In the previous article, written as an introduction to the Isle of Man Government’s launch of a new, unified approach to marketing, I considered some of those issues confronting the Eurozone and the United Kingdom. Both have significant impact on the Isle of Man’s economy yet in neither could I detect a convincing narrative suggesting that there exists a credible strategy to generate growth, an essential requirement if the economic, political and social problems are to be resolved. This article considers the Isle of Man’s position in the light of this economic environment.
Several decades of robust economic growth have enabled the Isle of Man to provide a modern infrastructure, good public services, generous benefits and at the same time a healthy level of Government reserves. Consequently, the Island is in a relatively strong position; the Isle of Man is not encumbered with the deficits confronting our neighbouring countries and has low unemployment with economic growth still over 2% pa.
The legacy of enduring financial success is a two-edged sword; while it has left us in a strong financial position it is difficult to change attitudes and aspirations; the Chief Minister fears that many are in denial of the difficulties ahead and he recognises that a key task is to ensure that people are made aware of the extent of the problems.
The Island’s ageing population and financial constraints will make it impossible to sustain the current generous levels of benefits so there will need to be a difficult period of adjustment. Demographic forecasts to 2026 show the overall population rising by 14% yet 65+ are projected to increase by 59% and 75+ by 63%.
Receipts from VAT by 2015 are expected to be £214 million per annum less than previously expected because of changes to the Customs and Excise Agreement .
Since its peak in 2008, there is clear evidence of continuing reductions in the Island’s finance sector, for many years the engine of Manx economic growth. Further contraction of the sector is likely so it is vital that other sources of business are developed.
Wages, housing and other costs are high on the Isle of Man compared with elsewhere so it will be necessary both to sustain high levels of growth and to provide employment for those with few skills. It may be necessary to change policy and in future to encourage large-scale, low skill activities to locate to the Island.
A glance at the economic development strategies of competitor countries shows there is little to distinguish between them. Economic growth is not generated by regulators or bureaucrats, no matter how proficient; it needs enthusiastic people with energy and initiative. The Isle of Man intends to ensure that entrepreneurs view the Island as a great place to do business and DED’s strap line, "Isle of Man really is where you can" is a good summary of that aim.
The economic diversification of the Isle of Man, ample room to expand, excellent quality of life (according to a MORI survey), high personal security and the Island’s position outside the Euro are import factors in setting the Island apart from the rest. Good marketing must reflect the underlying product and the Isle of Man Government has re-designed the marketing package to reflect the Manx economy of the future.
Studies show that success depends more on EQ than IQ and it is a fact that many of the key economic sectors have been brought to the Island by individuals and developed by their networks and followers. As they say, “People sell to people” and the need to have individuals with great inter-personal skills to implement our strategies and use the marketing tools effectively should always be remembered. The Isle of Man has a great opportunity to survive the economic storms with these elements in place.