Independent research comissioned by the E-Business division of the Treasury has predicted that e-business could become the second largest sector after banking by 2014.
The research was undertaken on behalf of the Division by PKF (Isle of Man) LLC.
In 2004, Government undertook an exercise to project how the Isle of Man economy would look in ten years' time. '2014 - The Can-Do Economy' looked at how the existing sectors of the Isle of Man economy would fare over the course of the decade.
The exercise also attempted to identify brand new sectors which could emerge during the period and e-business emerged as one of the sectors with the most growth potential.
The 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.
Sector performance data such as this is vitally important for economic planning purposes so that Government can assess relative sector performances and then prioritise future resource allocation to where the best returns in terms of job and wealth creation can be obtained.
In the survey, 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 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.
Commenting upon the results, Alex Downie MLC, Treasury Member with delegated Ministerial responsibility for e-business said, "the growth in e-business during the period clearly demonstrated the growing importance of this sector to the economy in terms of wealth generated, jobs created and exchequer benefit".
Director of E-Business Tim Craine said, "These figures help to demonstrate the success of Government’s policy of economic diversification.
"Government took the strategic decision to develop the e-business sector back in 2000 and the benefits of this policy initiative have now been clearly demonstrated.
Managing director of PKF, Phillip Dearden said, "The research results demonstrate a high growth rate over the two year period. The sector is making an increasing contribution to the Island’s economy.
"As well as the sector making a significant contribution to the Treasury there are a good number of high earners who benefit the economy as a result of their high disposable income.
"If the sector were to continue to grow at anything like these rates it would become a highly significant part of the Isle of Man economy."
