Answering ethical questions posed by the Fourth Industrial Revolution

The fourth industrial revolution is upon us. Also known as "Industry 4.0" or "4IR," it takes the technological advances of the third industrial revolution and connects them into systems that can often operate and adapt without human input. New technologies can create exciting possibilities for positive social impact on diverse issues such as income inequality and the environment.

Yet, at the same time, they often raise new, sometimes difficult, ethical questions. In fact, the irony is this: As we develop technologies that adapt without human input, we are discovering we need human input to address what constitutes the ethical use of these technologies.

As mentioned in a Deloitte article, most leaders want their organizations to create social impact. In today's competitive business environment, social impact initiatives have the ability to separate one company from its competitors in the eyes of consumers. The logic that a company "does well by doing good" has taken hold. And 4IR technologies promise to support companies' efforts to reduce carbon emissions, support diversity initiatives, and other social impact goals.

Yet some leaders are also recognizing that 4IR technologies raise ethical questions in areas such as data privacy, algorithmic bias, and potentially a lack of inclusivity in technology design.

According to Deloitte Global CEO Punit Renjen's report, "Success Personified in the Fourth Industrial Revolution," which is based on a Forbes Insights survey, C-suite executives have varying levels of concern about using technology ethically. From June-August 2018, Forbes Insights surveyed 2,042 executives (with company revenue of $1 billion or more) and public sector leaders (with organization budgets of $500 million or more) from 19 countries and all major industry sectors.

As shown in Figure 2 below, only 15 percent of the 194 CEOs/presidents surveyed are strongly concerned about ethical technology use. Surprisingly, chief information officers and chief technology officers are also at the lower end of the spectrum, at 16 percent and 17 percent, respectively. On the other hand, 41 percent of chief operating officers, 41 percent of chief digital officers, and 50 percent of chief sustainability officers are strongly concerned about ethical technology use.

This disparity in levels of concern about ethical technology use at the top of the organization often results in lack of clarity throughout the rest of the organization. Deloitte offers three recommendations to address this:

1. C-Suite adoption: The CEO must prioritize ethical technology use and encourage the rest of the C-suite to do so too.
2. Culture change: The C-suite must set, model, and communicate ethical use of technology and encourage buy-in from employees by allowing them to share ideas about ethical technology use.
3. Adapt: As technology continues to change, companies must continue to define how to use it ethically.

Ethics are important in and of themselves. However, there may also be business benefits for prioritizing ethical use of technology.

As shown in Figure 1 below, Deloitte's analysis of the Success Personified report found a correlation between high concern for ethical use of 4IR technologies and business growth. Of the 536 respondents whose organizations had 0 percent growth, only 17 percent of them strongly agreed that their organization is highly concerned with ethically using 4IR technologies.

On the other hand, of the 148 respondents whose organizations had 10 percent or more growth, 55 percent of them strongly agreed that their organization is highly concerned with ethically using 4IR technologies.

As more companies aim to make a social impact, C-suite leaders should consider the ethics of 4IR technology implementation to grow as a business and stand out among competitors.

---

This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as "Deloitte Global") does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the "Deloitte" name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.

Cross-functional teams help aid innovation. Photo by Hinterhaus Productions/Getty

Deloitte lays out the benefits of digital innovation

Some workers fear technology, wondering "will a robot eventually replace my job?" Yet, Deloitte Insights and MIT Sloan Management Review found in a recent study that the more a company uses digital technology, the more likely it is to be innovative, which can benefit individuals, teams, organizations, and groups of organizations.

Deloitte and MIT collaborated for the fifth time to conduct a global study about digital innovation. They surveyed more than 4,800 businesspeople and interviewed 14 subject matter experts. The results were published in a June 2019 report titled "Accelerating Digital Innovation Inside and Out."

Deloitte and MIT shared two main findings from the survey:

Digitally maturing companies innovate at higher rates — both internally and externally — than companies with early or developing digital maturity.
Companies should know their ethics so that they can innovate wisely.

Internal innovation
Most digitally maturing companies innovate internally in two ways. First, they typically allow individuals to innovate within their jobs. The more digitally mature a company is, the more likely an employee was to say that more than 10 percent of their work involves the opportunity to experiment and innovate. The opposite was also true. Employees of less digitally mature companies were more likely to say that less than 10 percent of their work involves the opportunity to experiment and innovate.

In addition to encouraging individuals to innovate, most digitally maturing companies urge groups to innovate by establishing cross-functional teams. These teams are generally comprised of individuals from across multiple departments and roles and often exist to accomplish a specific task. Deloitte and MIT found that 83 percent of digitally maturing companies surveyed use cross-functional teams. This is far higher than respondents of either developing or early-stage companies' cross-functional team use — 71 percent and 55 percent, respectively.

External innovation
In addition to having employees innovate internally (both individually and in groups), digitally maturing companies often innovate externally by collaborating with others (e.g., their customers, their competitors, government institutions, and more) in their ecosystem. Ecosystems, which are formal or informal networks of organizations working toward a common goal, typically feed innovation in two ways. First, they integrate platform companies, meaning that companies that provide services to other companies — such as Amazon and PayPal — are both a part of the ecosystem and also strengthen it by being part of it.

Second, digitally maturing companies allow all organizations within the network to get better feedback. A company is not just getting feedback from their own customers, but from all customers within the ecosystem.

Ethics and innovation
In order to get the most benefit from their internal and external collaborations, companies should use "loose coupling," a term first coined by organizational theorist Karl Wieck. This means that individuals are linked to teams, teams to the organization, and the organization to fellow members of its ecosystem — but not too tightly. This model allows people the freedom to have both some autonomy and also some oversight as they innovate. If people are micromanaged, they are not able to innovate as well.

Because innovation requires loosening the reins somewhat, companies should have strong ethics systems in place. Otherwise, innovation can get out of hand, and a company risks having employees develop goods or services which aren't in line with organizational values.

Survey conclusion
Over half (56 percent) of survey respondents said they think their organization will exist and be in a much stronger position in 10-20 years due to the organization's use of digital capabilities. A similar percentage (44 percent) of survey respondents said that in 10-20 years, they think that their organization will have been bought out or gone out of business. Companies can act based on market and competitive forces but cannot control them. Companies can, however, decide how much of a priority digital innovation will be.

If they decide it is a priority, how can companies become more innovative? Companies should consider several tips:

Work with other organizations within your ecosystem.
Prioritize cross-functional teams.
Use loose coupling which allows room for trial and error.
Establish and continually update your ethics guidelines.

Innovation in Houston
The Houston innovation scene is thriving, and local organizations know that they are stronger together than apart. Houston Exponential is a "nonprofit organization created to accelerate the growth of Houston's innovation ecosystem" which hopes to "turn Houston into a hub for high-growth high-potential companies by creating pathways for innovation to flow at scale." Houston Exponential has stakeholders from companies, non-profits, government entities, and academic institutions.

---

Digital is becoming the way to go. Photo by Towfiqu Photography, Getty Images

Experts discuss the digital transformation of the oil and gas industry

With the disruptive challenges the energy industry faces on a daily basis, the need for digitization has never been more apparent. In "Bits, Bytes, and Barrels: The Digital Transformation of Oil and Gas," authors Geoffrey Cann, retired partner at Deloitte Canada, and Rachael Goydan, Deloitte Consulting LLP managing director, analyze the current landscape for digital technologies in the energy business.

In this Q&A, we will get an exclusive peek into some of the key themes that Cann and Goydan discuss throughout their book, touching on the barriers to digitization and all that it can offer to the energy industry.

Amy Chronis, Houston managing partner, Deloitte LLP: What exactly is digital, and is the definition changing over time?

Rachael Goydan: Simply put, digital is comprised of three elements: data, analytics, and connectivity. It could be anything from a smartphone, computer, or car to a refrigerator or doorbell. Digital objects have the ability to generate data and do analytics and computations. They also have to be connected with other devices to be considered a digital object.

We have been seeing exponential growth over the last 5-10 years in terms of what digital is capable of, and what that means to the energy industry. Digital is constantly evolving, and its impact may even be different tomorrow. In oil and gas, there are now more ubiquitous forms of unstructured data being used, such as sounds, vibrations, or photographs. It has become relatively inexpensive to have computing power on a device and the accessibility of programming languages has grown.

AC: Digital has disrupted other industries, but is disruption possible in oil and gas?

Geoffrey Cann: There are many digital concepts that can disrupt business in oil and gas. Much like the cloud car and designer fuel, which allows consumers to pick their fuel origin, the use of artificial intelligence to interpret streaming data from cameras could introduce truly robotic eyes on oil and gas assets 24/7. Historically, the oil and gas industry has been change-averse, so the timing and size of the impact is expected to vary by sector.

Our research has found that technology suppliers, service providers, and retailers may be affected the most by digital disruption. Explorers and producers may be affected less, as their business is often already driven by data. The midstream segment has heavy assets running 24/7 that are hard to take offline, and they cannot add new technologies easily. The impact they feel will likely be less than tech companies.

In resource value, digital has already begun to disrupt. For example, some companies are using high-definition photography to take pictures of drilling cuttings, which are then pieced together via cloud using artificial intelligence and machine learning. These drilling cuttings can have one million times better resolution than with seismic.

AC: I've heard you speak about digital in oil and gas in the past, and you frequently say that digital isn't about the technology but about how people work. Could you give some examples here?

RG: Leaving digital to chance doesn't work. Companies may benefit from having information technology professionals bring expertise, cybersecurity, corporate infrastructure and assets, a help desk, virus detection and remediation, and so on. Companies may also benefit from having operational technology people, who have knowledge of the facilities, contributing a solid understanding of the sources of change resistance and how to address them. These groups will work together with the business. Some companies even have a separate digital team that helps them with change management, using a clean sheet of paper approach.

Companies also may need to recognize that there are different ways of working. Agile methods are how digital gets done versus the waterfall method. They are almost opposite ways of doing work with different speeds. Digital requires some companies to change the way they do things. Changes are to happen on a monthly, weekly, and even daily basis.

AC: Is it true that digital in oil and gas has as much potential as in other industries?

GC: Companies in upstream oil and gas are now being valued more on cashflow than traditional reserves valuation. At its heart, digital is about efficiency, which is top of mind for a lot of clients as well. To give the best return to investors, oil and gas companies may need to consider focusing on efficiency and productivity rather than focusing on reserves growth.

Oil and gas has the opportunity to tap into a key feature of the digital world: an ecosystem of resources that includes incubators, university labs, accelerators, and startup groups. Our research has shown companies in oil and gas are much less tapped into this new community of digital innovation. Because digital changes so rapidly, the industry may benefit from plugging into the existing ecosystem to take advantage of the skillsets and capabilities that are out there.

---

Bitcoin is an example of blockchain. Photo by Dan Kitwood/Getty Images

How blockchain is emerging as a core building block

Blockchain technology seems to warrant our attention. Once seemingly confined to cryptocurrency, today blockchain is relevant to entities across many industries. It is even enabling some longstanding competitors to collaborate for mutual benefit. With applications that seem endless and enriching, blockchain may require consideration by companies and potential regulatory oversight by governments.

So, what is blockchain? In its simplest form, it's a way of storing and sharing digital information without an intermediary. Once the data is recorded, it can't be changed, and users can access it anonymously. The most well-known use of blockchain is probably bitcoin, a digital currency. However, there are many other uses for blockchain, such as tracking loyalty points and allowing people to pay for purchases using virtual wallets.

For Deloitte's 2019 Global Blockchain Survey, Deloitte's independent research team interviewed 1,386 senior executives from companies that use or may consider using blockchain, and employees from 31 companies that facilitate blockchain use. Fifty-six percent of survey respondents believe that blockchain is no longer a theoretical concept, but a technology that companies should consider using to keep pace with their competitors.

Houston innovating with blockchain
As an InnovationMap article notes, multiple Houston companies are embracing blockchain. Iownit.us has developed a platform for digital private securities, providing an easier ongoing connection between companies and their investors. Data Gumbo is using blockchain to create smart contracts between businesses in the energy industry. Social Chain allows individuals (rather than social networks) to earn money when their personal data is sold to marketers. Another Houston company, Topl, has six platforms to provide supply chain information — e.g., in agriculture, tracking food products from farm to shelves. Houston innovators have formed the Houston Blockchain Alliance, a blockchain networking group that meets regularly to discuss opportunities.

Beyond cryptocurrency
Now that the focus is no longer on if blockchain will work, but how, business leaders are faced with the challenge of incorporating it into their business models. Deloitte's 2019 Global Blockchain Survey states, "executives should no longer ask a single question about blockchain but, rather, a broad set of questions reflecting the role blockchain can play within their organizations." These questions address topics ranging from how blockchain is expected to change industries to what the organizations' "blockchain blind spots" are.

Collaborating with competitors
Blockchain is usually not organized and run by a single entity. For optimal effectiveness when using blockchain, some companies may opt to join a consortium, which as the InnovationMap article states, allows companies to come "together with others in [their] horizontal or vertical ecosystem, in common purpose." Consortia members must agree on their goals, governance, funding, intellectual property ownership, and more. Despite these challenges, 92 percent of survey respondents are either already consortium members or plan to join one within the next year.

Conclusion
The future of blockchain appears bright. This technology is no longer a vision, but a reality — one that companies and countries should consider implementing as technology becomes more and more relevant across industries and around the world.

---

Workers think in terms of projects, not long-term employment. 10'000 Hours/Getty Images

Deloitte: Be purposeful in defining your work

Get to Work

Not that long ago, employees had a defined role at a consistent worksite for the same company for many years. The employer-employee relationship seemed stable and well-defined. But times have changed. In a recent Deloitte Insights article, "What is the Future of Work?," Deloitte highlights how "forces of change" — e.g., accelerating connectivity, new talent models, artificial intelligence, crowdsourcing, etc. — are radically redefining the who, what, and where of work.

The workforce of the future has significant implications for everyone. For employees, planning out a 50-year career is almost impossible. For employers, their traditional approach to attract, develop, and retain workers has been shaken. The focus now is accessing and establishing flexible work engagements around specific projects. Deloitte's insights, summarized below, are eye-opening and portend potentially significant societal impact.

What is work?
Deloitte notes that technological advances have long impacted the nature of work in the Western world. The chart below shows the evolution across three eras.

Source: Deloitte Insights

In today's postindustrial era, robots and automated systems are replacing some jobs. Yet workers need not fear: their relational skills and insights can't be replaced by technology — and, in fact, enhance the value offered by technology. For example, online juggernaut Amazon opened a tech hub in Houston in July 2019. As the name implies, the hub will use technology, but it will also create 150 jobs, per a recent InnovationMap article. This is just one example illustrating that work now focuses on the ability to capture value from technology, solve problems, and manage human relationships.

Who is working?
The relationship between employers and employees will likely never be the same. Per Deloitte Insights, "[o]rganizations now have a broad continuum of options for finding workers, from hiring traditional full-time employees to availing themselves of managed services and outsourcing, independent contractors, gig workers, and crowdsourcing." This means companies should be adept at recruiting, engaging, and retaining workers in new types of relationships.

Workers in Houston are wading into the new model. In a study profiled in a recent CultureMap article, "Houston ranked second statewide and 11th in the U.S. among major metro areas for the size of the skilled-freelancer workforce per revenue produced." The relationship between workers and their jobs is shifting from long-term employment to project engagement.

Where are people working?
One thing is clear: workers are spending less face time with work colleagues. More and more work is being accomplished from home or coworking spaces. Many workers appreciate the flexibility of working remotely; companies can benefit from reduced overhead.

Houston is experiencing huge growth in the number of coworking spaces. The Cannon Houston moved into its new 120,000 square foot building in July 2019, and WeWork is planning to open another location, which will be its fourth in Houston and second in downtown Houston. These spaces offer not just desks and offices, but a variety of events and programming designed to foster community.

The new frontier
Deloitte notes that the full impact of these changes may just be starting — and the future of work is not a "foregone conclusion." We can allow technology to merely "drive more efficiency and cost reduction, or we can consider more deeply the ways to harness these trends and increase value and meaning across the board — for businesses, customers, and workers." Deloitte urges organizations to "zoom out and imagine the possibilities" to create positive outcomes for work, the workforce, and the workplace. As Deloitte sums it up: "[p]urpose will bring the future into focus."

---

Technology should enhance your quality of life. Art Wager/Getty Images

Deloitte's smart vision for Houston

Ready for an Upgrade

Cities across the country are in a race to get smart. Imagine a city where infrastructure and citizens are all interconnected by new technologies. Information about traffic, parking, energy use, city services, flooding, and much more is shared widely in open technology platforms. The possibilities are exciting: Smart Cities will collect and disseminate data in ways that should enhance quality of life, sustainability, and economic growth.

Indeed, a sea change is underway. In the past, the workings of a city were managed by the few — i.e., city planners and government officials. Looking ahead, new technology platforms are now enabling the many — i.e., corporations, nonprofits, and individuals — to share data in real time and significantly influence the workings of the city. It is a new era: the crowdsourcing of data coupled with ubiquitous access to useful information. Very smart.

What is a Smart City?
Deloitte, a leading voice in the development of Smart Cities, notes an evolution is underway. In a recent article, "Forces of Change: Smart Cities," Deloitte defines a Smart City 1.0 as "physical assets networked via sensor technology that generate streams of valuable data from 'smart' parking meters, streetlights, and even trash receptacles." But that's just the start. A Smart City 2.0 builds on the interconnection of the city's physical infrastructure, and adds people into the equation: residents, government and business employees, and visitors (see Deloitte's framework for Smart Cities below). Per Deloitte's article, "Smart City 2.0 focuses on enhancing the citizen experience by operating at the intersection of the 3Ds: data, digital, and human-centered design." The opportunity: leverage the collective knowledge of entire communities.

Houston getting smart
Houston is laser-focused on capturing this opportunity. Last March, Mayor Sylvester Turner announced the launch of the Smart City Advisory Council. Amy Chronis, managing partner of Deloitte's Houston office and the chair of the Greater Houston Partnership's (GHP's) Sustainability Advisory Committee, facilitated a workshop with city leaders. Per a GHP article, "the advisory council is charged with engaging community stakeholders, governments, academia and industry to develop a roadmap that will speed the adoption of technology and data-driven practices in the public realm."

Houston's Smart City initiative divides projects into a portfolio of opportunities: transportation, public safety, resiliency and sustainability, and engagement. The scope spans areas such as traffic, security, community life, and flooding. For example, the expanded Houston Intelligent Transportation System (HITS), a network of digital traffic signs, cameras, and more, will "monitor and manage traffic in real-time, improving public transit speed, information sharing and overall reliability." Flood detection sensors and roadway flood warning systems will gather and transmit flood-related data. With increased information, we should experience far fewer surprises on the road.

To move from a Smart City 1.0 to a Smart City 2.0, Houston is tapping into input from a wide swath of the population. In partnership with Microsoft, Houston is using a program "which scrapes data from the internet and social media to recognize trending topics and how they impact citizens' views toward the city" — just one example of giving a new voice to citizens. Also, a 311 chatbot allows citizens to seek city information or request services, while 311 prediction enables the city to better forecast needs and allocate resources smartly. We are headed toward more empowered citizens and a far more responsive city government.

For Houston, the opportunity is particularly large. With a diverse population and large geographic sprawl, Houston is poised to benefit greatly from increased interconnectedness. The city can get more ideas from diverse sources to solve issues, businesses can make smarter investments, residents will secure more ownership of their communities, and visitors will be more well-equipped to enjoy their experiences here. City leadership has grasped the vision. As Mayor Turner stated in a May 2018 address: "We must leap, not stroll into the future. We must sprint, not jog. It will be this city that will be the Smart City of the world."

Graphic courtesy of Deloitte

---

Ad Placement 300x100

Ad Placement 300x600

CultureMap Emails are Awesome

Property Showcase

4 Houston innovators join prestigious group of inventors as senior members

top honor

Houston is home to four new senior members of the National Academy of Inventors.

To be eligible to be an NAI Senior Member, candidates must be active faculty, scientists and administrators from NAI member institutions that have demonstrated innovation and produced technologies that have “brought, or aspire to bring, real impact on the welfare of society,” according to the NAI. The members have also succeeded in patents, licensing and commercialization, and educating and mentoring.

The University of Houston announced that three professors were selected to join the prestigious NAI list of senior members. UH now has 39 faculty members on the NAI list.

“We congratulate these three esteemed colleagues on being named NAI Senior Members,” Ramanan Krishnamoorti, vice president for energy and innovation at UH, said in a news release. “This recognition is a testament to their dedication, research excellence and pursuit of real-world impact by knowledge and technologies. Their achievements continue to elevate the University as a leader in innovation and entrepreneurship.”

UH’s new senior members include:

Birol Dindoruk, the American Association of Drilling Engineers Endowed Professor of Petroleum Engineering and Chemical and Biomolecular Engineering at the Cullen College of Engineering. He is known for his research in carbon capture and storage, fluid-rock interactions and hydrogen storage. He holds three patents.
Megan Robertson, the Neal R. Amundson professor of chemical and biomolecular engineering at UH’s Cullen College of Engineering. She is developing new polymers and groundbreaking strategies for recycling and reusing plastics. Robertson currently has three patents and two more patent applications pending.
Francisco Robles Hernandez, a professor of mechanical engineering technology at the UH College of Technology. He holds four patents, and several others are under review. His work focuses on carbon materials, including pioneering work with graphene and designs with steel and aluminum used in automotives and railroads.

“As an inventor, this is one of the highest honors you can be awarded, so I am very proud to receive it,” Robles Hernandez said in a news release. “UH has been instrumental in supporting my research and innovation efforts, but it’s the creativity of the students here that makes it successful.”

Allison Post, associate director of electrophysiology research and innovations and manager of innovation partnerships at the Texas Heart Institute at Baylor College of Medicine, also made the list.

Post was recognized for her work in biomedical engineering and commitment to advancing cardiovascular care through innovations. Post is the youngest member to be inducted this year.

Other notable Texas honorees include Emma Fan from the University of Texas, Arum Han from Texas A&M and Panos Shiakolas at UT Arlington.

In 2024, Edward Ratner, a computer information systems lecturer in the Department of Information Science Technology at the University of Houston’s Cullen College of Engineering, and Omid Veiseh, a bioengineer at Rice University and director of the Biotech Launch Pad, were named NAI fellows.

The Senior Member Induction Ceremony will honor the 2025 class at NAI’s Annual Conference June 23-26 in Atlanta, Georgia.

Plans revealed for $2 billion expansion of Houston convention district

coming soon

Mayor John Whitmire and Houston First Corporation shared a new master plan for the George R. Brown Convention Center and its surrounding area last week. The plan features expanded exhibition space, a living roof, a pedestrian plaza with access to Toyota Center and more.

The project will be funded by the state’s portion of incremental Hotel Occupancy Tax revenue growth within a three-mile radius of the GRB for 30 years, which is estimated to total about $2 billion, according to a release from Houston First.

The first phase of the project, which is slated to be completed by 2028, will focus on developing a 700,000-square-foot convention facility known as GRB South.

GRB South will feature:

Two exhibition halls, totaling 150,000 square feet
A 50,000-square-foot multipurpose hall that opens to the new Central Plaza
The 100,000-square-foot Central Plaza, an extension of the Avenida Plaza that will connect to Discovery Green and Toyota Center
Atrium flex hall totaling 25,000 square feet
225,000 square feet of contiguous exhibit space
A 60,000-80,000-square-foot ballroom
Ground-level spaces for retail and restaurants
A central atrium, providing each level with natural light

The design of the space is inspired by the Houston area's native prairies and will use low-carbon materials, high-efficiency building systems with rainwater collection and water-reduction strategies. A living roof on top of the GRB South will also have the potential for solar integration.

"It is imperative for us to stay competitive and meet the needs of our meetings and convention customers,” Michael Heckman, president and CEO of Houston First, said in the release. “This project will not only accomplish that but will establish a gathering space that will be the epicenter for entertainment, sports, and city-wide events, accentuating our ability to capitalize on Houston's unique offerings.”

The full campus renovation is expected to wrap in 2038, and construction will be managed in phases. Houston First reports that construction should not impact events currently scheduled as GRB.

“This project is truly transformative for downtown Houston, a lasting legacy that will solidify our position as a top-tier convention and entertainment destination,” Mayor John Whitmire said in the release. “Most importantly, we are creating a space that will build community, foster connection, and shape the future of Houston.”

Explore renderings of the plans below.

Rendering courtesy Houston First.

Tech company floats plan for futuristic shipyard on Texas Gulf Coast

Anchors Away

Armed with $600 million in fresh funding, Austin-based Saronic Technologies has set its sights on building a shipyard for producing remotely operated military vessels — and the futuristic shipyard could be located along the Texas Gulf Coast.

The shipyard, dubbed Port Alpha, would manufacture unstaffed midsize and large Navy ships known as “maritime drones.” Defense Newsreported that Texas — with the Gulf Coast being a prime target — is among the places under consideration for the shipyard. A timeline for construction of the shipyard hasn’t been set, and a cost estimate for the project hasn’t been revealed.

“A core principle of Saronic is that we design our vessels for autonomy from the keel up,” Saronic co-founder and CEO Dino Mavrookas, a former Navy SEAL, says in a news release. “We will take the same approach with Port Alpha, designing a shipyard from the ground up to produce at a speed and scale not seen since World War II.”

Saronic says Port Alpha would boost the U.S. shipbuilding industry, which is practically nonexistent. Consulting giant McKinsey & Co. reported in 2024 that the U.S. has gone from building about 5 percent of the world’s ocean-going ships in the 1970s to about 0.2 percent today. China, Japan, and South Korea now dominate global shipbuilding.

“The last years have seen a degradation in the capacity for the United States to build ships and to manufacture core needs of the country. I am excited to back Saronic and its focus on revitalizing shipbuilding in America, while also building products to defend those interests,” says investor and tech entrepreneur Elad Gil, who led the $600 million funding round.

The $600 million round, announced February 18, pushes the value of Saronic to $4 billion. Investors in Saronic, founded in 2022, include Gil, General Catalyst, a16z, Caffeinated Capital, and 8VC.

Last year, Saronic raised $175 million from investors, lifting the company’s value to $1 billion. In 2023, the startup collected $55 million from investors.

In the past three years, Saronic has focused on manufacturing three small remotely controlled vessels, or “maritime drones,” for the Navy: the six-foot-long Spyglass, 14-foot-long Cutlass, and 24-foot-long Corsair. Port Alpha would specialize in much bigger remotely controlled ships for the Navy. The Navy has expressed interest in assembling a modern fleet that combines staffed and unstaffed vessels.

Saronic’s nearly 420,000-square-foot factory in Austin manufactures the Spyglass, Cutlass and Corsair boats.

“The velocity and economics of warfare have fundamentally evolved, and several of our own team have witnessed firsthand how unmanned systems became true force multipliers in Afghanistan and in other theaters of conflict,” says Paul Kwan, managing director of General Catalyst.

---

This story originally was published on our sister site CultureMap Austin.

View All Listings

INNOVATIONMAP EMAILS ARE AWESOME