Closing the Blue Funding Gap: A Blue Investment Readiness Index for SIDS

Small Island Developing States (SIDS) are, in fact, Big Ocean States (BOS), controlling 30% of global oceans, making a sustainable blue economy a viable path towards resilient, inclusive prosperity, and positioning SIDS as leaders in blue innovation. However, current financial flows into the blue economy often continue to support unsustainable activities and extractive industries that do not necessarily benefit local communities and which can harm marine and coastal ecosystems. Moreover, in the race for untapped ocean resources as the next frontier for sustainable development, SIDS are being left behind, failing to receive crucial investments, and raising concerns about equity and benefit-sharing between them and the Global North. Three case studies from Mauritius and Seychelles reveal that current national policies and ecosystems are not conducive to fostering blue innovation or supporting small-scale, early-stage innovators and entrepreneurs working in ocean-related areas. These barriers limit the ability of SIDS to actively participate in sustainable sectors of the blue acceleration, impeding the provision of potential benefits to local communities.Building on the author’s previous work that proposes the Big Ocean States Innovation and Impact Fund (BOSIIF) as a mechanism to address the blue funding gap, this paper introduces the Blue Investment Readiness Index, designed to build science-based, community-centric investment ecosystems for SIDS and enhance investment flows into sustainable blue economy sectors. The BOSIIF framework emphasized the importance of valuing SIDS’ natural capital—the ocean—and human capital—local communities—as dual pillars for sustainable economic development. Expanding on the foundational principles of BOSIIF, the Index integrates key metrics to assess investment readiness, emphasizing science-based frameworks and community participation as core pillars. The Index measures factors such as community-driven innovation capacity, integration of local knowledge with scientific research, frameworks for science-backed policies, accessibility of early-stage financing for community-led, evidence-based solutions, and national research and development (R&D) capacity to support ocean and climate resilience.Using Mauritius as a pilot, this paper sets benchmarks for locally driven R&D capacity, natural capital management, national budgetary alignment with climate-resilient practices, the inclusion of community priorities in innovation pathways, and crucially, the investment-attraction capacity of local innovators and small-scale entrepreneurs. Ultimately, the Index, applicable to other SIDS, provides targeted recommendations to empower SIDS to lead in sustainable ocean innovation by channeling investments toward science-informed, community-centered initiatives.