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About the Isle of Man - The Economy
The Isle of Man economy is currently in its 26th consecutive
year of growth and both Standard and Poors and Moody’s awarded
the Isle of Man a Triple “A” rating. The period since
the mid-90’s witnessed a particularly impressive economic
performance with real growth averaging almost 10% p.a. between 1997
and 2002. Although the rate of growth has slowed over the last 4
years it is estimated that the economy was expanding at something
around 8% p.a. prior to the onset of the global financial crisis.
The key sectors in generating this performance have been financial
services (this sector has grown by around two-thirds in the last
six years) and professional services (growth of 50%). Banking generates
typically around one quarter of the Island’s gross domestic
product, with the rest of the finance industry adding another 15
to 20%. In the last few
years new economic activities have been developed, such as with aircraft registration
and most significantly, e-gaming and other areas of e-commerce.
One consequence of the economy’s performance has been an ongoing
strengthening of public finances. Over the last 8 years alone Treasury’s receipts have more than doubled
to stand at over £0.6bn in 2008/2009.
An important element of the Island’s fiscal strength is the
long established and self imposed legislative requirement that Government
must budget for a surplus in respect of its annual revenue spending.
Whilst meeting this requirement Government has continued to invest
in developing and updating the Island’s infrastructure, for
economic as well as social benefit.
The Island’s unemployment rate has been below 1½% (of an economically active
population of 41,000) for nearly a decade but since the autumn of 2008 has risen to stand
at 2.3% (February 2010). But labour market conditions for employers are considerably
eased through the freedom to recruit and transfer personnel from off-Island. Although the
Island operates a work permit system, it does so liberally, as evidenced in the information
that shows around 11,000 permits being granted annually and refusals running at below
100 a year. The ability to bring in labour from outside is a key factor in constraining wage
pressures.
Increases in mortgage rates and energy prices conspired to push retail price inflation
on the Island to over 6% in 2008, but with the falls in these same items the current rate
(February 2010) is 4.8%. Expectations are for the rate to remain very low in the short
term in the low interest rate environment and with commodities prices now relatively
subdued. The combination of full employment, low mortgage rates, rising disposable
incomes and an expanding population has supported local house prices over the last
year but prevailing wider economic conditions and some restrictions evident in local
credit availability may well see a reversal of house price trends over the course of 2010.
The Isle of Man has world-class telecommunications infrastructure and services which
cater for the full range of modern corporate voice and data communications requirements.
Manx Telecom, a wholly owned subsidiary of 02plc, part of the Telefonica group, a leading
pan-European telecommunications company is the Island’s principal network operator
operating advanced fixed and mobile networks across the Island. Both Manx Telecom
and Cable & Wireless provide services under telecommunications licenses granted by
the Isle of Man Communications Commission and approved by Tynwald and a number of
ISPs and IT companies provide corporate network and related services.
Manx Telecom has invested in excess of £50 million in infrastructure during the last five
years and is committed to a further £30 million in the next three year provide additional
capacity and new services in line with market requirements. As a result of this investment,
the Island now has 100% ADSL broadband availability to both households and business
premises. The company is credited with Europe’s first all digital fixed network and the
first commercial 3G mobile trial outside Japan. In November 2005, it became the world’s
first company to offer a HSDPA (3.5G) service. 2008 will see the launch of NGN (Next
Generation Network), the first of its kind in the world. At a cost of £25 million, this will bring
the Island all the benefits of fully converged telecommunications and entertainment.
Connectivity off the Island is provided by two resilient fibre optic rings, owned respectively
by BT and Cable & Wireless, which connect the Island with the North of England
and Northern Ireland. These links employ `self-healing SDH loop` technology which
guarantees that if a fault occurs at any part of the link, voice and data traffic is seamlessly
re-routed in the other direction. Their total available capacity is 3 million channels (240
Gigabytes) which, with a current capacity utilisation of less than 0.2% on the main cable
alone, represents huge potential for the future. In addition, the Manx Government owns
a third undersea cable connecting the Island with the North of England and is currently
evaluating commercial and technical options for activating this capacity to support Island
businesses.
The Isle of Man was one of the first countries to pass dedicated
e-business legislation with the introduction of the Electronic Transactions
Act in November 2000. Additional business continuity regulations
introduced in 2002 enable banks, investment businesses and corporate
service providers which are regulated in approved jurisdictions
to use Isle of Man based computer servers in the event of catastrophic
failure.
The Island’s strong position in financial services and e-business
make it the perfect location for companies in the business of electronic
trading platform development.
The Island also has a sophisticated internet hosting infrastructure.
There is a choice of service providers whose range of services include
hosting, managed services, internet security services, connectivity
and consultancy. Web hosting business solutions are offered to businesses
of all sizes.
The Isle of Man telecommunications and IT infrastructure may be
summarised as follows:
- Resilient high capacity fibre optic cables connecting the Island
to the North of England and Northern Ireland
- State of the art business continuity/disaster recovery facilities
widely available
- Part of the UK numbering range
- Direct dialling to 99% of numbers globally
- High internet and ADSL penetration
- Island wide mobile data (GPRS)
- Quality of service to world standards
- High quality web hosting/co-location
- 100% broadband availability
- Free broadband connections for all households and businesses
- Short lead times for telephone and broadband installation
- Higher speed connectivity for business available via extensive
Island wide fibre and radio networks
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