It becomes a vicious cycle. Oil prices drop for an extended season. Oil and gas operators cut budgets and lean on suppliers to contain costs. According to PWC’s global team of strategists, operator capital spend on the exploration sector alone has dropped 26% since 2014. With operator cutbacks, the cost of R&D is increasingly shifting to suppliers who are already faced with tight margins, and oilfield workforce reductions worldwide reached over 258,000 by early 2016.
Progressive suppliers can break this cycle by investing in an ‘Innovation Ecosystem’ during the down times. Though counter-intuitive to some, this approach applied methodically and with discipline can lead adaptors to emerge from a constrained economy fully intact and able to:
- Promote and deliver industry-wide innovation
- Surround their customers with the necessary expertise to embrace the upturn
- Build a foundation for long-term industry health
At Paradigm, we have built our Innovation Ecosystem around what we call the “3 P’s for Sustainability.” We are opting to invest in our Platform by continually upgrading towards open interoperability that drives collaborative and accelerated innovation. We are forging Partnerships to develop and commercialize new industry capabilities and delivery options. And we are focusing on the quality of our People, both within Paradigm and through our extended network, to hone our technical expertise and grow our services footprint.
In short, we believe that by creating this extended ecosystem – Partners and People enabled by a world-class Platform – we are creating a hub not just for driving innovation, but leveraging the broad expertise in the industry to develop capabilities that are rapidly adopted by customers to generate tangible results.
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