This is an edited version of a discussion paper
circulated in March 2001 on the role and rationale for government action
to create the conditions that would enable the Island to take best
advantage of emerging niche opportunities.
Globalisation and rapid expansion in the use of Information &
Communication Technologies are accelerating changes in the business
environment. These changes are running ahead of the capacities of national
regulatory and fiscal frameworks to adapt to new business practices and
services. Opportunities for Jersey, both transient and longer-lived,
continue to arise. However, competition is intense and Jersey will not win
a share of this activity by default. The Island does have the potential to
gain some element of this new business if it is able to marshal its
strengths and overcome its weaknesses more quickly and to better effect
then onshore and offshore competitors. This is unknown territory for
everyone, including Jersey. The Island does not have any exceptional
advantages although it does have some capabilities built up in the
offshore financial services sector that can be applied to this area.
This discussion paper argues that:
It is necessary and practical for the key players in Jersey's private
sector to collaborate on marketing in this embryonic phase if Jersey is
to remain in the running. Such marketing also includes building support
There is a legitimate case for the States to pump prime this
Current States involvement in marketing should be scaled down in
favour of providing encouragement for the private sector to market the
We must act urgently and refine arrangements as the situation
develops if this opportunity is not to be missed.
An interim marketing vehicle should be immediately established with
membership open to any organisation concerned with ebusiness.
The marketing vehicle will be funded though membership fees which may
be in kind to the extent that a member undertakes marketing activities
that satisfy criteria that establish that the activity promotes the
The vehicle, as representative of the sector, will approach the
States to secure additional funding. The substantial private sector
funding (much of which may be in kind) will establish a case for the
States to contribute.
Relevant activities by members, such as publishing articles,
presentations to conferences etc. will be part funded by the vehicle.
Governance and accountability will be established through a board
elected by members, without remuneration. Voting rights will be linked
to membership subscriptions subject to limits that prevent dominance by
one or two members.
No permanent executive staff will be employed although some effort
will be required to co-ordinate and organise.
States rationale for funding
There are several arguments in favour of States funding this activity:
The benefits of e-business activity in the Island are likely to be
dispersed among legal advisors, telecoms provider(s), IT services
businesses, providers of corporate services, auditors, logistical
service providers. Indirectly, further businesses will benefit. However,
this wide dispersal of the benefits may not generate the incentive
within individual businesses to do pioneering work in developing these
markets commensurate with the overall payback to the Island. Although
this rationale may seem arcane, it is essentially this "market failure"
argument that is put forward to justify government funding for tourism
marketing. In Jersey's case justifying something approaching £8 million
The States already fund marketing activity via the Information
Society Commission in the form of sponsorship, attendance at
conferences, funding the e-team portal advertising and retention of PR
services. This proposal does not introduce a new practice. The principle
of States funding is further established not only in the case of tourism
but also in regard to financial services in the form of the funds
earmarked for Jersey Finance Limited, replacing the PR work of the
Jersey Financial Services Commission.
The matched funding approach is more effective than the current
approach in that it will open the door to increased private sector
contribution, reduced duplication of effort and better management of
scarce marketing expertise. The proposal will allow those with the
relevant expertise and insight to ensure the funds are put to best use.
The marshalling of private sector skills and resources will also
reduce the demands on the IS Strategy Advisor allowing him to devote
more attention to other Information Society initiatives including the
e-government and education / training.
This proposal has a clear precedent in the Jersey Conference Bureau,
which operates successfully along these lines to increase the volume of
conference business that the Island wins. It demonstrates that there is
scope for collaboration among ostensible competitors and co-funding
through the public sector.
The tenure of office of the States IS Strategy Advisor is nearing its
end creating the occasion to revisit existing arrangements.
The Island's economy is highly dependent on offshore financial
services and tourism. This is to some extent inevitable in that these
are the principle niches in which Jersey can partly offset the
competitive disadvantages faced by small islands. Nonetheless the lack
of economic diversity creates vulnerability and limits the career
opportunities for Islanders. E-business builds on the competitive
advantages that have sustained the finance sector. Although it therefore
shares key vulnerabilities of the offshore financial services sector it
does add a degree of diversity in terms of both the range of activity
and career opportunities. In concrete terms, participating in the
creation and operation of B2C or B2B services is somewhat different in
character to wealth management or administration. Existing offshore
financial services firms also will increasingly seek to employ
technologies that are though of as the constituents of e-business
creating complementary demand for these capabilities and competencies.
Scope for Marketing Collaboration
Marketing, in its widest sense, encompasses a wide range of activity.
The principle activities that are suited to collaboration through the
suggested vehicle are:
Wide ranging promotional activities targeting groups including
entrepreneurs, corporate strategic decision makers, venture capitalists,
and professional advisors are suited to collaboration. Various
communications channels will be used, including submission of articles
and advertising in relevant periodicals, presentation of papers at
conferences and symposia, provision of stands at exhibitions, direct
marketing, cultivation of contacts though meetings, maintenance of web
presence. A substantial part of these activities are well suited to
collaboration. At a minimum this will ensure that consistent messages
are conveyed duplication is reduced, coverage maximised and activity
better targeted at the right groups via the most appropriate medium.
In practical terms, individuals would continue to present papers at
conferences and submit articles as before. The vehicle would merely
bring a degree of co-ordination and co-operation to this activity so
that wider, deeper coverage is achieved.
Understanding Markets & Customers
Understanding this complex and rapidly developing arena is a major
challenge in itself. The basic work of intelligence gathering including
monitoring trends, competitors, analysis of this information and
brainstorming for opportunities includes much activity that can be
undertaken jointly, even though some aspects will not be suited to
collaboration. Collaboration will include pooling of intelligence
gathering and a mechanism for sharing information and analysis (e.g.
controlled access web based repository).
Some product development will depend on collaboration. The most
obvious of these situations is the identification of opportunities that
arise from regulatory aspects where Jersey may be able to create an
appropriate regime more quickly than its larger neighbours.
Some collaboration in regard to planning will be desirable, for
example in identifying likely needs for skilled resources, which should
feed through into the training and regulation of undertaking policies of
Finally, the need to develop awareness and support locally among key
groups, including especially politicians. Without a substantial and
coordinated investment in this activity the fledgling sector will be
unlikely to enjoy the support needed to overcome inevitable resistance.
Individually, Island firms have capabilities in some of these areas but
few, if any can span the complete set or have the risk taking appetite to
make the investment needed in view of the risks of these new ventures.
Structure, Control & Funding
As the vehicle will be a forum in which competing firms are
collaborating the structure must be entirely open and able to engender
trust. The proposal will stand or fall on the ability of members to agree
upon such a structure. The task is not easy and existing conflicts may be
a stumbling block. However, there is no doubt that it is possible for
competitors to collaborate in the manner envisaged and the Jersey
Conference Bureau provides a successful local example of the viability of
Level Playing Field Access to Leads
Collaboration raises concerns in regard to the way in which business
leads will be handled. In particular if some members are able to cherry
pick or otherwise restrict access to leads generated then the vehicle will
not engender the confidence required to open doors to collaboration. This
is a very significant concern.
Accountability to members will be established by electing the governing
board. This will go a considerable way toward curtailing the ability of
individual members to exploit the vehicle to further their interests at
the expense of other members. Voting rights might be allocated by
developing a formula that will be acceptable to all parties that will
allow voting proportional to member fee contribution subject to a ceiling
(and perhaps floor). The board can be guided in its decisions by policy
statements, prepared in consultation with members, to maximise
transparency. Such policy statements will form the basis for decision
taking in regard to membership contributions, funding applications etc.
The structure will not be flawless, and in particular smaller members may
need to act in concert to counter dominance by larger members. Nonetheless
a workable arrangement is conceivable.
Furthermore, standardisation of promotional material (literature,
website, advertisements) will ensure leads have at least some awareness of
the range of competing businesses offering services even though, in each
particular case, the spotlight will be on the firm establishing contact
(giving the presentation, writing the article, visiting the advisor etc.).
To realistically open the door to States funding it will be necessary
to demonstrate the full extent of private sector funding that the vehicle
receives. However, much of this funding could be in kind activity.
Precedents for such arrangements can be given drawing on practices
elsewhere if necessary. For example a firm might arrange to speak at a
conference. If this presentation meets board policy requirements (e.g.
includes representation of the wider role of Jersey and includes
distribution of the common marketing literature) then this could be
counted toward membership subscription. This might, for example, be based
on a formula related to the chargeable time extended preparing and
presenting. The value attaching to such in kind contributions would be
subject to acceptance by the governing board. Similar arrangements would
be available for those publishing articles, placing ads etc.
Access to Funding
Activities by members that promote the Island as a location for
e-business would be eligible for part funding by the marketing vehicle. In
practice the level of funding would be dependent on the scale of the
States contribution and costs attributable to the limited amount of joint
activity such as:
production of literature and simple website incorporating links to
members own sites.
Intelligence gathering and distribution costs
Coordination and planning
Decisions on funding will also need to be taken in a transparent manner
that engenders trust among the members. A formula might be devised that
relates to the relevance and size of the audience reached in a way that is
acceptable to members.
Accountability to States
To retain accountability to the States, in recognition of the public
funds entrusted to it, the vehicle will prepare an audited annual report.
This will be used to demonstrate the effective use of those funds to
promote the Island. As the States will be able to discontinue funding at
any time if there are legitimate concerns that funds are not being used in
the Island's interest this should provide a reasonable safeguard over
A trust may provide a suitable vehicle for the initiative in that the
objects can be framed so as to engender the support of all members and
trustees will have a duty to ensure that these objects are adhered to.
Trustees also have a duty to ensure that their own interests do not affect
decisions. These duties will be enforceable by the courts should members
have concerns over trustee conduct.