The Future is bright – The future is e-business!

In 2004, Government undertook an exercise to project how the Isle of Man economy would look, 10 years ahead in 2014. The exercise was called “2014 – the can do economy”. Basically this exercise looked at how the existing sectors of the Isle of Man economy would change over the next ten years looking at worst, average and best scenarios. The exercise also attempted to identify brand new sectors which could emerge during the next 10 years. Perhaps not surprisingly, e-business was identified as one of the sectors with the most growth potential. In fact, the 2014 report concluded that the e-business sector is “…likely to witness significant growth ( by 2014 ) to become potentially the second largest sector behind banking.” It also states that e-Business “…offers the greatest potential for the future” and that GDP growth within the sector is anticipated to increase “five – fold.”.

A recent review of the 2014 assumptions has revealed that the growth in e-business development is already running significantly ahead of projections.So why is the Isle of Man so attractive to e-business development? The simple answer is that there is no single unique selling point (USP), but rather a collection of benefits which together offer a very attractive proposition to new businesses.

All businesses are interested in saving money. With its 0% corporate tax rate, the Isle of Man has to be an attractive option for the location of corporate headquarters. If the company is privately owned and the owners themselves take up residence, they can benefit from the Island’s personal standard income tax rate of just 10%. In addition, if their personal income is significant, they can take advantage of the personal income tax cap which is set at £100,000.

Any e-business needs good quality telecommunications and data hosting facilities. This is another area where the Isle of Man scores highly. Manx Telecom, the Island’s main telco provider has invested over £50 million over the last five years alone. The isle of Man was one of the first jurisdictions in Europe to have ADSL, it was the second in the world to have 3G and was the first in the world to have HSDPA, “super fast” 3.5G. Cable and Wireless are also now licensed on the island and are also making significant investments in infrastructure. Resilience and capacity are also very important. The Island can boast two self healing SDH fibre rings and the main cable serving the Island has 1.2 terra bits capacity but is currently just 0.02% utilised. The Isle of Man is also very well served by state of the art data hosting facilities. There have been a number of major multi-million pound developments undertaken or recently announced by Manx Telecom, Domicilium, Netcetera and Continent 8 which will ensure that the island has the capacity to cope with the expected growth in this area.

The isle of Man Government itself remains totally committed to developing its e-business sector. Some 6 – 7 years ago, a number of jurisdictions jumped on the band wagon and announced their commitment to developing their e-business sectors. Specific individuals were appointed to lead the development, but in most cases, those resources have since been withdrawn. This is not the case in the Isle of Man. Working together in a joined up way for the benefit of the sector, the Treasury and Department of Trade and Industry offer assistance to both new and existing e-businesses to ensure that they have the ability to flourish both now and into the future.

Political stability and international reputation are also important. The Isle of Man has one of the oldest parliamentary democracies in the world, formed back in 979. Tynwald, the Island’s parliament is mainly made up of independents which helps to ensure that there are no major shifts in policy after a general election, which are held every 5 years. The Isle of Man has been awarded a AAA credit rating by Standard & Poors and has received endorsements from a number of international bodies such as the OECD, the FATF and the IMF, following reviews of the Island’s regulatory and tax structures. The Isle of Man is a Crown Dependency of the UK but is not a member of the EU, although under the UK treaty of accession, the Isle of Man does have rights of access to the EU for agricultural and manufactured goods.

Professional services on the island are also able to offer significant added benefit to new e-businesses. As you would expect from an international finance centre, the legal and accountancy professions are able to offer a wide range of services tailored to the needs of modern day business. Of particular significance in recent years has been the growth in the use of the Isle of Man as a location for launching floatations on the Alternative Investment Market (AIM).

Sometimes forgotten, but nearly always significant is the quality of life that the Isle of Man can offer to those involved in relocating their businesses. A poll my MORI concluded that 93% of residents were either satisfied or very satisfied with IOM as a place to live and 70% were either satisfied or very satisfied with the way Government runs the Isle of Man. These satisfaction results were amongst the highest that MORI had ever come across in conducting quality of life surveys.

The Isle of Man has seen significant success in recent years in developing a vibrant and successful e-business, e-gaming sub-sector. The Island is now home to some of the largest and most successful operators in this area including Poker Stars, Microgaming, Play Tech and NETeller. The Government is keen to built on the success of this sub-sector by encouraging the development of other areas of e-business such as e-downloads, e-travel, e-money and to exploit the potential involved in developing the Island as a centre for intellectual property (IP).

For the first time in the Island’s history, the fact that we are an Island ceases to become a factor. Increasingly we are seeing e-businesses structuring themselves in a way to optimise the location of the component parts of their business. Quite often you will see fulfilment in one country, software development in another, call centres in a different country and the headquarters and file servers in a different location. The Isle of Man is seeking to establish itself at the top of this food chain with the quality, high end elements such at the HQ and data hosting which brings real added value and good quality jobs.

In conclusion therefore, the projections of 2014 are ahead of target and the future looks bright!