PwC’s new Island Index highlights the pressing need to step up investment in skills, infrastructure and environmental protection

12 October, 2023

Islands have always played important roles in international trade, communication and innovation, as well as being biodiversity hotspots, and attractive tourist destinations. Looking ahead, their economies could be especially vulnerable to the disruptive impacts of climate change, geopolitical instability, technology disruption and ageing populations.

PwC’s new Island Index gauges how prepared Guernsey, Jersey, Malta and the Isle of Man are for the disruptions ahead. The newly launched Sustaining prosperity and growth report also analyses the growth prospects for each of these islands between now and 2050.

  • Ageing populations and declining workforces could put severe pressure on economic growth, tax income and public finances. Attracting more women into the workforce and providing incentives for people to work for longer before retiring could help to offset some of the potential labour shortages and boost taxation. Further options include attracting more workers from overseas, though attitudes to migration vary, as does the islands’ capacity for population increases.

  • The Isle of Man has made clear net zero commitments under the Paris Climate Agreement and is grappling with the challenges of implementation, alongside improving climate resilience. New approaches to financing, upskilling and collaboration may be needed. More could also be done to capitalise on the opportunities opened up by the net zero transition. 

  • The Isle of Man’s ability to develop the policies needed to tackle the challenges ahead benefit from strong confidence in their institutions. 

  • Modelling suggests that economic growth could be moderate at best and some way below the OECD average. Without any improvements to skills and productivity, GDP per capita could fall. This underlines the importance of boosting productivity through increased investment in skills and technology. 

Despite these challenges, there are opportunities for Guernsey, Jersey, Malta and the Isle of Man to capitalise on their potential and take the lead in areas like climate action and sustainable investment. Drawing from the Island Index and economic projections, this PwC report outlines key considerations for businesses and governments as they seek to strengthen and sustain relevance, resilience and growth:

Priorities for government 

  • Civic engagement addressing the Island’s transformation and potential population growth

  • Protect and evolve our current industries 

  • Accelerate and invest in the green transition 

  • Invest in productivity and innovation

  • Become a magnet for talent in a mobile world 

  • Lay the foundations for future success through strong government finances 

Priorities for businesses 

  • Boost the talent pool

  • Collaborate to compete

  • Seize the green opportunity 

  • Invest for the future

  • Embrace the silver economy 

Commenting on the launch of the Island Index, Nick Halsall, Territory Senior Partner at PwC Isle of Man said: “The Isle of Man is developing and diversifying its economy as it looks to sustain the impressive levels of growth seen in recent years. But it’s important to build and sustain public support for the transformational changes ahead and make sure all islanders can benefit from the step-up in investment and growth. For our economic success to be sustainable and beneficial, we should also accelerate investment in areas such as the green transition. Get this right and the future for our island looks promising.”

For more details on the findings, the Island Index: Sustaining prosperity and growth report is available here.

People working on building

About PwC - Globally

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 151 countries with over 327,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

© 2023 PwC. All rights reserved

Contact us

Nick Halsall

Nick Halsall

Territory Senior Partner, Advisory Leader, PwC Isle of Man

Tel: +44 (0) 1624 689680

Follow PwC Isle of Man