Island’s model isn’t working
June 30, 2014
The old days of the gold rush, then the oil rush then the railway, then the bank rush, all provided intriguing wild, wild, west stories. Raw desire, naked ambition to become rich became the subtext to many movies. Underneath, however, is a fundamental economic principle that underwrites the realities of the free market economy.
Pioneers, emerging markets, and vision connect to fulfil an anticipated need and area of growth. Often it is a case of individuals fleeing poverty, or at the very least fleeing the reality that opportunity is not available where they live and only even then, a big if, only possibly in adventures far away from the comfort zone of home.
History also seems to indicate a pattern that favours migration as party to success. Some ventures have visual predictability, like the 19th century gold rush which saw hundreds of thousands head to the west by land and sea, after gold nuggets were discovered lying on the ground in California. Not all became rich but many did and the process spurred other industries and technology took a jump as they produced means of extraction.
This, I believe, is our situation in Bermuda. Marooned on an island depending on business to be attracted to our shores isn't working. Flyers and ads aren't pulling the business. IB is doing what it will do and possibly all it can in present day terms. If you can't catch enough fishing off the rocks it just makes sense getting in a boat and going out to sea where the fish are.
Our next big dollar exists where the dollar can expand in multiples. Burgeoning companies here that can do a $1 million contract in Bermuda can find a $60 million project in Africa and have in-exhaustive future prospects.
The global facts for 2014 is that Africa is rated number two, right behind North America, as the place for the best returns.
In the years at the beginning of IB, I recall persons like Arnold Francis trying to get government to deploy a special group to act as lobbyists in places like Hong Kong to attract local business. His idea was trashed by government because the big business lobby in Bermuda felt it was an embarrassment to have government soliciting, and it would be best handled by private business entities. We all know where that led us, a few well-padded companies who could afford to invest in lobbyists and overseas offices grabbed all the business and persons like Arnold Francis could not match what those companies got as new business per month.
The same subtle arrogance exists today. As a result, under our current mode of operation, only the backflow and exhaust from the emerging economies around the world will reach our shores.
Our current business model is as a non-invasive scavenger seeking derivatives from live industries. As it stands we will wait for 20 or 30 years to pick up the residual after visionary companies and people have ventured and taken up strong positions with the opportunities currently available directly in the African market.
Emerging economies offer both black and white populations of Bermuda a huge opportunity, but bigotry on one hand and blindness on the other prevents both.