Business guru issues economic warning to ‘risk averse’ Jersey
IF Jersey had been as ‘complacent’ and ‘risk averse’ in the 1970s as it is now the finance industry may never have taken off, a business fixer has warned.
Kevin Keen said that he was concerned that the Island’s conservative and cautious political and business climate in recent decades had led to it missing out on opportunities to diversify its economy, such as developing a university or a pioneering tech sector much sooner.
And he added he was worried that with the finance industry not the powerhouse that it once was the economy could soon hit difficulties, unless it develops other strings to its bow.
‘I think we became a bit complacent. The finance industry produced lots and lots of money and all we had to do was think about ways to spend the money,’ he said.
‘Of course things change and we have had to think about how to adapt to that change and have struggled as a result.
‘All these corporations were paying lots of tax in Jersey, then suddenly zero-ten came along and we had to pay for things ourselves.
‘And we are wanting more and more from public services but we don’t want to pay the tax for it. That, combined with the cock-ups of one sort or another, the hospital being the latest but not the only one, has made us very conservative.
‘Politicians need to get re-elected and civil servants don’t want to get fired, so sometimes the best way to do that is not to make any decisions at all. That ultimately creates its own risk. I think that’s very, very bad for Jersey.’
Mr Keen, who has helped turn around several business and charities, pointed out that in its early days finance made up only a fraction of Jersey’s economy and even the late States economist Colin Powell, who is viewed as the industry’s chief architect, did not seem to realise its potential and viewed protecting the then-dominant tourism sector as the top priority.
‘If the finance industry had never come along and we are as we are now, would we actually have the vision and the risk-taking to embrace it like we did back then? I’m not sure we would,’ he said.
‘I think we would find all sorts of reasons not to do it and we would just want to hang on to what we have now. The finance industry took 50 years to create and when it started it was just a tiny thing.
‘If you look at Colin Powell’s book – when he wrote it in 1971 he said that we have a number one industry, it’s 50% of our economy and we must protect it at all costs. He was talking about tourism. Finance was about 9%.
‘Even at that point I don’t think he could see how big financial services would become. What we needed to do was give it its opportunity to grow and I think politicians were more trusting and prepared to take a few more risks back then, so they did.’
Mr Keen added that he believes Jersey has missed opportunities to diversify its economy in the early days of the digital revolution in the 2000s and should have built a university, which would help spawn new business, years ago.