(How the smallest
of nations can survive and thrive in the information age.)
The later part of the 20th century has
recently been designated as the start of the information age. For the most part,
this recognition has come from an incredible growth of businesses in the field
of information technology. This new technology is creating a world in which a
business located anywhere can communicate with a global customer base. However,
the three most import things to a successful business may still be “Location,
location, location!” While a business is now free from having to locate near
its customer base, it must still be careful to find the location with the right
balance of legislation, infrastructure, and trained labor.
Of these three elements, legislation is the most important,
and the area where the smaller nation has a huge advantage of the larger nation.
Technology is now changing so fast, that what constitutes useful infrastructure,
and what skills are necessary within the labor force are being updated continuously.
Having good infrastructure and skilled labor is now a continual process of
rebuilding and retraining. A small nation starting from scratch in some ways
offers advantages over a country with existing information infrastructure
and a labor force with obsolete training.
The Internet is a worldwide network of computers
estimated as currently having a number of users in the tens of millions, with
this number more than doubling every year.
Continuing this trend, virtually every person on the planet will have a
connection to the Internet within the next ten years. Major newspapers around the world are already available in an
on-line format, and work is being done to integrate the Internet with both the
television and the telephone. By the
end of this ten-year period, people everywhere will have access to a virtually
unlimited range of information in the form of text, pictures, sound and video
from anywhere else on the planet.
As the speed and ease of communications increase,
the world shrinks. Physical location
becomes less important to businesses when they can easily communicate with a
customer base spread across the entire globe.
Location becomes entirely unimportant when the only products and
services that these businesses provide are information based. Without strong ties to any location, this
new information based business ("I-biz") will be free to pick and
choose a country of location based upon what that country has to offer. In this shrinking world, small nations will
compete as equals with, or even with some advantage over, larger nations, for
the physical location and corporate registration of these businesses. The next few years will decide which nations
earn a strong reputation as being I-biz friendly.
Before embarking on a plan of action, it is important
to ask why a small country should want to attract this type of business. The answers are many. I-biz has all the advantages of any other
industry but with very few of the drawbacks.
It will bring money to a country from outside, it will provide local
people with jobs, and it will educate a country’s youth, providing them with
the knowledge and skills that are becoming increasingly valuable
worldwide. However, it will not pollute
the air or water, it will not fill the roads with large trucks, and it will not
force local people to a role as manual laborers. Furthermore, since the competitive market for this type of
business is global, the location of foreign owned I-biz in a country does not
in any way increase local competition. Instead it creates an environment in
which local people can learn to do business globally.
It is possible for a nation to gain a worldwide
reputation for hosting a specific type of business when competition in the
business is global rather than location dependant. This is because similar industries tend to cluster together in
areas where the laws are favorable, the necessary infrastructure exists, and
there is a pool of local labor possessing industry specific skills. To create such a reputation, a country must
initially make it both easy and attractive for foreign businesses of the wanted
type to relocate, and even actively court such business. This is done by:
1.
Enacting
laws designed to encourage the industry.
2.
Developing
the necessary infrastructure.
3.
Developing
a pool of trained labor.
4.
Actively
soliciting business of the required type.
These steps relate to Anguilla and I-biz and are
summarized below.
Anguilla has already taken steps in this direction
with such policies as allowing the duty free import of computer equipment and
favorable tax laws. Additional I-biz
encouraging legislation might include setting up the laws for the Internet in
Anguilla as a free zone, modeling it on free zones set up in other countries
for similar reasons. Since the information
produced is available globally, it could be considered to be outside of
Anguilla in much the same way a free zone traditionally allows businesses to
pass goods in and out of a country unregulated, as long as they are not
intended for the use of its citizens.
Such zones are designed to allow a country's people to work for a global
business while at the same time freeing the owners of the business from
concerning themselves with changing local regulations. I-biz seems to be well suited to such a format.
The required infrastructure for I-biz includes
electricity, telecommunications, and office space.
Reliable power.
Good Bandwidth.
No telecommunications monopoly.
An environment in which multiple providers of
required services exist and compete is always more attractive to business
owners thinking about a potential location.
Such competition also generates more employment and higher wages for
local employees.
Office
The eventual goal of bringing foreign owned I-biz
into a nation is to have a group of highly computer literate locals working for
locally owned companies. The first step, however, by necessity is to bring in
educated foreigners who have the required knowledge. Because it will always be
cheaper to hire locals, than to relocate a foreign employee, foreign owned
business will work to train locals as quickly as possible. Very soon, these trained local persons will
be setting up their own businesses. Because I-biz competes globally, the
continued existence of the foreign business will not stifle the growth of local
I-biz any more than it would if it were located on the other side of the globe.
It will in fact aid it by continuing to create trained workers, and continuing
to boost the nation’s reputation in the field.
One problem, which a faces in implementing such goals, is the way in which work
permits are handled. Currently an
applicant can wait over six months for approval to work for a single year, and
then spend another six months after the year is up in fear that the work permit
will not be renewed. Such policy has
developed as a defensive measure to insure that our island is not overrun by
the wrong sort of people, and that our local people can get jobs. To encourage I-biz to come to Anguilla this
has to change.
It must be realized that the global nature of I-biz
means that it earns money from global sources.
The foreigners who come here to do this kind of business make their
money elsewhere and spend it here, while at the same time training our people
to do the same. This is a recipe for
success. It is like having permanent tourists who not only patronize local
businesses, but also employee local people and teach them to start their own
global businesses. Furthermore, these
people are by nature, well-educated middle-class people with strong work ethics
and decent values. They have worked hard to acquire the knowledge they have,
and are assets to any community in which they choose to live.
Anguilla must create a policy which distinguishes between
people wishing to work here who would compete in the local economy, and take
money out of Anguilla, and people who will compete in the global marketplace
and bring money into Anguilla.
To take an active hand in courting I-biz, Anguilla
must encourage publicity. Press
releases to news services in other countries about Anguilla’s new I-biz
friendly attitude are bound to produce results. What North American or European
reporter wouldn't jump at the chance to visit a tropical paradise while working
on a good story?
Paid advertisements, and letters to specific
companies who are hard pressed by growing foreign restrictions, could urge well
established companies to relocate to a more favorable climate.
What must be remembered is that soon many companies
will be able to locate anywhere in the world they wish, and they will no doubt
move to places where they will face as little government restriction as
possible. The more we act as if we want their business, and the easier we make
things for them, the better our chance of capturing a large part of this market
becomes. Montserrat recently announced
its intentions to court such business, but there are certain drawbacks
associated with locating your business on an active volcano.
The race is on to decide who will become the
Caribbean Tax Haven for I-biz, and it’s a race in which Anguilla for once has a
head start.