October’s Chamber lunch saw the island’s business community come together to understand Guernsey’s resilience and how its long-term economic development can be strengthened through diversity, innovation, and cooperation.

Speaker Chris Brock of ISLEFACT made the case that while the Bailiwick has a thriving economy, its reliance on the financial services industry puts it in a weak position in terms of resilience. Working with our counterparts in Jersey, and embracing innovative solutions (including a tunnel!) and having a long term vision and plan defined Chris’ recommendations for a truly resilient Guernsey.

Chris began by outlining geopolitical trends that are already impacting the resilience of island communities such as Guernsey. Shifts from moderate to extreme party politics, pluralism to populism, and independent states to new world alliances were all flagged as key threats.

He then compared Caymen’s journey to major milestones in Guernsey’s history, highlighting that fifty years ago the economic landscape was fundamentally different, without the financial services industry, instead favouring horticulture and tourism.

Though it’s an uncomfortable question, Chris asked the audience “What does a post-financial services Guernsey could look like?”

Despite the clear benefits, Chris flagged that our (over)reliance on it also presents significant challenges. Wealth disparity, negative reputation abroad, and tax and revenue instability were all flagged as areas for concern. Indeed, Chris noted that while 40% of Guernsey’s GDP stems from the professional services sector, only 4% derives from tourism. A healthier island built for resilience would see many different sectors contributing to its vibrant economy, demonstrating a key threat to the Bailiwick should the financial services bubble burst.

Guernsey was then compared to other island communities that Chris flagged as successes in the field of resilience. Iceland and Prince Edward Island were both hailed as examples of island communities that have bounced back.

Iceland which was hit badly by the financial crisis in 2008 and has since moved to successfully balance its economy.

“It went in to economic recession in 2010 to 2013 and it reinvented itself very much looking at support for other sectors. And that shows in how balanced the 2023 GDP figures are.”

No sector in Iceland contributes more than 11% to GDP.

Prince Edward Island, with a similar population size as Guernsey, looked to diversify 15/20 years ago and the largest sector is 14% of GDP. There, innovation is key in terms of the grants that support each sector.

After showcasing these aspirational island case studies, the event turned to what Guernsey can do to improve its resilience.

Top of the list was much closer integration with Jersey. While the private sector has shown promise in this space, the public sector still so much opportunity.  There could be substantial savings on public expenditure and working together would enable rationalisation in infrastructure, transport, healthcare, education and the benefits of jointly addressing the demographic challenge.

He concluded with a statement that was equal parts intimidating and inspiring: ‘change is inevitable, we must embrace it and grab the opportunities.’

 

Did you miss the event on the tunnel? You can rewatch it here.