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The island is changing. We might still be waiting for a new hospital or wondering what will happen to our much-loved high street, but the years ahead are set to bring a fresh set of challenges.
AI’s impact on jobs, plummeting productivity and keeping the economy not just alive, but thriving, are just a few of these.
In his latest column for Express, Kevin Keen reflects on these economic trials and tribulations lying ahead, and wonders who will be up to the task of trying to solve them…
“Prospective politicians will now be putting the finishing touches to their manifestos as their efforts to win our votes really gets underway. It will be interesting to see how much detail is put into candidates’ economic policies, because promises are easy to make but paying for them is usually much more difficult and pretty much impossible without sustainable economic policies.
As the engine of our past (and future) financial success, the economy has faced its own difficulties over the last decade or so, and needs their support and ingenuity.
According to the Statistics Unit:
In 2016, our economy was almost 10% smaller in real terms than it was in 2000 - a scary statistic some prefer to excuse away or just not talk about.
The GVA from financial services – our most productive industry, where the majority of our taxes and jobs comes from – was 34% smaller in real terms in 2016 than it was in 2000.
Again in real terms, average earnings were only 1.5% higher in June 2017 than they were in June 2001.
Video: An explanation of how the island's economy is measured in GVA (Gross Value Added). (Statistics Jersey)
These numbers are published regularly, but tend to only be news for a day or two.
And that’s not the only concern. Jersey will have to face other large-scale challenges in the coming years:
I am no expert, but I can only see continuing pressure from bigger jurisdictions against international financial centres – even very well regulated ones like ours.
Many of the jobs performed in Jersey are ripe for disruption by technology. The financial services sector employs over 13,000 people - a large proportion of which are involved in administration. If technology and specifically AI removes the need for many of these jobs, how will Jersey cope, especially when around 80% of our taxes come from employment and consumption?
Sectors like retail are facing massive disruption that could change the face of our town forever.
Another huge issue is our ageing demographic where the number of Islanders aged 65+ are expected to increase by 70% between 2015 and 2035. Combined with a largely ‘pay as you go’ State pension scheme, pressure on our health services and islanders’ apparent preference for a smaller total population makes this potentially the biggest challenge of all.
Jersey has a good record of adapting to changing circumstances, and the States is at least providing some modest investment to grow and diversify our economy. We also have a new vision of how we want the Island to look in the future. A vision is a great thing to have, but we must not forget that it will be a healthy economy that ultimately pays for it.
Pictured: Some of the jobs in the sector most important to Jersey's economy, finance, could be lost to Artificial Intelligence (AI) developments.
Unlikely to be the vote winner it should be, but let’s hope we have plenty of champions for our economy and therefore business among the political hopefuls.
As Bill Clinton was supposed to have said, “It’s the economy, stupid.” So let’s not be ‘stupid’ and vote for people that don’t understand that a healthy, diversified and growing economy is crucial to us all.”
The views expressed in this piece are those of Mr Keen personally, and are not those of Bailiwick Express or any of the companies Mr Keen represents.
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