLE (Political, Economic, Social, Technological, Legal, and Environmental) analysis based on semi-structured interviews with key informants and stakeholders in the oil and gas industry in Italy. The findings of the study can lead to new ways of thinking about how to address the challenges of sustainable offshore platform decommissioning, as well as the importance of combining economic and environmental sustainability with social needs through synergistic efforts by local entrepreneurship and institutional arrangements. This work can contribute to the growing subject of sustainable business models for offshore platform decommissioning, as well as identify future research directions.

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Introduction

The 17 macro-objectives, also known as Sustainable Development Goals (SDGs), declared by the United Nations General Assembly on September 25, 2015, have been called on countries, organizations, and citizens to pursue in the next decades. The SDGs aim to promote organizational operationalization and integration of sustainability, addressing current and future stakeholder needs, and ensuring a better and sustainable future for all, while balancing economic, social, and environmental development, which has a significant impact on employment, innovation, climate change, and blue growth. In this regard, there is a rising recognition in the corporate world of the importance of sustainability issues and the necessity to meet the challenge of sustainable development in order to address more conscious environmental and social concerns. As a result, over the last ten years, the topic of a Sustainable Business Model (SBM) has gained increasing traction in the literature and across a variety of industries, prompting businesses and academics to look for new ways to improve their impact on the three pillars of sustainability: profit, people, and planet. Innovation, management and marketing, entrepreneurship, energy, fashion, healthcare, agri-food, supply chain management, circular economy, developing countries, engineering, construction and real estate, mobility and transportation, and hospitality are just a few of the areas where these models can be used. Furthermore, creative solutions in the oil and gas industry necessitate the incorporation of sustainable business models capable of supporting the energy transition and mitigating climate change consequences in competitive strategies.

The decommissioning of offshore platforms is one of the most pressing concerns in this industry, both in terms of social, environmental, and technological consequences. Many offshore platforms exist around the world that have ensured the extraction of hydrocarbons into the water for the duration of their operations. Once the reservoir is drained or the structure has outlived its useful life, they become large-scale structures with a complex and expensive disposal process that has an environmental impact. Decommissioning activities for offshore platforms have received more attention in recent years, owing to the fact that their service lives are coming to an end all over the world. Decommissioning is the process of deactivating a facility when it has reached the end of its useful life. Abandoned or decommissioned offshore installations or structures must be removed from any continental shelf, according to international norms. However, because of the high costs of decommissioning as well as environmental concerns, international legislation are gradually shifting toward a more flexible approach if technological estimates allow it. Indeed, experts and academics have agreed that partial platform removal can provide better environmental outcomes than complete platform removal in terms of biodiversity enhancement, reef habitat provision, and protection from bottom trawling, all of which are negatively impacted by complete platform removal. As a result of this understanding, several countries have decided to leave old structures as artificial reefs or find other ways to repurpose these assets in a sustainable way.

Several scenarios involving energy production from wind and photovoltaic farms in decommissioned offshore platforms have been studied in the literature, with the goal of producing renewable energy to produce hydrogen, to allow the methanation process, or to produce fresh water from the desalination process. In this direction, a Sustainable Decommissioning (SD) is defined as a process that aims to achieve the most efficient and sustainable solution by considering both technical and environmental aspects, as well as assessing a multi-conversion of these assets aimed at improving social well-being and local entrepreneurship initiatives. Despite the fact that relevant literature has highlighted the potentialities associated with multi-reuse of these structures, the impact of sustainable decommissioning of offshore platforms on macro-environmental factors, particularly social well-being and local entrepreneurship, remains a collective and open question, particularly in the Italian context, which has yet to be investigated in those terms. There are 138 platforms in Italy that are nearing the end of their manufacturing cycle and will be demolished as a result. By 2021–2022, 21 platforms will have been decommissioned in the Northern Adriatic Sea alone.

Tools and Technique

The study uses a PESTLE analysis (also known as PEST or PESTEL) based on semi-structured interviews with oil and gas key informants and stakeholders, including experts, practitioners, and scholars in the Italian context, to investigate the impact of Sustainable Decommissioning (SD) of offshore platforms on macro-environmental parameters. This type of analysis was created to evaluate an industry's or business's external macroenvironment. It is widely seen to be beneficial in identifying and comprehending the main political, economic, social, technological, legal, and ecological elements that are likely to influence a complicated process like offshore platform decommissioning. It can assist decision-makers in considering potentials or difficulties that may have an impact on their initiatives' success. PESTEL analysis has been used as a framework for strategic decision-making and to help design future scenarios and business models. A qualitative technique was used to study the PESTLE variables, drawing on a sample of six individual interviews and one focus group of four individuals, for a total of ten participants. In order to consider the entire actors who, participate or can participate in the sustainable decommissioning process, semi-structured interviews were conducted with key informants and stakeholders, including experts, practitioners, and scholars from the oil and gas industry, as well as the green energy sector, tourism, NGOs, and the aquafarm industry in the Italian context.

No. of Offshore platforms

Status

Competent Port Authority

Structure’s Characteristics

3

Inactive

Chioggia

Monotubular

35

Inactive 2

Active 33

Ravenna

Monotubular; reticular structure with 3,4,6,12 legs

19

Inactive 3

Active 16

Rimini

Monotubular; bitubular, reticular structure with 3,4,6,8 legs

8

Active

Pesaro

Underwater well head; reticular structure with 4 or 8 legs

2

Inactive

Brindisi

Underwater well head

24

Active

Ancona

Underwater well head; reticular structure with 3,4,8 legs.

3

Inactive 2

Active 1

Porto Empedocles

Underwater well head

11

Active

San Benedetto

Underwater well head; Monotubular; reticular structure with 4 or 8 lags

12

Active

Pescara

Underwater well head; Monotubular; bitubular reticular structure with 3,4,8 lags

6

Active

Crotone

Underwater well head; Monotubular; reticular structure with 4 or 8 lags

2

Active

Termoli

Reticular structure with 4 or 8 legs

6

Active

Ortona

Monotubular; reticular structure with 4 or 5 legs

6

Active

Gela

Underwater well head; reticular structure with 4,8,20 legs

1

Active

Pozzallo

Reticular structure with 8 legs

Identification of appropriate respondents from the oil and gas industry, as well as other sectors with deep knowledge of environmental and sustainability practices, was a critical step in this research. Three researchers investigated 10 key informants from the following main stakeholder groups over the course of three months (February to April 2021):

Oil and gas company

Green energy entrepreneurship is a term that is used to describe a business that is focused

Tourism and leisure activities entrepreneurship

Non-profit organization specializing in aquaculture entrepreneurship.

Because of the pandemic's restrictions, the interviews and focus group sessions were conducted online. The interviews lasted an average of 60 minutes and consisted entirely of open-ended questions. The interview protocols were supplied to the respondents ahead of time since it was anticipated that doing so would help them organize their ideas better. Additional information from the respondents' websites and publications was used to create a clearer picture of their sustainable strategies and the state of the industries studied. Second, the researchers posed issues about how to decommission offshore platforms in an environmentally friendly manner. The experts, on the other hand, were encouraged to communicate, even if the researcher followed the interview procedure. To ensure a more consistent transcription, the interviews were transcribed using notes and recorded. The PESTLE analysis' findings are summed up. 

The PESTLE criteria are focused on potentialities and issues connected to political, economic, socio-cultural, technical, legal, and environmental considerations on the long-term decommissioning of offshore platforms in the Italian context, according to the data studies.

P-Politics

In the reconversion of offshore platforms, political factors play a crucial role. Indeed, as noted in the literature, international policy on offshore platforms is gradually changing, and a more flexible approach based on partial removal or re-appointment of facilities depending on the circumstances of each case is evolving. This is owing to global influences like as sustainable approaches and circular economy concepts, which have pushed for a more sustainable reconversion of offshore platforms. Baltic countries have already made significant progress in making their energy systems greener, according to a major informant in the green energy industry. According to mounting data, the Baltic countries have huge offshore wind energy potential, which might have a revolutionary impact on the entire region. They should be emulated by Italy. Several efforts based on the adaptation of oil and gas platforms with solar and wind energy systems have been carried out in the North Sea as well. Because the plants are built on offshore platforms that are far from the shoreline, the local populace is supportive of these activities.

E-Economics

Economic considerations bring to light a crucial feature of the long-term decommissioning of offshore platforms, namely the ability to encourage local entrepreneurship's economic growth. Indeed, according to key informants, the reconversion of these structures can be viewed as an economic stimulus from a variety of perspectives, including:

Centers for marine weather.

Plant for extracting salts or minerals from seawater.

Construction of a regasification station.

Wind turbines, solar panels, and tidal energy are all examples of renewable energy sources.

Tourism efforts and sports events draw a large number of visitors.

Construction of a suitable artificial reef.

During the focus group, an engineer who specializes in oil and gas offshore platforms said: "It will be required to analyze the geography of the platforms and their characteristics in order to understand how they may be changed in terms of creating new business ventures." However, as the literature suggests, this economic stimulus for business expansion could result in a boost in employment rates in Italy. A key insider from a major environmental organization stated, "We need a cultural and economic revolution that makes Italy completely green, contributes to job creation, and protects the climate and ecosystem." A growing number of green-energy-related jobs, as well as marine possibilities tied to commodities and services on the sea, can be created through sustainable decommissioning.

Research on a PESTSLE ANALYSIS

S-Social

Socio-cultural characteristics point to the likelihood that the long-term decommissioning of oil and gas offshore installations could increase social well-being by acting as a driver of income redistribution and career advancement as well as an incentive for the energy transition. In a local report from Ravenna titled A window on the future of energy (2019), Dr. Stefano Silvestroni, President of Shipbuilding and Chairman of the Board of Directors, Rosetti Marino Group, stated that a sustainable initiative related to offshore platforms can improve social sustainability, as they are a key source of employment and income in several sectors, including construction, infrastructure, tourism, aquaculture, and so on. These entrepreneurial operations have the potential to generate tens of thousands of employments, as well as improved health and safety standards. The conversion and maintenance of these assets will necessitate collaboration between structural engineers, energy experts, and project managers, all of whom will play a key role in monitoring the platforms' efficiency and safety, as well as ensuring that entrepreneurship initiatives are carried out in accordance with environmental protection standards. A sustainable decommissioning could help the energy transition, boost high-value jobs, and preserve the skills needed to achieve a lower-carbon future, according to the valuable example of the United Kingdom. This scenario has the potential to reduce air pollution, CO2 emissions, and food insecurity while also having a significant influence on long-term social well-being.

T-Technological

First, there's the prospect that offshore platforms will operate as a spur for R&D and innovation. In this regard, the mayor of Ravenna stated in the report: "I am receiving managers who are faced with the decision of whether to invest in our area or overseas more and more frequently." Here, I feel one of our responsibilities as administrators is to know how to respond in a way that ensures such investments are made in the area, because this often entails the preservation or creation of jobs. In research and development, collaboration with academics and the creation of new skills in the future workforce play a role. Operators, supplier chains, and regulators should all be well-connected in this regard.

L-Legal

The default requirement in most countries' legal frameworks, as well as in the Italian context, is that offshore structures be completely removed from the seabed. However, a long-term approach to decommissioning has led to a gradual shift in international rules toward a more flexible strategy based on partial decommissioning. Apart from economic concerns, which affected oil and gas firms' decisions to postpone the removal procedure if economic and technical estimates allowed it, social and environmental considerations have also pushed for a reinterpretation of the major laws. The Ministry of Economic Development in Italy is in charge of overseeing the oil industry (MISE). The National Mining Office for Hydrocarbons and Georesources (DGS-UNMIG) is in charge of the Ministry's hydrocarbons and georesources. These instructions outline the approach for decommissioning Italian offshore installations, taking into account a variety of possibilities and laying out all of the dates and responsibilities associated with each phase of decommissioning. This declaration includes advanced considerations, such as the possibility of reusing the platforms, as well as a detailed requirement for documentation to provide the best possible decommissioning environmental management.

E-Environmental

Finally, environmental concerns are at the heart of discussions on how to make offshore platforms more sustainable. Most significant and influential environmental NGOs (eNGOs) have had one dominant discourse in regard to the offshore decommissioning of oil and gas platforms due to their environmental impact since the 1990s. Recently, several eNGOs have appeared to connect with an eco-centric narrative that favors, where possible, the option of converting offshore facilities to give back to nature. Floris van Hest, director of Stichting de Noordzee, for example, stated in Nexstep's 2018 decommissioning report: From an ecological standpoint, the re-use of oil and gas infrastructure for other uses may give benefits, because we prevent the environmental degradation. In this sense, the platforms can support a wide variety of fish and invertebrate assemblages, which are also important as aquaculture food, and many of which are of significant ecological importance and/or protected by various international and national laws. Exclusion zones around oil platforms, which prohibit the use of living biological resources, add to these advantageous conditions. As a result, removing these structures is unlikely to be the greatest strategy from an environmental/ecological standpoint, and this awareness has led several countries to keep outmoded structures as artificial reefs and discover alternate options for their long-term utilization.

 

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