The Arctic Opportunity

And, it’s not just the blessing of geography that presents Alaska with this opportunity. Alaska is home to a wide range of companies with world class capabilities in conducting business and carrying out projects in the far north. In addition to the business experience and expertise present in the state, Alaska is also home to a number of important Arctic policy agencies and organizations, as well as scientific research centers and cultural institutions.

One further advantage for Alaska is the state’s Native peoples who have lived in the Arctic for thousands of years. They possess traditional knowledge of the lands, waters, and wildlife passed down through the generations. When joined with modern technologies and methodologies, this local expertise can help to ensure the success of projects.

Companies operating in Alaska—whether local, national, or multi-national—have demonstrated their abilities to do business in a very challenging part of the world. They’ve learned to deal with extreme weather conditions, isolated job sites, extended supply chains, and a host of other conditions that require high levels of technical expertise and management. They’ve accomplished this under what are arguably some of the most stringent environmental standards.

Particularly in the areas of natural resource development, such as oil, gas, and mining, companies operating in Alaska have the credentials to seek out and win business in other parts of the world, including other areas of the Arctic—and are doing so. At the same time, there are opportunities for American and foreign companies to come to Alaska and establish partnerships and joint ventures with Alaska firms for projects both in Alaska and elsewhere in the region. Many Alaska Native corporations, for example, have operating subsidiaries that specialize in Arctic development. These companies not only do business in Alaska, they are also investors and participants in businesses and projects worldwide.

Institutions interested in gaining portfolio exposure to investment opportunities in the Arctic will find Alaska home to a private equity company that focuses specifically on these investments. Anchorage-based PT Capital, founded in 2013, is the first private equity firm in this space and is currently putting money to work in a number of Arctic markets, including Alaska, Iceland, Finland, and Canada. They have made investments in an Icelandic telecommunications company and a hotel group in Finland, among others.

Besides business enterprises focused on the Arctic, a number of government agencies and non-governmental organizations involved with Arctic policy are based in Alaska. These include the US Arctic Research Commission and the Institute of the North, both headquartered in Anchorage. There are scientific research centers in Alaska with an Arctic focus including the International Arctic Research Center and the Cold Climate Housing Research Center. Both of these entities are located in Fairbanks. In the area of education, the University of Alaska Fairbanks is a member of the University of the Arctic, an international network of universities, colleges, and research institutes involved with education and research in the North. University of Alaska Fairbanks is also a recognized world leader in wide array of Arctic-related research endeavors.

To better understand the opportunities posed by development of the Arctic—and the role Alaska can play—for the past seven years World Trade Center Anchorage has conducted Arctic Ambitions, an annual international conference and trade show focused on trade, commerce, and investment in the Arctic. In a nutshell, the event concerns itself with “the business of the Arctic.” The event highlights business opportunities associated with commercial development in the Arctic, including natural resource extraction (oil, gas, and mining), engineering, design, construction, environmental services, mapping , charting, energy, emergency response, tourism, telecommunications, maritime shipping, and others.

From these gatherings of business executives and government officials, a set of questions has emerged that serve to put into focus some of the fundamental issues related to commercial development in the region:

• Which projects need to be developed?
• What are the priorities? In other words, which projects come first?
• What do the projects cost and who do they serve?
• Who Pays? Government? Private sector? Both?
• What are the economic triggers to justify project development?
• What is the timeline? In other words, when?

The answers to these questions, of course, are a work in progress and don’t always flow in a straight line. But with time the answers will come and Alaska, as America’s Arctic state, can play a key role. The opportunity for the state is simply too big to ignore. In a recent report by Lloyd’s of London, it’s estimated the investment needed in the Arctic in the next ten years is in the range of $100 billion for infrastructure projects such as ports, pipelines, roads, and power generation. If Alaska garners just a small percentage of the expected build out, the revenues, jobs, and other economic benefits would be considerable.

With its strategic geographic location and considerable inventory of Arctic-related assets, Alaska is poised to serve as the commercial gateway to the American Arctic. And, as the world increasingly looks north for opportunities and solutions, Alaska is uniquely situated and prepared to play a leading role.