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 new sectors which could emerge.

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 stated that e-business “…offers the greatest potential for the future” and that GDP growth within the sector is anticipated to increase “five–fold”.  

In the latest survey commissioned by the Treasury from PKF (Isle of Man) LLC, financial data was obtained from a sample of 14 substantial companies covering a range of activities from software development, telecommunications, data hosting and e-gaming. Data obtained in relation to 2007 was compared with data supplied by participating companies in respect of 2008.

Results from the survey showed significant growth in a number of areas:

• gross turnover of the companies surveyed rose by nearly 36% from ?454m to ?758m

• the number of staff employed by the respondent companies in the sector rose by 23% from 690 to 848, and increased by 14% for like-for-like companies who were operating in the sector in both years

• total annual wages paid rose by 37% from ?30m to over ?41m, which means that the average annual salary in this sector is ?48,800. The like-for-like comparison showed an 18% increase

• ITIP and National Insurance Contributions rose by over 44% from ?7m to ?10m. The like-for-like comparison showed a 21% increase.

The e-gaming sector is continuing to grow, with the number of licence holders now standing at 20. This number should increase significantly in the next 3 to 6 months as a further five applications have been approved by the Gambling Supervision Commission (GSC) and are due to go live in the next few months. Also, four applications are currently with the GSC and awaiting hearings in April and May. A further 20 companies have committed to preparing an application and discussions are continuing with many more. 

The Isle of Man is now starting to realise the benefits of the last two years’ work in re-branding and re-positioning itself as a well regulated jurisdiction and one that companies can to do business with in the gaming sector. 

In January new regulations to exclude certain functions (for example promotion and management) from requiring a licence were approved, and efforts are underway to leverage additional business off these. The focus is on bringing business to the Island that will create jobs. In the case of many large businesses, obtaining a proportion of the business, however small, to grow later is proving to be a successful strategy.

Another area of focus is to try and get into company boardrooms and present the case for the Isle of Man directly. The first of these presentations has occurred.  

The Isle of Man stand at the International iGaming Exhibition (IGE – previously known as ICE) in January was the busiest ever with recorded visitor numbers to the stand of 243.  Around 80 of these were gaming operators but many other useful contacts were also made.  Eleven private sector companies supported and contributed towards the DTI stand.  Much of the success of the exhibit this year was attributable to the stand staff training which was offered to all attendees prior to the show.  This was organised by the DTI in conjunction with our current stand contractor and the intention is to insist on all stand personnel having this training in future as it increased everyone’s effectiveness and made for a more cohesive approach.

In order to move forward with the strategy to consolidate the Island’s position as the premiere jurisdiction for European facing Asian businesses the DTI took a small booth in partnership with a local CSP and a datacentre at the iGaming Asia Congress which was held in Macau in February.  A number of other local companies also attended the conference.

One company has already commenced preparing their application and a large Asian based group is looking at basing some non-licensable activity on the Island.   Whilst the conference was of benefit Asian businesses are very private and it is clear that developing business from this region is going to require connections and better links to be made in the area.

In relation to the South American market, advice on the trade, legal and practical implications of doing businesses with these countries is being obtained from a local legal/CSP business.

The sheer volume of success generated through the conferences and work done to persuade consultants and lawyers that their clients should consider the Isle of Man has generated a great deal of work and this has slowed the progress of other projects.

Clean Tech is a new sector with great potential for growth now targeted for inward investment.  A clean tech forum has been established which contains representatives from eight diverse existing business sectors on the Island.  The Isle of Man had an exhibition stand at the recent Rushlight Clean Tech Awards in London which attracted significant interest from clean tech investors and businesses.  Two clean tech businesses have recently been established on the Island.  

The Isle of Man had an exhibition stand at the recent UK Crown Estate Offshore Wind Power Supply Chain event in Liverpool.  Significant offshore wind farm supply chain opportunities exist for the Island.  Centrica, the UK round 3 offshore wind farm developer in the Irish Sea, has recently used Douglas harbour for its site survey vessel and further discussions with Centrica confirm the geographical suitability of the Island to meet supply chain opportunities.  

The forecast for the year ahead is for continued strong growth from the established e-gaming businesses based on the Island and new growth from a number of recently licensed well-funded start ups.  

The next significant promotional events which will be attended along with the private sector are e-Gaming Review Live in London in June 2010 and the European Internet Gaming Conference in Copenhagen in October 2010.