Isle of Man’s digital dreams

For business leaders on the Isle of Man, the current mantra is one of diversification. Although financial services remain one of the bastions of the system, along with a reviving tourist industry, the digital economy is expected to take over during the next three or four years and how the two interact will be crucial to the future of the tiny windswept island in the Irish Sea.

“If you look at innovation around fintech, we are ideally positioned in this area, as we already have all the expertise around financial services,” says Mark Lewin, chief executive officer of the island’s Department for Enterprise.

With an unemployment rate of 0.9 per cent, the island enjoys the enviable position of having “more jobs than people,” he says, promising to reform the work permit system in order to make it easier for visitors to secure employment.

“We are actively trying to grow economically,” he says, forecasting that the current population of 85,000 can comfortably grow to at least 100,000 without putting any noticeable strain on island resources. New housing estates are being constructed and tracts of land are being freed up for development. The island’s infrastructure, hospitals and schools are still operating “under capacity”, he believes.

Insurance, particularly on the life side, remains the largest sector and is still experiencing healthy premium growth. The island is home to 12 life insurance companies.

Yet as a Crown Dependency, linked to the UK for defence purposes and international treaties, the Isle of Man will suffer from a key disadvantage as Brexit day looms. “We will be outside the passporting regime for financial products, as we are a ‘third country’ in terms of financial services,” laments Mr Lewin. 

But he also believes many firms will use the occasion of Brexit not only to secure their status for marketing products, but also to examine their operational advantages, to make sure they are based in hubs of financial expertise attracting lower costs, and this is where he believes his territory can triumph.

“From the admin perspective, we have a capable workforce, with lower operating costs, and we are actively seeking to further grow our population, so we are really focused on the skills side,” he says.

What is more, Brexit can also provide a further distribution channel for the island, not out of, but into the lucrative UK market.

“Firms with a European presence want to protect themselves when it comes to entry into the UK,” he suggests. “The Isle of Man is a well-regulated hub for them, and very much part of the financial ecosystem.”