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About the Isle of Man - The Economy
The Isle of Man economy is currently in its twenty first 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 three
years it is estimated that the economy is still expanding at something
around 5% p.a. in real terms.
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%.
One consequence of the economy’s performance has been an ongoing
strengthening of public finances. Over the last six years alone
Treasury’s receipts have increased from £300 million
to over £475 million.
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 40,000) for over six years.
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 13,000 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.
Although increases in mortgage rates and energy prices conspired
to push retail price inflation on the Island to over 6% in late
2004, expectations are for the rate to head back towards 4% over
the course of 2005, a level that had previously not been exceeded
for over eleven years.
The combination of low mortgage rates, rising disposable incomes
and an expanding population has resulted in increases in local house
prices, but at 8% over the last twelve months the current rate of
increase is not inconsistent with that being reported for the British
Isles as a whole. Reduced level of inward migration and increased
housing supply on the Island are likely to contain increases to
single digits in 2005.
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 mmO2, 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 to 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. It is now investing in what is expected to
be Europe’s first HSDPA (“3.5G”) mobile network.
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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