The Doric Column
July 9, 2001
The handful of medical and bioscience companies on the Isle of Man, scattered about its 227 square miles, constitute a tiny industry compared to the Isle's booming offshore financial business. But it is a nucleus, and the government is determined to spur mitosis and growth.
It is looking to Minnesota to help make it happen.
The Isle, described as "a late relic of the British Empire" by travel writer Jan Morris, is a verdant remnant of volcanic upheaval in the middle of the Irish Sea -- about 70 miles west of Liverpool and 70 miles east of Belfast. It has about 75,000 inhabitants. It calls itself Manx after its original Gaelic-speaking settlers. It's history is wrapped up with that of the Celts and the Vikings in the Western British Isles, one of fairies and fables, invasion and subjugation, Christian conversion, throne-seizing and English rule. And smuggling.
Today, the Isle's offshore financial services industry, making up 40 percent of its gross domestic product, is still tinged with a legacy of questionable dealings. But regulatory reform enacted by Tynwald, its thousand-year-old parliament, is making a difference. The challenge it faces is to establish itself as a reputable, efficient low-tax jurisdiction, shedding its image as a tax haven for the wealthy.
The challenge is also to diversify an economy that has become one of the fastest growing in Europe on the strength of the global appetite for high-speed capital flow, low taxes, local discretion, and first-rate professional services.
"We are open for business," announced David North, Minister of the Department of Trade and Industry (DTI) at a dinner reception for the Minnesota delegation at the Regency Hotel on the Queens Promenade in Douglas, the capital city. The delegation included former Minnesota Attorney General Skip Humphrey and representatives from the Minnesota High Technology Association and the University of Minnesota.
The "business" North announced the Isle is open for is straightforward: Companies interested in expanding their operations to the Isle will be well positioned to enter the European market of 350 million people, given the Isle's open trading status with the European Community. Supported by DTI's medical device initiative, they will enjoy a low business tax rate and be eligible for a suite of attractive considerations including a capital allowance on industrial buildings, plant and equipment; government grants; tax deductibility for R&D expenditures; and withdrawal of withholding tax on company dividends to medical device manufacturers.
DTI officials took us around the Isle so we could see for ourselves how its technological enterprises are faring. Among our stops:
Isle officials stress that land is available for business expansion. In addition to its available land and central location among the British Isles, the island's high quality educational system and health services, they say, separate it from its competitors, including offshore competitors.
Staying ahead of the competition is a mantra here. Nowhere is that mantra sounded louder than in the Isle's globally leading digital infrastructure, 3G wireless, and e-commerce initiatives.
The report in The Times appeared the day before Chris Hall, managing director of Manx Telecom, gave us a full review of the Isle's 3G initiative. He himself participated in the first public demonstration of mobile video-telephony on the Isle.
"I was amazed at the quality of the video," he said, adding the he, for one, would pay to be able to see his children so clearly while talking to them on the telephone during business trips.
The island is a global testbed for the new 3G wireless technology. A lot is riding on its successful roll-out. To wit, the future of an industry.
Manx's main rival is Japan's NTT DoCoMo, making it a "David-and-Goliath contest" wrote New York Times reporter Alan Cowell last April in "A Backwater is Turning to Cutting-Edge Technology." DoCoMo has pushed back its planned introduction of 3G phones until October.
Cowell observed that the collapse of investment in telecommunications companies together with the hundreds of billions of dollars in debt they have incurred in a mad dash to buy wireless network licenses have crippled their ability to build wireless networks.
"Unlike other European operators, Manx Telecom got its 3G license free, and the big players -- from Britain to Japan -- have all announced delays, in large part because handsets are in short supply and networks are still being built," he wrote. "'We actually gave our license away,'" DTI minister North told him.
Providing free access is something the Isle seems quite good at, based on what we heard, read, and the fact that each of our hotel rooms was outfitted with a computer, printer, fax machine, and a free Internet connection to the world beyond the shoreline nearby.
I found the hotel owner, a wealthy German from Frankfurt who made his fortune in banking software, delivering newspapers to his guests. When I expressed interest in taking a hike along the coast, he gave me a lift to the tourism office. "People in Europe need to understand the meaning of service," he said as we motored down the Queens Promenade in his Mercedes. "You in America understand that. I love America."
Building networks is another thing the Isle is quite good at. The day before Manx Telecom's Hall spoke to us, we were given a briefing by Tim Craine, director of a $17 million government-funded E-commerce project. Craine distributed a handsome booklet entitled "An E-commerce and E-society strategy for the Isle of Man" published in May.
Through the project, the Isle wants to encourage its commercial sector to "embrace e-business solutions and technologies" and to lure more e-business to its shores. It also wants to streamline government services to its citizens using new technology ("seamless government").
To do this, the island needs to have a first-rate telecommunications infrastructure, and from everything we saw, it surely has one. Perhaps nowhere else on earth is a self-governing political jurisdiction as "e-enabled."
The Isle of Man is connected to a "self healing ring" of high bandwith resilient fiber-optic capacity, what Hall called "the first digital fixed network in Europe." The fiber optics ring links the island to Manchester, England; Carlise, Scotland; and Belfast, Northern Ireland in an oblong loop. Its capacity, 1.2 Terabits per second, could accommodate some 10 times the current digital flow across the Atlantic Ocean. If the cable on the floor of the Irish Sea were to be cut by a passing ship, information would be rerouted instantaneously in the ring so that no data would be lost. The Isle also has a backup link to England and an advanced satellite communications system.
Manx Telecom offers a full range of services including ISDN (Integrated Services Digital Network), broadband (Asymmetric Digital Subscriber Line - ADSL), national and international private circuits, island-wide GSM (Global System for Mobile Communications) mobile phone service, comprehensive web hosting and ISP (Internet Service Provider) services.
Both Hall and Craine commented on the opportunities for innovation and testing in health services delivery and telemedicine that the Isle's unique demographic and telecommunications position offers. Craine said the British-Irish Council, established a year following the 1998 Good Friday Agreement, has been looking into telemedicine for delivery of specialized services to remote populations as part of its health and economic development strategies.
Professional Data Management Systems (PDMS), the island's leading software company, lists among its clients Britain's vast state-run National Health Service. Founded 10 years ago by information systems expert Chris Gledhill, PDMS has automated NHS purchasing and supplies information by developing "electronic catalogues." Last month, PDMS announced completion of an online coronary assessment tool for Manchester-based CALM Corporation, a subsidiary of the interactive healthcare firm Ultrasis. "Calm Heart" is designed "to monitor, review and improve the care of patients with heart disease" and "to reduce the risk of patients developing the disease in the first instance through assessment and education."
Hall said that Manx Telecom is working with a British firm to develop medical image compression technology for telemedicine. Meanwhile, he is gearing up for the official launch of the 3G wireless initiative with the 200 handsets he has to work with. "I'm hopeful we'll have something to show by late summer," he said. "We're learning a helluva lot."
In the final day of my free hotel subscription, The Times brought news that U.S. Vice President Dick Cheney would undergo a procedure to have an implantable cardioverter defibrillator (ICD) placed in his chest.
What timing, I thought. The ICD is as sophisticated as medical technology gets. It has been described as an emergency room in the chest for people with potentially fatal cardiac ventricular arrhythmias. The chances of Cheney receiving an ICD made by a Minnesota company were fairly overwhelming, and here I was on a remote if dynamic island that wants to build a relationship with Minnesota in the medical device field.
Cheney received a Medtronic Gem III DR defibrillator. The "Celebrity Endorsement" is expected "to lift sales of the implantable cardioverter defibrillator -- and not just for Medtronic" according to a story in the St. Paul Pioneer Press.
ICD marketing efforts are directed mainly at health care providers, but "many patients are taking charge over their health care as well. And the more patients who ask to be screened or tested for the device, the more sales for the industry...."
But not all the news was good news. Skip Humphrey brought word that the U.S. Supreme Court had just struck down a ban on tobacco advertising to teenagers, a decision he viewed as a threat to the settlement between the States Attorneys General and the tobacco companies.
"I just can't believe it," he said, looking downcast. In an attempt to put things in perspective, I observed that the Supreme Court, through a series of decisions beginning in the late 1970s, had been elevating the status of "commercial speech" (vis-à-vis "political speech"), but this did little to comfort him.
Later he learned that the Court's decision applied to a proposed ad ban in Massachusetts that would have prevented adults as well as children from seeing information about products that adults have a legal right to buy. The tobacco settlement was not in jeopardy.
The Times carried another story that caught my eye. Perhaps the closest ties the Isle of Man has to another community is that of Liverpool. Liverpool has figured large in its history and in its transportation and communications links with England by sea and air. The Isle of Man College is affiliated with the University of Liverpool, giving Manx students access to engineering, computer science, architecture, and health & community studies. So it was a pleasant coincidence that Liverpool's Speke airport, one of the fastest growing in Europe, was renamed after Beatles star John Lennon during our stay.
"In the 1960s John, Paul, Ringo and George flew into Speke after various world tours," The Times reported. "They received a rapturous welcome from screaming fans in the airport's original terminal in 1964 when they flew in from America.
The airport unveiled a new logo that includes the late Beatle's famous self-portrait and the words "above us only sky" from his song "Imagine."
Lennon, from 0'Leannain, as Irish a name as they come, descended on his mother's side from the Stanleys. "Stanley, of course, is a name well-known as the family name of earls of Derby and the kings of the Isle of Man. It comes from an Old English phrase meaning stony meadow." [Beatles Irish Heritage]
I took a walk along the Isle's eastern coast.
The vista from the footpath along Marine Drive south of Douglas Head took my breath away, breath a younger hiker could more easily part with. Surging waves of the Irish Sea lurched violently at the headland rocks far below, dissipating in vaporous clouds of water and salt air.
Together with the island's morning mists, emerald valleys and enchanted glens, the enveloping sea is a reminder that this land of the ancient Celts is never far removed from the circumstances of its geography and its history, no matter fiber optics and high-speed finance.
The first leg of my journey was four miles -- to Port Soderick, a little cove know in centuries past as a convenient drop for smugglers. Today it is a stop on the Isle's Steam Railway, one of the last vintage Victorian-era steam trains in the world with an extensive daily run.
I ducked into Port Soderick Glen just to see if I might surprise a fairy, perhaps a phynoderee. "There are still lots of fairies in the Island but the increased population and modern development has made it hard for them to get about, especially as so much iron and steel is used." Harry Penrice writes. "These are elements that the fairies can't fight and so they hide in the rich vegetation of the Island, in the straw in barns or in the apple orchards of country cottages."
After a bit I returned to the main road, proceeded under a stone arch bridge and followed the finger signs to the waiting area for the train. The stop appeared as though it hadn't been altered much since the railroad was first put in 125 years ago.
That cannot be said for Rushen Abbey down the tracks in Ballasalla, where Christianity took root on the island. The Cistercian Abbey, whose construction began in 1134 AD., was likely the origin of the great medieval document "Chronicles of the Kings of Mann & the Isles" which recounts the island's early history. It was allowed to fall to pieces over the past 500 years until the Manx Heritage Society bought the land in 1998 and directed the restoration of building remnants and the grounds, opening an interpretive center on Easter Sunday 2000. Archeologists and their students from the University of Liverpool were hard at work on the Abbey cemetery the day I visited, a Saturday.
The restoration of the Rushen Abbey grounds has been done fast and done well. The walk-through exhibit includes its secular as well as its sacred history: Early in the 20th century Rushen Abbey became a tourist attraction for its strawberry and cream teas, which also featured jazz bands that energized and packed a famous wooden dance floor. The strawberry remains one of the Abbey's most visible symbols.
And sound in principle, I seek repose
Where ancient trees this convent-pile enclose,
In ruin beautiful. When vain desire
Intrudes on peace, I pray the eternal Sire
To Cast a soul-subduing shade on me,
A grey-haired, pensive, thankful Refugee
A shade--but with some sparks of heavenly fire
Once to these cells vouchsafed. And when I note
The old Towers brow yellowed as with the beams
Of sunset ever there, albeit streams
Of stormy weather-stains that semblance wrought
I thank the silent Monitor, and say
"Shine so, my aged brow, at all hours of, the day!"
at Rushen Abbey, 1833
Cistercian solemnity and social teas separated merely by time. The Isle of Man is a traditional culture and a vibrant capitalism squeezed together on a couple hundred square miles. From what I saw during my brief stay, it is more than a controlled microcosm for testing digital devices or tax competitiveness. It is a proving ground for reconciling unfettered markets and the public good.
I was impressed by the vision for the island's future that was laid out for us verbally and visually. But nothing impressed me more than the Celtic street theater in Douglas and hearing that Manx Gaelic, the heart and soul of the island's original culture, has been reintroduced into its primary and secondary schools, a move supported by Manx and by "immigrants."
This move must have been noticed by the magician Manannan. Ellan Vannin is the Manx Gaelic name for "Isle of Man". It means Island of Manannan, named after Mannanan Mac Lir, the sea god and protector of the island. He kept out the Romans with his magical fleet -- a bank of clouds known as Manannan's mantle. The arrival of the Christian saints did not cause him to lose interest in his island.
His voice can still be heard, Harry Penrice writes, "roaring in the glens."
--William Hoffman firstname.lastname@example.org
Glen Helen on the Isle of Man. Known for its natural beauty, the Isle is also earning a reputation for leading edge communications technology spurred by public-private initiatives that support its dynamic financial and film industries. Now the Isle is looking to strengthen its manufacturing economy by luring biomedical companies to its shore. Copyright © 2001 Isle of Man Government