After early successes with e-gaming and fintech, the Isle of Man is fast becoming an attractive destination for digital businesses
The Isle of Man, a British Crown dependency located in the Irish Sea between England and Ireland, has a population of just over 85,000 and a land mass approximately equivalent to that located inside the M25.
In terms of technology clusters it’s certainly not the first location that would come to mind but, whilst the likes of Silicon Valley and Tech City in London have attracted the vast majority of investment, the Isle of Man has been busy quietly building its own tech ecosystem.
In the early 2000’s, the local government started the process of diversifying the island into digital business, with an initial focus on e-gaming and online gambling. Whilst perhaps being something of a controversial choice, e-gaming was chosen because it had “the greatest prospect of increasing the number of jobs and revenue on the island.”
As Brian Donegan from the Isle of Man Government Department of Economic Development (DED) explained to Silicon, by focusing on the premium end of the market and introducing regulations “built from the ground up,” the island was able to protect its reputation and create a regulatory quality that has become widely recognised within the e-gaming community.
This method ultimately proved successful, as industry heavyweights such as Poker Stars and Micro Gaming have since relocated to the island. “Over the last several years that has developed into a very successful cluster of e-gaming operators on the Isle of Man,” Donegan said. “Currently they are responsible for just under 20 percent of GDP, so a very significant contribution to the economy.”
And this success is now having the knock-on effect of enticing other industries into establishing a presence of their own: “We’re starting to get the beneficial effects with other industries now being attracted to the island because of our track record,” said Donegan.
“For instance in digital currencies and blockchain a lot of businesses are looking to establish themselves in the Isle of Man simply because they looked to us and saw what we did in terms of fostering an industry around e-gaming on the early 2000’s and decided that that was something that they wanted. They are discovering some of the benefits and either moving their operations to the island, or seriously considering doing it.”
A digital cluster is also starting to form in creative industries, with an increasing prevalence of film production firms in particular continuing to gain traction, a trend that Donegan described as “a very interesting development and one that I think is set to continue for the forseeable future.”
But the island is not ready to rest on its laurels just yet, as the success of the last few years has “excited interest in other areas.” Fintech will continue to be an area of “particular interest” due to the crossover with the transaction element of e-gaming and the DED will look to replicate its existing model into other areas of digital business.
To do that, a “strong regulatory environment” will continue to be a key factor, as will the recent introduction of a £50 million investment fund for digital businesses, designed to “attract them to establish their operations on the island. In other words, to re-locate here.”
The fund is open to businesses in all industries and currently has 95 applications in the pipeline, with the first successful candidates expected to be chosen early this year.
So combine the regulatory prowess and the availability of investment funds with the fact that the island is only an hour-or-so flight away from London and the Isle of Man starts to become a viable and attractive option for businesses.
“We’re busy getting on with developing our businesses and we’re seeing a big pipeline of interest, particularly around digital,”
Donegan said. With financial services already accounting for approximately 35 percent of the island’s GDP and the industry only set to grow, the future is looking bright for the Isle of Man.